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Crude hits $43 as UAE cuts Asia supplies
News wires

Oil rose to $43 a barrel today after the United Arab Emirates announced deeper cuts in crude supply to Asia for April in a possible signal that Opec will cut output further at its next meeting in March.


Abu Dhabi National Oil Company (Adnoc), the main oil supplier in the UAE, said it will sell customers less of its flagship Murban crude oil and three other main grades in April than in March.

The move came as a surprise to traders, who had expected the UAE to keep April supply curbs largely unchanged.

US crude for April delivery was up 60 cents at $43.10 a barrel by 0937 GMT, after surging $2.54 on Wednesday.

London Brent crude gained 50 cents to $44.79.

Edward Meir, analyst at MF Global in New York, told Reuters the market was expecting further cuts in Opec production:

"Crude oil prices could work slightly higher from here, (likely in fits and starts), as we approach the Opec meeting, and as participants begin to discount another likely cut," he said.

"However, even if Opec was to go ahead with its cut, we have our doubts that prices will move substantially above the $50 mark; that seems to be a fair price for oil right now given the poor macro backdrop," Meir added.

US crude futures jumped more than 6% on Wednesday after US government data showed a larger-than-expected drop in gasoline stocks as demand rose on cheaper prices.

The US Energy Information Administration said gasoline stocks fell 3.4 million barrels in the week to 20 February, against a forecast for just a 100,000-barrel draw.

The data also showed a 1.7% rise in US gasoline demand over the four weeks ending 20 February, as low gasoline prices lured US motorists back on the roads.

This helped oil shrug off a drop in US equities markets, which fell after US President Barack Obama's first address to Congress shed little new light on how he plans to stabilise the economy and shore up banks.

European shares hit a six-year low on Wednesday but recovered on this morning.

Abu Dhabi's move to cut allocations may pre-empt a decision by Opec to cut more when the group meets in Vienna in March.

Reports this week have shown high compliance by Opec members on production cuts agreed last year to stem the slide in oil.

Opec has promised to cut 4.2 million barrels per day from its production levels in September and surveys suggest its members have implemented almost all of their cuts.

Venezuelan Finance Minister Ali Rodriguez, a former president of Opec, said his country expected to propose new output cuts.

Global energy consumption has collapsed as the financial crisis has thrown most major economies into recession, bringing oil prices down more than $100 since their peak in July.

Financial markets are awaiting data on US weekly jobless claims and January durable goods orders at 1330 GMT, which are likely to show slumping business investment and rising unemployment in the world's top oil consumer.

U.K. Stocks Fall, Led by Energy Producers

March 11 2009 -- U.K. stocks fell for the first time in four days, led by energy producers and utilities as Tullow Oil Plc reported a drop in oil and gas production and International Power Plc said lower prices will hurt profitability in 2009.

Tullow Oil lost 3.1 percent, snapping three days of gains, as crude oil fell. Cairn Energy Plc slid 4.2 percent after the company announced a share sale. International Power lost 4.3 percent as the company said it faced a near term challenge in the U.K. and the U.S.

The FTSE 100 Index dropped 16.52, or 0.4 percent, to 3,698.71 in London at 9:25 a.m., having gained 4.9 percent yesterday. The FTSE All-Share Index lost 0.4 percent, while Irelands ISEQ Index fell 1.6 percent.

After yesterdays stellar gains the market will do well just to consolidate, said London-based trader Paul Chesterton at CMC Markets. We saw a pull back in the oil price overnight and some weakness in commodity and energy stocks.

Tullow oil lost 2.3 percent to 794 pence. The company, which today posted a fourfold increase in earnings to 223.2 million pounds ($306 million), said oil and gas production fell 9 percent to 66,600 barrels of oil.

The oil producer this week said it raised $2 billion in loans from 14 banks to fund developments and refinance debt.

BG Group Plc, the U.K.s third-biggest natural gas producer, fell 1.5 percent to 984 pence as crude oil fell in New York, extending yesterdays 2.9 percent decline, amid speculation a government report today will show U.S. inventories gained as demand weakened.

Shell Retreats

Royal Dutch Shell Plc, Europes largest oil company, declined 1 percent to 1,564 pence.

Cairn Energy dropped 4.2 percent to 1,792 pence as the U.K. oil and gas explorer in India said it plans to place up to 6.5 million shares to help strengthen the companys equity capital base.

International Power declined 4.3 percent to 196.1 pence. The British utility that produces electricity in 20 countries said the company faced challenges from weaker prices in the U.K. and the U.S.

There is some concern around the outlook in the U.S., Nathalie Casali, a London-based analyst at JPMorgan Chase & Co. said in a telephone interview today.

http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/txt/wpsr.txt

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased 0.7 million barrels from the previous week. At
351.3 million barrels, U.S. crude oil inventories are above the upper limit of
the average range for this time of year. Total motor gasoline inventories
decreased by 3.0 million barrels last week, and are in the lower half of the
average range. Both finished gasoline inventories and gasoline blending
components inventories decreased last week. Distillate fuel inventories
increased by 2.1 million barrels, and are above the upper limit of the average
range for this time of year. Propane/propylene inventories decreased last week
by 0.6 million barrels and are above the upper limit of the average range. Total
commercial petroleum inventories increased by 2.6 million barrels last week and
are above the upper limit of average range for this time of year.

Betting on big oil's comeback



By Mina Kimes, reporter



With crude down below $45 a barrel, it's hard to see the beauty in oil stocks these days. But with analysts forecasting a rebound in prices, now might be a good time to buy.

"Right now, the upsides in the oil sector far exceed the downside risks," says Fadel Gheit, an analyst at Oppenheimer & Co. "I am absolutely convinced that oil prices will rise."

After last year's $100 free-fall rocked expectations, that kind of confidence is surprising. But Gheit is not alone; a strong consensus is growing for a price rebound. While crude isn't likely to rocket back to the sky-high levels of 2008, even bearish analysts admit that oil can't stay below $50 for long.


As demand and prices drop, producers are drastically cutting back on spending, and OPEC is moving quickly to cut supply. The market is currently over-saturated, but when the commodities market sniffs out the coming deficit, prices will rise again, say analysts.

"We see oil consumption in 2010 being close to what it is in 2009, but production will be down," says Ed Maran, the co-portfolio manager of Thornburg Value Fund. "There's a potential for a shortage in 2011, and it's entirely possible that we could be back up to $100 oil."


Maran thinks demand will return when the global economy recovers, led by oil-hungry countries like China and India. The industry faces political headwinds from the new administration, but few analysts believe that alternative options will satiate the demand for energy in the near future.

Exxon: a league of its own

Exxon Mobil, the world's largest oil and gas producer, stands to benefit if prices rise, but it is also unlikely to suffer much if they don't climb in the near term. "If the economy recovers but oil prices don't exceed $60 -that's the perfect environment for Exxon Mobil," says Gheit. While other companies need higher prices to boost profits, Exxon can reap the benefits of a smaller boost.

Some analysts don't like Exxon's limited upside. Because of the company's massive market cap, it will only react so much to rising prices. Goldman Sachs' Arjun Murti compared it to U.S. Treasuries because of both securities' perceived safety.

"You won't see a lot downs - or ups - because Exxon is so widely held and has such diverse operations," says Allan Good, a Morningstar analyst. "If oil shoots back up, Exxon isn't the best company to take advantage of the upside."

At an analyst presentation on Thursday, Exxon said it plans to boost its spending to $29 billion in 2009. CEO Rex Tillerson highlighted the company's exploratory potential, but Gheit read something else between the lines. "They're going to make a large acquisition," he says. "It's going to happen soon."

As the valuations of smaller companies drop, Gheit says Exxon could scoop up another producer at great discount. The company has enough money to buy any of its competitors - in combination - but would likely face regulatory opposition if went after another large producer.

Until then, Good says investors can take comfort in Exxon's $31 billion in cash. "Park your money there and get a nice return off of the dividend." The company is expected to raise its dividend soon to compete with companies like BP, which currently offers a whopping 9.5% yield.

Opportunities across the board

Other large stocks stand ready for a rebound. ConocoPhillips, whose shares have fallen 57% over the last year, has a price to earnings ratio of 9 versus Exxon's 13. The company has a large amount of refining exposure, which hurt its bottom line in 2008 because of rising oil prices and slowing consumption.

Maran says that ConocoPhillips was unfairly penalized because of its partnership with Lukoil and its expulsion from Venezuela. Investors are worried about political risk - an overreaction, he says, and one that's likely to change if more countries invite foreign companies in to revive their flailing economies.

Another big producer analysts say is undervalued is Petrobras, which discovered a series of mega-fields off of the Brazilian coast two years ago. Goldman's Murti recently wrote that Petrobras "may be the best positioned major oil company in the world for the next oil price upcycle."

It's still unclear how much the company's offshore find is worth, but Don Coxe, a longtime oil guru who now runs Coxe Advisors, likes what he sees. "Petrobras is a special story, and investors want to be a part of it," he says. "They could find $25 billion worth of oil down there."

For investors who are willing to dip their toes into less familiar territory, a variety of small, "beta" oil stocks could pop if prices go up. Gheit prefers Anadarko and Devon Energy for their strong exploration portfolios. While it's not wise to bet on acquisitions, he warns, they could be targets for companies like Exxon - when prices are this good, retail investors aren't the only ones eyeing oil stocks.



http://cnnmoney.mobi/money/archive/archive/detail/130649/full;jsessionid=C9D278E44BFC39B95F4F40EB76A45FC0#p1

US crude oil rallied above $47 on Monday, tracking earlier gains on Wall Street, and as traders cheered comments from Fed chairman Ben Bernanke that the US recession may finish by the end of the year.

Light, sweet crude for April delivery settled up $1.10 at $47.35 a barrel in New York. Earlier in the day, oil fell more than 3% to under $44 a barrel as traders mulled OPEC's decision on Sunday not to make further production cuts. Its next meeting is in May.

As the session progressed a weaker dollar and strengthening equities buoyed demand for the black stuff.

Reports of a militant attack on a Chevron oil pipeline in Nigeria also gave oil prices a lift. The sabotage could, it has been estimated, reduce output by 11,500 barrels per day.

US crude oil settled at a three month high on Tuesday after data showed housing starts surged 22% from Januarys figure despite expectations of a decline.

Its the first time housing starts have risen since last June. Meanwhile builder permits, which is a measure of builder confidence, also rose 3%, confounding expectations of a decline.

Separate inflation figures came in lower than expected. Oil traders cheered the days economic data and a day of gains on Wall Street.

US light crude oil for April delivery added $1.81 to settle at $49.16 a barrel. Oil prices were also pushed higher ahead of the expiry of Aprils contract.

Expectations that data out Wednesday will show an increase in weekly crude inventories also buoyed demand for oil.

Oil prices settled over $1 lower on Wednesday at the end of the Federal Reserves two day meeting in which the central bank said it would buy up to $300bn in treasury bonds over the next six months.

As expected interest rates were kept on hold at its record low.

US light crude oil for April delivery dropped $1.02 to settle at $48.14 a barrel.

Traders also mulled the weekly inventory report from the Energy Information Administration.

The data showed stockpiles of gasoline soared last week by 3.2m barrels, confounding expectations of a 2.1m barrel decline. The report also showed an increase of 2m barrels in crude inventories while distillates, used in diesel and heating oil, increased by 100,000 barrels.

when does the April contract close? or has it already?

Oil prices surged 7%, breaking clear the $51 barrier, after the government announced it would spend another $1 trillion to boost the economy.

The US Federal Reserve chief Ben Bernanke unveiled a $300bn treasury bond buy-back plan as part of a new $1.15trn package to rejuvenate the US economy on Wednesday.

The move continued to hit the dollar on Thursday, which has pushed higher the dollar-denominated crude.

Crude prices surged $3.47 to $51.61 a barrel.

The lower dollar has also buoyed other commodities, including gold. The move by the Fed to pump more money into the system will also push inflation and that too is seen as a driving factor for gold, which is traditionally seen as a hedge against inflation.

Hopes of a US economic recovery pushed crude oil prices higher on Monday after proposals from US Treasury Secretary Timothy Geithner for a $1trn debt plan.

US light crude oil for May delivery rose $1.73 to end the day at $53.80 a barrel on the New York Mercantile Exchange.

Oil also tracked a strong session on Wall Street, with the Dow leaping almost 7%, its strongest gain since last November. Hopes of an economic recovery of course sparked hopes of a recovery in oil demand. Earlier in the session it rose to a high of $54.05.

Details of the governments plans to mop up banks toxic assets were enthusiastically received and optimism about an economic recovery ran high on Monday.

While oil prices rose on Monday, analysts expressed concern about the large amount of crude stockpiles, as shown in last weeks Energy Information Administration report. These excess levels of crude oil are expected to keep oil's gains in check.

US crude oil edged lower on Tuesday on rising expectations that weekly inventory data will show an increase in crude stockpiles while the strengthening dollar also added pressure.

US light crude oil for May delivery fell 18 cents to settle at $53.98 a barrel. Earlier in the session it fell to a low of $52.45.

Wednesdays Energy Information Administration is expected to show an increase of 1.1m barrels in crude stockpiles signalling demand for the black stuff is still weak as consumers grapple with the economic downturn.

Among precious metals gold prices fell once again as the greenback rose against major currencies. COMEX gold for May delivery fell $29.10 to settle at $924.70 an ounce.

The yellow metal also suffered some profit taking following last weeks gains.

US driving season starts mid-late May. Wonder what effect that might have this year.

Would have thought less consumption BA but there again, also a bit to far away to contemplate for me at the moment.

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Oil prices came under pressure on Wednesday but settled off earlier lows after the governments weekly report showed a much bigger than expected build in energy stockpiles.

The Energy Information Administration said crude inventories rose 3.3m barrels last week compared with expectations of a 1.4m barrels increase.

Gasoline inventories fell by 1.1m barrels in the week while forecasts had been for a decrease of 900,000 barrels. Meanwhile distillate, which is used in diesel and heating oil, fell by 1.6m barrels, bigger than the 200,000 barrels decline expected.

Some surprisingly strong US economic data lifted crude prices off the days lows. New home sales figures climbed 4.7% in February to a seasonally adjusted annual rate of 337,000. The Commerce Department said orders for US made durable goods rose 3.4% in February, its first rise in seven months.

US light crude oil for May delivery fell $1.21 to settle at $52.77 a barrel. Before the stockpile and economic data crude traded around 4% lower.

The worst US GDP data for 26 years sent investors scurrying for the safety of gold, pushing the April futures contract up to $940, up $4.20 on the day.

US GDP fell by an annual rate of 6.3% in the final quarter of last year, worse than the initial read of 6.2% but better than consensus forecasts from economists of a 6.6% fall.

Meanwhile, the appeal of gold as a safe asset was further enhanced by news that the total number of US unemployed rose to a record 5.56m, although the dollars strength limited the extent of golds gains.

The oil price was also on the rise, with the April contract rising above $54 a barrel, reversing Wednesdays losses when the Energy Information Administration revealed that crude inventories rose by 3.3m barrels last week.

US crude oil settled almost $2 lower on Friday, settling under $53 a barrel as traders took profit on the previous sessions gains.

US light crude oil for May delivery fell $1.96 to settle at $52.38 a barrel on the New York Mercantile Exchange.

A decline on Wall Street, weak economic data, higher than expected weekly crude stockpile data and a stronger dollar also pressured oil prices. Weak retail sales data from Japan and grim US employment data renewed concern about the global economic outlook.

Otherwise crude has enjoyed six straight weeks of gains on hopes that fiscal stimulus from the US and other nations will help stimulate demand for oil.

Among precious metals gold fell on Friday as the dollar strengthened against major currencies. Gold for June delivery fell $16.90 to end at $925.30 an ounce.

Nymex $48.25 heading down oil stocks rising, demand falling, time to get out of oilies?

Maybe, maybe not h.

Oil prices rose on Tuesday, tracking gains on Wall Street, as financials dusted off the previous sessions losses and commodity stocks enjoyed a broad recovery.

Gains came despite economic data showing a slump in US house prices while a Consumer Confidence Index report showed a slight rise in March from the previous month.

US light crude oil for May delivery rose $1.49 to settle at $49.90 a barrel on the New York Mercantile Exchange.

The weaker dollar also underpinned demand for crude which had fallen by almost $4 a barrel in the previous session.

Overall sentiment was high on Tuesday as Wall Street posted its best monthly performance in six years.

After the massive profits producers were making with oil @ $100 plus, and those same producers now suffering due to reduced oil usage/lower oil price, I think it's only a matter of time before output is cut further, thus sqeezing the oil price upwards to around $70 - $80 this year, imo of course.
2517

Nymex back up to $50 halifax. Looks like you were wrong.

Make that $51. Looks to be heading up rather than down?