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By ALEX KENNEDY, Associated Press Writer Alex Kennedy, Associated Press Writer 1 hr 30 mins ago
SINGAPORE Oil prices rose above $68 a barrel Monday in Asia as a rally fueled by an improving economic and corporate outlook extended into a third week.

Benchmark crude for September delivery was up 52 cents to $68.57 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, the contract rose 89 cents to settle at $68.05.

Oil has rebounded from $58.78 a barrel earlier this month as stronger economic results from the U.S. and China boosted investor optimism.

The Dow Jones industrial average has risen about 11 percent during the last 10 days.

"Oil is completely mirroring equity markets," said Jonathan Kornafel, Asia director for market maker Hudson Capital Energy in Singapore. "There's less risk aversion so more investment in commodities."

Many companies have reported better than expected second quarter company results, bolstering investor sentiment that the worst of a severe global recession is over.

But U.S. gasoline demand so far this summer has remained weak, raising doubts about whether the economy can emerge this year with a strong recovery.

"I think a lot of the green shoots we've seen over the last few month have a lot to do with the government stimulus which are eventually going to run out," Kornafel said. "The fundamentals should definitely have us lower."

In other Nymex trading, gasoline for August delivery rose 2.01 cents to $1.94 a gallon and heating oil gained 1.86 cents to $1.80. Natural gas for August delivery fell 6.8 cents to $3.63 per 1,000 cubic feet.

In London, Brent prices rose 52 cents to $70.84 a barrel on the ICE Futures exchange

From Bloomberg:
Crudes gains may be limited as inventories of gasoline and diesel fuel in the U.S., the worlds biggest oil user, have climbed, said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne.

Gasoline inventories climbed 813,000 barrels to 215.4 million in the week to July 17, the sixth straight gain, according to an Energy Department report on July 22. Stockpiles of distillate fuel rose 1.22 million barrels to 160.5 million, the highest since January 1985.

Although crude inventories are falling, its just going into gasoline supplies, and we havent seen much evidence of the summer driving season, said Westmore. Eventually these fundamentals will correct and you see that in these gasoline and distillate inventories getting drawn down.

Brent crude oil for September settlement rose as much as 96 cents, or 1.4 percent, to $71.28 a barrel, and traded at $70.98 on Londons ICE Futures Europe exchange at 9:50 a.m. London time. The contract rose 1.6 percent to $70.32 on July 24, the highest settlement since June 29.

Speculators net-long positions in New York oil, the difference between contracts to buy and sell the commodity, plunged 86 percent in the week ended July 21, the U.S. Commodity Futures Trading Commission reported.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net; Christian Schmollinger in Singapore at Christian.s@bloomberg.net.

ALEX KENNEDY, Associated Press Writer Alex Kennedy, Associated Press Writer Fri Jul 31, 1:07 am ET
SINGAPORE Oil prices jumped above $67 a barrel Friday in Asia, extending a big rally from the previous day as surging stock markets fueled investor optimism.

Benchmark crude for September delivery was up 62 cents to $67.56 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange. On Thursday, the contract rose $3.59, or 5.6 percent, to settle at $66.94.

Traders have gotten whiplash this week as prices jerked up and down on investor uncertainty about the strength of the global economic recovery.

"Sentiment is very fragile," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. "Going forward, we're going to be looking at a seesawing market."

Crude investors were cheered by a jump in U.S. stocks on Wednesday. The Dow Jones industrial average rose 0.9 percent.

While the worst of a severe recession may be over, investors are cautious about a rebound this year. Signs of weak gasoline consumption and high crude inventories have dampened enthusiasm.

"When there's an indicator from the U.S. that suggests the recovery will be slow to emerge, prices get knocked back a bit," Moore said. "I think oil over the next few months will probably have a downward basis."

In other Nymex trading, gasoline for August delivery rose 0.89 cent to $2.00 a gallon and heating oil gained 0.79 cent to $1.78. Natural gas for August delivery held at $3.74 per 1,000 cubic feet.

In London, Brent prices rose 57 cents to $70.68 a barrel on the ICE Futures exchange.

By ALEX KENNEDY, Associated Press Writer Alex Kennedy, Associated Press Writer 6 mins ago
SINGAPORE Oil prices leapt above $70 a barrel Monday in Asia on investor expectations a recovering global economy will boost crude demand.

Benchmark crude for September delivery was up $1.12 to $70.57 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, the contract rose $2.51 to settle at $69.45.

Oil prices seesawed last week before surging Thursday and Friday as investors bet that crude demand, which has been tepid this summer, will eventually pick up as the economy improves.

"Optimism for economic recovery is fighting the weak fundamentals, and right now the optimism is holding the upper hand," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Crude also has followed gains in global stocks. Most Asian indexes rose Monday.

Prices may test an eight-month high of $73.23 a barrel in the coming days, but dismal consumer sentiment in the U.S. will likely weigh on demand and send prices back into the $60s, Shum said.

"It will be difficult for oil prices to sustain in the $70s given the weak fundamentals," he said.

Mohammad Ali Khatibi, Iran's governor to the Organization of Petroleum Exporting Countries, said Sunday he expects crude prices to reach $80 a barrel by January, the oil ministry said.

In other Nymex trading, gasoline for August delivery rose 1.84 cents to $2.03 a gallon and heating oil gained 2.72 cents to $1.86. Natural gas for August delivery fell 1.7 cents to $3.64 per 1,000 cubic feet.

In London, Brent prices rose 93 cents to $72.64 a barrel on the ICE Futures exchange

By ALEX KENNEDY, Associated Press Writer Alex Kennedy, Associated Press Writer 27 mins ago
SINGAPORE Oil prices fell below $71 a barrel Tuesday in Asia after a big rally fueled by signs of economic recovery in the U.S.

Benchmark crude for September delivery was down $1.11 to $70.47 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Monday, the contract rose $2.13 to settle at $71.58.

Traders have brushed off evidence of weak crude demand and rising inventory levels, instead focusing on improving macroeconomic indicators.

A report Monday from the Institute for Supply Management, a trade group of purchasing executives, said U.S. manufacturing activity should increase next month for the first time since January 2008. Also, the Commerce Department said construction spending rose in June.

The positive economic news has emboldened investors to bid up stocks and oil. The Dow Jones industrial average rose 1.3 percent Monday and most Asian indexes gained Tuesday.

"With the economy seemingly improving each week, oil has felt pressure to go higher," said Michael Sander, an adviser at Sander Capital in Seattle. "As far as fundamentals go, oil still has very high inventory levels and weak consumer demand, but those just don't seem to matter."

A report last week showing U.S. crude inventories jumped the previous week suggested demand remains sluggish, and sent prices below $63 a barrel. Since then, oil has been on a tear as investors anticipate an improving economy will boost demand and whittle away supplies.

"Improving demand amid continued supply tightness should accelerate the pace of erosion of the inventory overhang, lending support to prices," Barclays Capital said in a report.

In other Nymex trading, gasoline for August delivery was steady at $2.07 a gallon and heating oil held at $1.87. Natural gas for August delivery fell 2.7 cents to $4.00 per 1,000 cubic feet.

In London, Brent prices fell 77 cents to $72.77 a barrel on the ICE Futures exchange.

Kuwait: Current oil price fine for now
Kuwait's oil minister says prices up to $80 good till end of year, but over $100 harmfuls
On Tuesday August 4, 2009, 4:08 am EDT
KUWAIT CITY (AP) -- Kuwait's energy minister says he hopes oil prices will stay between $70 and $80 a barrel till the end of the year.

Sheik Ahmed Al Abdullah Al Sabah however says prices should not rise above $100 because this could backfire on producers by lowering demand.

He spoke in Rome on Tuesday to the state-owned Kuwait News Agency.

Sheik Ahmed said the latest rise in oil prices to just over $70 reflects optimism that the world economy appears to be rebounding from recession.

Prices have modestly improved following OPEC's decision to cut production by 4.2 million barrels from September levels. The cartel, of which Kuwait is a key member, will meet in September to review production policy.

.Published: Aug. 3, 2009 at 12:54 PM
BAGHDAD, Aug. 3 (UPI) -- The Cabinet of Iraqi Prime Minister Nouri al-Maliki approved a draft law to reinstate the Iraq National Oil Co., sending the matter for parliamentary approval.

Iraqi government spokesman Ali al-Dabbagh confirmed Cabinet approval of the measure during the weekend, the Voices of Iraq news agency reports.

"The Cabinet has decided to approve a draft law on the Iraq National Oil Co. and referred it to the Parliament," he said.

Baghdad sees the reinstatement of a national oil company as a key to boosting oil production while securing government control over energy resources.

Dabbagh said the Maliki government approved the measure to ensure exploration, development and production of national hydrocarbon reserves moved forward.

Previous efforts for a national oil company had stalled over ethnic disputes over the share of Iraqi oil wealth.

The new measure, however, does not name the operations for the company in an effort to avoid regional disputes between Kurdish and central governments in Iraq.

Iraq established its national oil company in 1964. Iraqi dictator Saddam Hussein dismantled the company in 1987, however.

Iraq sits on some of the largest proven crude oil reserves in the world after Saudi Arabia and Iran.

NEW YORK, Aug. 14 (UPI) -- Crude oil prices rose overnight on the New York Mercantile Exchange Friday, but have not broken out of a holding pattern near $71 per barrel.

Oil prices climb above $74 on recovery hopes

Posted: Aug 24, 2009 08:25 AM

Updated: Aug 24, 2009 08:45 AM

BANGKOK (AP) - Oil prices climbed above $74 a barrel Monday in Asia amid spreading optimism about a global economic recovery.

Expectations that demand for energy will grow were spurred by Federal Reserve Chairman Ben Bernanke who said Friday that the U.S. economy is reviving.

Benchmark crude for October delivery rose 22 cents to $74.11 a barrel by midafternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, it jumped 98 cents to settle at $73.89.

In more good news for the U.S. economy, the National Association of Realtors said Friday that home resales posted the largest monthly increase in at least 10 years.

Asian stock markets rallied on recovery hopes, with Japan's Nikkei 225 index jumping 3.4 percent.

In otherNymex trading, gasoline for September delivery added 2.43 cents to $2.0199 a gallon and heating oil for September delivery added 1.28 cents to $1.9177 a gallon. Natural gas for September delivery fell 2.9 cents to $2.775 per 1,000 cubic feat after tumbling another 14.1 Friday.

In London, Brent prices rose 29 cents to $74.50 a barrel on the ICE Futures exchange.

Oil Trades Near 10-Month High on Speculation Demand Recovering
By Yee Kai Pin

Aug. 24 (Bloomberg) -- Crude oil traded near a 10-month high after a rebound in sales of existing homes in the U.S., the worlds biggest oil-consuming nation, spurred optimism the global economy is emerging from recession.

Oil climbed alongside Asian equities after established home sales jumped more than forecast in July to the highest in almost two years, signaling the housing crisis that crippled the worlds largest economy may be easing. The dollar was little changed after falling for a fourth day against the euro Aug. 21, bolstering the appeal of commodities.

A lot of the gains in commodities have been based on what Id call loose fundamentals -- driven heavily by whats happening in equity markets rather than supply-demand issues, Mark Pervan, senior commodity strategist at ANZ Banking Group Ltd. in Melbourne, said in a Bloomberg Television interview.

Crude oil for October delivery rose as much as 46 cents, or 0.6 percent, to $74.35 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $74.24 at 2:56 p.m. in Singapore.

The contract climbed 1.3 percent Aug. 21 to $73.89 a barrel, the highest settlement since Oct. 21, as shares rallied and the dollar fell. Futures have gained 67 percent in 2009.

The market is on the cusp of $75, Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania, said in his daily note to clients. If it gets there, there is not a hell of lot to prevent it from going to $80 or $85.

The dollar traded at $1.4309 to the euro at 2:46 p.m. in Singapore, from $1.4326 in New York. The MSCI Asia Pacific Index added 2.4 percent to 113.30 at 3:40 p.m. in Tokyo, with almost 10 times as many stocks advancing as retreating. Futures on the Euro Stoxx 50 Index added 0.7 percent at 7:18 a.m. in London.

Economic Situation

We have seen a lot of improvement in the economic situation, Eliane Tanner, commodity strategist at Credit Suisse Group AG in Zurich, said in a Bloomberg Television interview. Demand has now already peaked a little bit globally. The situation is improving.

Oil prices surged Aug. 19 after the U.S. Energy Department reported an 8.4 million-barrel drop in the countrys commercially held stockpiles. The decline left inventories, still 12 percent higher than a year earlier, at a four-week low.

The big inventory draw last week in U.S. crude oil is one of the supportive factors but it is uncertain and we probably have to see more updated data this week, said Tetsu Emori, a commodity fund manager at Astmax Co. Ltd. in Tokyo. If last weeks data is correct, the market could be even stronger.

Brent crude oil for October settlement rose as much as 56 cents, or 0.8 percent, to $74.75 a barrel on the London-based ICE Futures Europe exchange. The contract traded at $74.64 at 2:46 p.m. in Singapore.

Nigeria Rebels

A rebel group in Nigeria threatened to resume attacks on oil infrastructure that have cut exports by more than 20 percent since 2006.

The Movement for the Emancipation of the Niger Delta, an armed group in Nigerias main oil-producing region, said Aug. 22 it has suspended peace talks because the government expects disarmament without the real issues being addressed.

MEND will be compelled to resume with ferocious attacks on the oil industry at the end of our cease-fire on Sept. 15, spokesman Jomo Gbomo said in an e-mailed statement.

Nigeria is part of the Organization of Petroleum Exporting Countries, which pumps 40 percent of the worlds crude oil. The 12-member group is scheduled to discuss policy Sept. 9 in Vienna.

To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net

ISTANBUL : Wednesday, 26 August 2009 01:28

ISTANBUL - Iraq aims to increase its oil production by up to four times with the development of 10 new fields to be auctioned later this year, Iraqi Oil Minister Hussein al-Shahristani said Tuesday.

The minister spoke after a meeting with oil companies in Istanbul to present the new fields and the terms for the tender, which will follow a first-round bidding in June that saw investors snub all but one of eight contracts on offer.

Iraq expects production from the new fields slated for auction "to be several million barrels per day", Shahristani said.

"So combining the fields of the first and second round, Iraq should increase its production to at least three to four times of its current production," he said.

Iraq, which has the world's third largest oil reserves, is yet to catch up with output levels prior to the US-led invasion in 2003, hit by deadly unrest and tensions between Baghdad and the oil-rich autonomous Kurdish region in the north.

Iraq currently produces around 2.4 million barrels per day, with oil accounting for some 85 percent of government revenues. It exports some two million barrels per day, most of it from the fields of the southern province of Basra.

British energy giant BP and China's CNPC International Ltd were the only companies to win a bid in the first auction, while a slew of other foreign firms snubbed the other contracts offered by Baghdad, unhappy with financial terms.

It was the first time Iraq's oil industry had been opened up to foreign companies since being nationalised four decades ago.

Iraq also has considerable natural gas reserves, and Shahrastani said on Tuesday Baghdad might consider supplying the planned Nabucco pipeline, designed to carry gas to western Europe, by-passing Russia.

Developing the fields "will take five to six years", he said. "When these are developed, Iraq will have much more gas than it needs, which will be definitely available for export."

Iraqi Prime Minister Nuri al-Maliki has earlier said his country may contribute 15 billion cubic meters of gas to Nabucco, whose suppliers are yet to be determined.

The 3,300-kilometre (2,000-mile) conduit, planned to become operational in 2014 with a capacity of 31 billion cubic metres of gas, is planned to run through Turkey, Bulgaria, Romania and Hungary to Austria. -- AFP


Last Updated on Wednesday, 26 August 2009 13:30

BANGKOK Oil prices rose moderately Friday in Asia, hovering near $73 as investors nurtured doubts about a sustainable recovery in the world's biggest economy.

Benchmark crude for October delivery was up 32 cents to $72.81 a barrel by late morning Bangkok time in electronic trading on the New York Mercantile Exchange. The contract Thursday added $1.06 to settle at $72.49 after tumbling from near $75 earlier in the week.

Reflecting the dire state of energy demand, natural gas prices slumped to their lowest level in seven years Thursday after the U.S. government reported that salt caverns, aquifers and other underground areas where it is stored are filling up. Levels of natural gas have been building because power-intense industries like manufacturing have cut back severely on production.

Crude posted gains because of a fall in the dollar which means investors can get more crude for less money.

Yet some analysts say the oil price is bound to fall in coming weeks as earlier euphoria about the global economy emerging from recession gives way to doubts about how sustainable the recovery is.

Existing weakness in demand will also be exacerbated by the seasonal drop in gasoline consumption when the U.S. summer driving season ends in a few weeks time.

"We have seen this strength (in the oil price) which reflected renewed confidence in the economy," said John Vautrain, energy analyst at consultancy Purvin & Gertz in Singapore. "But in the last week or so people are starting to say that the stock market is overbought and the data is not that good."

In other Nymex trading, gasoline for September delivery was up 0.46 cent at $2.036 a gallon and heating oil rose 0.2 cent to $1.8612 a gallon.

In London, Brent crude was up 17 cents at $72.50.

The release of the Lockerbie bomber triggered speculation that British energy companies trying to access Libya's oil wealth could soon hit a bonanza. But in reality, Big Oil is already there, and its interest in Libya is cooling.

A natural-gas processing plant that Snamproggeti, a subsidiary of Eni SpA, is constructing at Mellitah on the Libyan coast.
.The initial enthusiasm that accompanied Libya's first rounds of oil licensing -- held soon after international sanctions were lifted in 2004 -- has worn off, a casualty of arbitrary laws, Draconian contractual terms and Byzantine bureaucracy.

Since last week, when the Scottish government released Abdel Baset al-Megrahi, the Libyan convicted eight years ago in the 1988 bombing of Pan Am Flight 103 over Lockerbie, Scotland, there has been speculation that it was part of a political deal between London and Tripoli: In exchange for Mr. al-Megrahi's release, Libya might make life easier for British companies, such as BP PLC and Royal Dutch Shell PLC, that want to do business in Libya. That theory is vehemently denied by both British and Scottish officials.

And industry officials say they doubt the Scottish move could ease the massive bureaucratic obstacles British companies have faced in Libya.

"That might prove illusory," said Mehdi Haroun, a partner at legal firm Herbert Smith LLP in Paris who advises oil firms working in North Africa. Even if Col. Moammar Gadhafi's government becomes more favorably disposed toward foreign companies, "you still have to face the inertia of the administration," he said.

Libya has a long tradition of demanding political concessions in exchange for commercial deals. There is a "pattern of using its oil and gas reserves for political ends," says Samuel Ciszuk, a Middle East analyst at IHS Global Insight, and a tendency to apply "political pressure to influence negotiations" with oil companies or their home governments.

He cites the jailing of the Libyan representative of Russian oil company OAO Lukoil during commercial negotiations with Libya's national oil company in 2007. The executive, who was detained on suspicion of espionage, was released in July 2008.

Libya has the largest proven oil reserves of any African country, with 43.7 billion barrels, according to BP. Oil companies have piled in since sanctions were lifted, attracted by some of the world's most promising unexplored oil and gas acreage and its proximity to the huge European energy market.

Libya has held four licensing rounds over the past four years, dishing out contracts to supermajors such as Exxon Mobil Corp. and smaller companies including Petro-Canada, a unit of Suncor Energy Inc. It has also brokered two big bilateral deals -- one with Royal Dutch Shell in 2005 and one with BP in 2007. BP's $900 million agreement was one of the biggest exploration deals in the company's history.

.But Libya has proved a difficult country to operate in. Oil companies often have to pay heavy customs duties on imported equipment, despite the exemptions written into their contracts. Onerous labor laws require them to hire Libyan nationals even when they lack the appropriate skills. Signing a simple rental agreement for an office can be hard, because of the chaos of competing ownership claims.

As oil prices began to soar over the past two years, Libya squeezed more out of foreign investors. Companies like Austria's OMV AG and ENI SpA of Italy were obliged to renegotiate their contracts to comply with new, tougher fiscal terms. In exchange for extending the length of their licenses, they had to pay huge signing bonuses and agree to a much smaller share of production from the oil fields they operate.

Mr. Ciszuk of Global Insight says Libya put pressure on the companies to agree to the new terms by getting the Libyan parliament to call for full nationalization of the oil and gas sector. The initiative was dropped as soon as the oil companies fell in line, he says.

In the latest licensing round, in December 2007, companies had to bid even lower shares of production to win exploration permits. Most of the victors of that round were big state-owned companies like Russia's Gazprom and Sonatrach of Algeria, better able to swallow tougher terms than publicly listed majors that require a higher investor rate of return.

Another factor has taken a shine off Libya: the lack of big oil discoveries to underpin companies' enthusiasm about the country. Since 2008, Occidental Petroleum Corp., StatoilHydro ASA of Norway, British natural-gas producer BG Group PLC and ENI have all drilled dry holes. BG says it has found nothing commercially viable in Libya and is refocusing on other areas.

"Foreign investors no longer see Libya as the new El Dorado it appeared to be after international sanctions were lifted -- especially in the current economic climate," says Herbert Smith's Mr. Haroun.

Write to Guy Chazan at guy.chazan@wsj.com

Oil hovers near $70 as investors eye stocks
By ALEX KENNEDY,
SINGAPORE Oil prices hovered near $70 a barrel Tuesday in Asia after a pullback in global stocks triggered a sharp drop the previous day.

Benchmark crude for October delivery was up 28 cents at $70.24 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange.

The contract Monday lost $2.78 to settle at $69.96 after a drop in stocks heightened investor concerns that the global economic recovery may be weaker than expected. China's benchmark stock index fell 6.7 percent Monday while the Dow Jones industrial average fell 0.5 percent.

Most Asian stock indexes rebounded modestly Tuesday, including China's.

"Stocks are a leading indicator of the economy, so if we have a slump in stocks, that's one fewer driver to support high oil prices," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.

Oil will likely trade between $65 and $70 during the next few weeks, Shum said.

"I don't expect a big pullback because we are starting to see more signs of economic life," he said. "There's clear evidence that the global economy has reached a bottom."

In other Nymex trading, gasoline for September delivery was steady at $1.99 a gallon and heating oil was steady at $1.78 a gallon.

In London, Brent crude was up 35 cents at $70.00.

Chinas Insatiable Energy Deals Only Growing (PTR, XOM, CVX, RDS-B, SNP, CEO, MRO)
Posted: September 1, 2009 at 6:01 am The Shanghai Composite went under 2,700 and between Monday and Tuesday is back to lows not seen since Mays end. Technically, it is back in bear market territory now that it has come off 20% from the highs. But there is one single aspect here which may be the silver lining for China. As asset prices sink, it is easier for China and its central government to buy more and more of whatever it wants on the cheap. While the notion that Chinas deal making for key assets is not new, the pace at which China is locking in energy supply deals seems to only be increasing. And it is effectively doing it without a single handshake taking place on US soil and without US oil.

After reviewing some of the public deals that China has been making, it is rather obvious that its appetite to buy and secure more sources of oil and gas is not ending whether China is technically in the 2007 to 2009 recession or not. If you have what many Westerners believe is a 50-year plan, then overextended Americans, lower commodity prices, and cheaper stocks of key infrastructure and energy players just makes it easier to buy up oil and gas for all of the energy needed to power the infrastructure for over 1.3 billion people. China has already spent billions in several bigger public deals and it seems as though the size and the pace is only rising.

PetroChina Co. (NYSE: PTR) is taking a 60% stake in two oil sands projects in western Canada in a $1.7 billion (U.S. equivalent) in a deal with Athabasca Oil Sands Corp. These two projects, the MacKay River and Dover oil sands projects, are both owned by Athabasca and are located in northeast Alberta. As far as what the surveys have shown, these are believed to hold about 5 billion barrels of bitumen heavy crude. As oil sands are far more capital intensive and require a much higher oil price equivalent break-even point, this is just another long-term secured energy pact that China is capitalizing on.

Exxon Mobil Corp. (NYSE: XOM) and PetroChina already signed a sales and purchase agreement in Beijing for the long-term supply of LNG from the proposed Gorgon LNG project in Australia. Exxon Mobil owns a 25% interest in the offshore Gorgon LNG facility, and Chevron Corp. (NYSE: CVX) and Royal Dutch Shell (NYSE: RDS-B) have the remaining stake. Under the joint-venture agreement, each company will compete to market their gas separately. China is on the hook for more than $40 billion over a 20-year period if the terms have not changed.

Sinopec acquired oil company Addax Petroleum in a bid of more than $7 billion for its large operations in Western Africa and the Middle East. This company had listed 738.4 million barrels of oil in total proved, probable, and possible reserves as of the end of 2008.

Integrated oil major Marathon Oil Corporation (NYSE: MRO) announced in July a pact to sell its 20% interest in a block offshore Angola for $1.3 billion. Chinese oil companies CNOOC Ltd. and Sinopec were the buyers of the deal expected to close late in 2009. The partners in the deal might block this with a right of first refusal, but by now you get the gist.

Earlier this year, Petroleo Brasileiro SA in Brazil agreed to a $10 billion loan from the China Development Bank and to supply oil to China through China Petroleum & Chemical Corp. (NYSE: SNP). While this is at market prices, the deal does continue to secure more and more oil for China. Around the same time, China National Petroleum signed separate deals with Russia and with Venezuela where China would provide $25 billion to Russia and $4 billion to Venezuela in loans for long-term commitments to supply oil.

Kuwait Petroleum Corporation and Sinopec (NYSE: SNP) were well along on plans to build a new 300,000 barrel per day refinery in Guangdong province back at the end of Spring 2009. The deal also had Royal Dutch Shell Plc (NYSE: RDS-B) and Dow Chemical Company (NYSE: DOW) each as owning 10%.

China Petroleum (NYSE: PTR) also announced a deal back in May to buy 45.5% of Singapore Petroleum for just over $1 billion.

Chinese oil giant CNOOC Ltd. (NYSE: CEO) tried earlier this decade to make an unsolicited acquisition offer to buy Unocal here in the United States. This was essentially blocked by the Congress wrangling over China owning a large US oil reserves (or by CFIUS) because of national security concerns. And then Unocal was ultimately acquired by Chevron in a deal which did receive approval from CFIUS and other regulators.

After failing for Unocal and deciding to go elsewhere for its oil besides the U.S., a Canadian oil and gas interests company called PetroKazakhstan with reserves of roughly 550 million barrels of oil and 25 billion cubic feet of natural gas (old estimates from around the time of the deal that are likely different today). This was acquired by China National Petroleum Corporation in 2005 in a deal which valued PetroKazakhstan over $4 billion.

There is another notion here which may only move to infuriate some readers. China is more than able to do deals in Iran. And guess who has been interested in securing Iraqs vast oil supplies? That chapter of Iraqs history is still being written as of today. It seems T. Boone Pickens thought that the U.S. should have an at-market call option on all that oil may come true, at least for China.

These are just some of the big public deals that have been made. The real tally is of course hard to know when you only have the press release data to go through for real details and the exclusions or conditions that exist. But this tally here is well over $50 billion in oil heading to the Chinese. And not a single drop of it has been via a Chinese company acquiring a prized public U.S. oil company. Now go ahead and lop in all the uncounted or smaller deals that are in the millions or unknown size of transaction dollars that have taken place in emerging market countries.

China has done all of this without launching a single air strike and without the use of military force. And the U.S.s biggest public concern in whether China will keep buying up U.S. Treasury notes and bonds.

JON C. OGG
September 1, 2009

.Oil hovers above $68 as US crude inventories drop
By ALEX KENNEDY, Associated Press Writer Alex Kennedy, Associated Press Writer 24 mins ago
SINGAPORE Oil prices hovered above $68 a barrel Wednesday in Asia after a two-day plunge as a drop in U.S. crude inventories suggested demand may be recovering.

Benchmark crude for October delivery was up 24 cents to $68.29 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract Tuesday lost $1.91 to settle at $68.05.

Oil sank almost $5 a barrel in the first two days of the week on investor concerns a slow global economic recovery this year from severe recession may not justify the big rallies in stocks and commodities since March.

The Dow Jones industrial average fell 2 percent Tuesday.

Investors were cheered somewhat when the American Petroleum Institute said late Tuesday that U.S. inventories plunged 3.2 million barrels last week. Analysts had expected the API numbers to drop 1.9 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Department reports mandatory supply figures later on Wednesday, while refiners voluntarily report the API numbers.

There were also signs Tuesday that the U.S. economy the biggest consumer of oil is improving.

The Institute for Supply Management, a trade group of purchasing executives, said its manufacturing index rose in August, indicating an expansion for the first time since January 2008. And the National Association of Realtors said pending U.S. home sales rose to the highest level in more than two years.

In other Nymex trading, gasoline for October delivery rose 0.65 cents to $1.79 a gallon and heating oil gained 0.84 cent to $1.77 a gallon. Natural gas jumped 1.7 cents to $2.84 per 1,000 cubic feet.

In London, Brent crude was up 29 cents at $68.02.

By ALEX KENNEDY, Associated Press Writer Alex Kennedy, Associated Press Writer 2 hrs 19 mins ago
SINGAPORE Oil prices clung near $68 a barrel for a fourth day Monday in Asia as investors looked to this week's OPEC meeting for a possible change in the cartel's production.

Benchmark crude for October delivery was up 12 cents at $68.14 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract Friday rose 6 cents to settle at $68.02.

Trading volume was light in Asia on Monday ahead of the Labor Day holiday in the U.S.

Traders are eyeing Wednesday's meeting of the Organization of Petroleum Exporting Countries in Vienna. OPEC President Jose Botelho de Vasconcelos, who is also Angola's oil minister, said last week that the 12-member group will likely keep output quotas unchanged.

Crude prices have swung wildly in the past year, reaching $147 a barrel in July 2008 before plunging to $32 a barrel in February. Saudi Arabia, OPEC's biggest producer, has said $75 is a fair price for consumers and producers.

In other Nymex trading, gasoline for October delivery was steady at $1.77 a gallon, and heating oil held at $1.72 a gallon. Natural gas fell 6.4 cents to $2.66 per 1,000 cubic feet.

In London, Brent crude was up 33 cents at $67.15.

By DIRK LAMMERS, AP Energy Writer Dirk Lammers, Ap Energy Writer 1 hr 38 mins ago
Crude prices shot above $71 a barrel Tuesday as a falling dollar pushed investors to seek out commodities such as oil and gold.

Benchmark crude for October delivery gained $3.28 to $71.30 a barrel on the New York Mercantile Exchange. The contract settled at $68.02 on Friday after rising 6 cents.

The dollar fell to a low for the year Tuesday against the euro and several other currencies as gold prices surpassed $1,000 an ounce for the first time since February.

Investors often turn to commodities as a hedge against inflation and dollar weakness, and gold seems to be pulling oil along for the ride, said PFGBest analyst Phil Flynn.

"The move in metals has oil reluctantly rallying higher," Flynn said in his morning report. "Normally crude oil would be worrying about the upcoming OPEC meeting as opposed to worrying about the gold market."

Leaders of the Organization of Petroleum Exporting Countries have signaled they plan to keep output levels unchanged at the group's meeting Wednesday in Vienna. That could send oil prices lower as traders expect OPEC members to increasingly exceed the group's official production quotas.

Saudi Arabian oil minister Ali Naimi said Tuesday that crude markets were "in good shape," boosting expectations OPEC will use its meeting this week to stress compliance with output quotas instead of cutting production.

Naimi, whose country is OPEC's top producer, told reporters in Vienna that crude's current price "is good for everybody: consumers and producers."

Energy markets also got a boost from rising equity markets, as the Dow Jones industrials, the S&P 500, the Nasdaq composite index and most major Asian and European stock indexes all were trading higher.

The average price for a gallon of regular gasoline fell a half penny to $2.578, according to auto club AAA, Wright Express and Oil Price Information Service. That's 6.5 cents more than a month ago, but $1.08 less than at this time last year.

In other Nymex trading, gasoline for October delivery rose 7.06 cents to $1.8469 a gallon, and heating oil gained 7.25 cents to $1.7930 a gallon. Natural gas rose 8.4 cents to $2.812 per 1,000 cubic feet.

In London, Brent crude was up $3.20 to $70.02 on the ICE Futures exchange.

OPEC likely to hold oil supply steady, call for more compliance



9 September 2009 | 06:14 | FOCUS


Vienna. OPEC ministers are likely to keep the oil output quota unchanged while calling for more compliance at their upcoming meeting, Xinhua News Agency informed.
Saudi Oil Minister Ali Naimi, whose country is top producer of the Organization of Petroleum Exporting Countries (OPEC), said the current oil price "is good for everybody: consumers and producers.
"The market is in good shape, very well supplied," he told reporters upon his arrival in Vienna for the OPEC meeting on Wednesday.
Crude prices have remained relatively steady at around 70 U.S. dollars per barrel after recovering from a low of 32.4 dollars in December. Late last year, OPEC announced a record 4.2 million barrel per day production cut from September 2008 levels amid the sharp decline of fuel demand due to the economic crisis.
"I don't think now is the right time to cut production ... we think in the world economy there is still some uncertainty," Qatari Oil Minister Abdullah al-Attiyah said.
"We have to be very careful about the world economy and push towards normal growth ... we need time to see what is coming in the next few months," he explained.
Meanwhile, OPEC ministers will focus on compliance with the output limit by the cartel members, according to the delegates.
OPEC is producing some 1 million barrels per day. This was more than the organization claims, making its promised output cut less effective on the market prices, analysts said.
OPEC is a cartel of 12 countries comprising Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
OPEC nations account for two thirds of the world's oil reserves, and, as of April 2009, 33.3 percent of the world's oil production.

Hi Smiler o, been keeping your thread going whilst you been away..... keeping company with the void I reckon and only just released... :))