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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... :))

Crude Oil Is Set for Weekly Gain on Dollar, Chinese Demand

By Ann Koh

Sept. 11 (Bloomberg) -- Crude oil rose for a fifth day as the dollar fell to a nine-month low and industrial production in China, the worlds second-biggest energy user, grew at a faster pace than forecast.

Oil is poised for its first weekly gain in three after the dollar reached its lowest level since Dec. 18 against the euro as Chinas factory output gained and new loans exceeded analyst expectations, reducing demand for the U.S. currency as a refuge. Chinas net crude oil imports in August also climbed to the second-highest on record.

The expectation is that China is on a strong growth path, said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. Also supportive of oil prices was the fact that the U.S. dollar has remained fairly soft.

Crude oil for October delivery rose as much as 44 cents, or 0.6 percent, to $72.38 a barrel on the New York Mercantile Exchange. It traded at $72.32 a barrel at 1:45 p.m. in Singapore. Futures have gained 6.3 percent this week and 62 percent in 2009.

Output at Chinas factories grew 12.3 percent from a year earlier, the statistics bureau said in Beijing. That exceeded the 11.8 percent growth expected by economists surveyed by Bloomberg News.

The dollar dropped to as low as $1.4621 per euro from $1.4582 yesterday in New York. The euro has gained 4.6 percent against the dollar so far this year.

Economic Recovery

Chinas net crude oil imports increased 18 percent last month to 17.92 million metric tons, the General Administration of Customs said. Thats second to the record 19.2 million tons in July, according to Bloomberg calculations.

Separately, the countrys power generation rose to a record after the domestic economic recovery spurred demand from businesses and factories. Output increased for a third month, climbing 9.3 percent, the statistics bureau said.

Crude oil futures may fall next week as fuel stockpiles rise and refineries prepare to idle units for seasonal maintenance, a Bloomberg survey showed.

Fourteen of 31 analysts surveyed, or 45 percent, predicted oil will fall through Sept. 18. Ten respondents, or 32 percent, forecast the market will rise and seven said prices will be little changed. Last week, 50 percent of analysts said oil would fall.

Stockpiles Fell

U.S. stockpiles of crude oil fell 5.91 million barrels to 337.5 million last week, the lowest level since mid-January, an Energy Department report showed yesterday. Supplies were estimated to decline 1.85 million barrels, according to the median of 16 responses from analysts in a Bloomberg survey.

Oil stocks are still very high, but improving demand amid continued supply tightness should accelerate the pace of erosion of the inventory overhang, lending support to prices, analysts at Barclays Capital, led by Gayle Berry, said in a report.

Gasoline inventories rose 2.07 million barrels to 207.2 million, the first gain in seven weeks, the department said. Stockpiles of distillate fuel, which includes heating oil and diesel, climbed 1.99 million barrels to 165.6 million, the highest since January 1983.

Brent crude oil for October settlement climbed as much as 59 cents, or 0.8 percent, to $70.45 a barrel on the London-based ICE Futures Europe exchange, and traded at $70.33 at 1:39 p.m. Singapore time. Yesterday, the contract settled 3 cents higher at $69.86.

To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.net

Last Updated: September 11, 2009 02:06 EDT

your doing a Grand Job Keep it up ! : )

By ALEX KENNEDY, Associated Press Writer Alex Kennedy, Associated Press Writer 2 hrs 46 mins ago
SINGAPORE Oil prices dropped below $69 a barrel Monday in Asia amid a stronger U.S. dollar and a slide in regional stock markets.

Benchmark crude for October delivery was down 83 cents at $68.46 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, the contract tumbled $2.65 to settle at $69.29.

Oil prices have fallen about $4 in the last two trading days as the dollar rebounded off its lows of the year last week. Oil is priced in dollars so it becomes more expensive when the U.S. currency gains.

The euro fell Monday in Asian trade to $1.4535 from $1.4597 on Friday and the dollar was steady at 90.45 yen.

Oil traders are also eyeing stock markets for an overall read on investor confidence. Most Asian indexes fell in early trading Monday.

"Oil's being driven down by the dollar and weakness in Asian stocks," said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. "There are also worries about oil demand."

Crude has traded between $65 and $75 for the last few months as investors mull weak consumer demand amid a global economic recovery.

Shum said oil will likely remain in that range until there is a strong new catalyst.

"There are no clear forces to cause oil to break out of that range," Shum said. "I don't expect this pullback to be very significant."

In other Nymex trading, gasoline for October delivery fell 2.53 cents to $1.73 a gallon, and heating oil dropped 1.09 cents to $1.72 a gallon. Natural gas was steady at $2.97 per 1,000 cubic feet.

In London, Brent crude was fell 51 cents to $67.18.

Tue 15 Sep 2009

LONDON (SHARECAST) - Oil continued to fall on Monday with prices hanging just under $69 a barrel. Trade was dominated by concern over a trade row brewing between China and the US.

Also weighing on sentiment was an announcement by commodities-exchange operator CME Group which runs the New York Mercantile Exchange where US oil trades, that traders will face tighter limits on exchanges such as NYMEX from 14 September to help limit speculation in some trades.

The announcement comes as part of the Obama administrations efforts to reduce speculation in energy markets.

Crude for October delivery fell 43 cents to settle at $68.86 a barrel on the New York Mercantile Exchange.

Among precious metals gold remained above the $1,000 line despite some comments that this price is too dependent on speculative money to be sustained.

Gold for December delivery fell $5.30 to settle at $1,001.10 an ounce.

Commodities: Oil above $72 as stockpiles fall, gold up
Thu 17 Sep 2009

LONDON (SHARECAST) - US crude oil stocks enjoyed another strong session with the weaker dollar, upbeat economic news and a larger than expected drop in weekly supplies data supporting demand.

Crude oil for October delivery climbed $1.58 to settle at $72.51 a barrel on the New York Mercantile Exchange. Earlier in the session the October contract rose to a high of $72.56.

Demand for the black stuff picked up after the US Energy Information Administration said crude oil inventories fell by 4.7m barrels last week compared with expectations of just under a 3m barrel drop.

The EIA report, which cited a slowdown in imports for the bigger than expected decline, also showed an increase in gasoline and distillate stocks.

Economic data was also well received and underlined fresh hopes about the economic outlook.

Encouraging house price data and a separate report showing industrial production rose more than expected also lifted sentiment. All this fuelled appetite for risk, bringing the dollar lower and making oil cheaper for holders of other currencies.

Among precious metals gold continued to rack up gains, with gold for December delivery closing up $13.90 at $1,020.20 an ounce. Earlier it hit an intra-day high of $1,023.30 a level not seen since March last year.

The weaker dollar and optimism about the global economic outlook increased demand for gold as an alternative investment, analysts said.

Silver for December delivery added 43 cents to close at $17.43 an ounce while copper for December delivery climbed 9.5 cents to $2.934 a pound.

BANGKOK Oil prices fell below $72 a barrel Monday in Asia as high crude stockpiles and weak demand tempered enthusiasm about recent signs of improvement in the world's largest economy.

Benchmark crude for October delivery was down 40 cents at $71.64 a barrel by midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract gave up 43 cents Friday to settle at $72.04 a barrel.

The recession has sapped American fuel consumption, and U.S. oil stockpiles are 14 percent larger than last year even as recent data suggests the economy is clawing out of recession.

The Energy Information Administration said Wednesday that the country also is sitting on a sea of distillate fuels including heating oil, with stockpiles approaching a 27-year high.

"Most of the macro data from the U.S. over the last month has been supportive of oil prices," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. "But inventories remain high and demand is weak, so that's capping prices."

Moore said crude will likely average $64 a barrel in the fourth quarter before rising to average $80 in the October to December period of 2010.

In other Nymex trading, gasoline for October delivery slipped 0.84 cent to $1.8240 a gallon, and heating oil fell 0.86 cent to $1.8193 a gallon. Natural gas fell 4.5 cents to $3.733 per 1,000 cubic feet.

In London, Brent crude fell 41 cents to $70.91 on the ICE Futures exchange.

Associated Press Writer Alex Kennedy contributed to this report from Jakarta.

2009 September 20 Sunday
Production In Mexico's Biggest Oil Field Tanking
The tanking production of Mexico's formerly largest oil field is happening so fast it is breathtaking.

Output at state-owned oil monopoly Petroleos Mexicanos's offshore field Cantarell, once the world's second-largest oil field, has plunged to 500,000 barrels a day from its peak of 2.1 million in 2005.

"I don't recall seeing anything in the industry as dramatic as Cantarell," says Mark Thurber, assistant director for research at the Program on Energy and Sustainable Development at Stanford University.

If this happens to Saudi Arabia's Ghawar oil field then we'll enter an economic depression. As more countries hit their production peaks we become more dependent on the dwindling list remaining producers that are not yet in decline. I expect a series of oil price shocks as a result.

Mexico was America's 2nd biggest supplier in 2007 and will likely cease to supply us any oil within 5 years.

In 2007, Mexico was our second-biggest oil supplier, after Canada. Last year, with a 15% drop in daily barrels supplied, the country dropped to third place behind Saudi Arabia.

Both Saudi Arabia and Mexico are too secretive about the state of their oil fields to allow outside experts to estimate future production trends. Mexico is easier to call though since experts see deep offshore drilling as needed to slow Mexico's oil production decline. Since Mexico's government is spending Pemex revenue on government funding Pemex does not have enough money (or expertise) to do the needed deep offshore exploration and development. So we can count on continued Mexican oil production decline.

Mexico's Chicontepec field has been a disappointment. This decline in Mexican production is going to bring an end to Mexico's role as an oil exporter and therefore reduce funding for their government and depress the Mexican economy. Mexico might even become a net exporter in 5 years time. The United States needs to build a formidable physical border barrier to insulate ourselves from the economic troubles building up south of the border.

By Randall Parker at 2009 September 20 01:14 PM Economics Energy

1 hr 13 mins ago
BANGKOK Oil prices wallowed near $70 a barrel Tuesday in Asia after falling steeply overnight amid news that China's crude consumption fell in August.

Benchmark crude for October delivery was up 26 cents at $69.97 a barrel by early afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell $2.33 to settle at $69.71 on Monday.

Energy consumption in North America and Europe has been crimped by recession, leaving China as one of the few countries that continue to consume oil, gasoline and diesel in growing quantities. That pace, at least during late summer, appeared to slow, according to a report released Monday.

Chinese oil demand slid 5.4 percent in August from July, the first month-to-month drop since March, according to Platts, the energy information arm of McGraw-Hill Cos., as the world's second-largest oil consumer reined in oil imports and crude throughput rates at its domestic refineries.

But some analysts expect a second-half recovery in demand from Europe and the U.S. combined with still decent energy appetite from Asia to boost oil prices.

"I think we're going to see a pretty significant recovery in the second half in the U.S. and Europe, and demand from China has been holding up," said Christoffer Moltke-Leth, head of sales trading for Saxo Capital Markets in Singapore. "I see more upside than downside for oil prices right now."

Moltke-Leth said crude could rise above $75 during the next month. "If we can break through that, prices will likely jump to $80."

In other Nymex trading, gasoline for October delivery rose 0.96 cent to $1.7610 a gallon, and heating oil rose 1.23 cents to $1.7640 a gallon. Natural gas, after tumbling more than 5 percent, was up 6.9 cents to $3.645 per 1,000 cubic feet.

In London, Brent crude rose 21 cents to $68.90 on the ICE Futures exchange.

Associated Press Writer Alex Kennedy contributed to this report from Jakarta.

interesting about Iran possible conflict..

BANGKOK Oil prices rose to near $67 a barrel Tuesday in Asia as regional stock markets rebounded and investors awaited a slew of data on the U.S. economy.

Benchmark crude for November deliver was up 2 cents at $66.86 by late morning Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 82 cents Monday to settle at $66.84.

Regional stock markets, often a barometer of optimism about economic prospects, rebounded from a sharp fall Monday after corporate takeovers boosted Wall Street to a higher close.

Also pushing up oil prices was the West's recent stern warning to Iran over a previously unknown nuclear facility. About 20 percent of the world's crude moves through the Straits of Hormuz on Iran's southern coast and any showdown between the West and Iran could threaten that route.

One of Nigeria's militant leaders has given up his armed struggle against the government in the oil-rich Niger Delta.

Ateke Tom told a news conference the government had offered him a pardon, and said: "I hereby formally accept the amnesty offer and lay down my arms."

President Umaru Yar'Adua, who proposed the amnesty earlier this year, said he commended Mr Tom's decision.

But other rebels are still fighting, saying they want a fairer distribution of oil wealth.

Various people claiming to speak for the the main militant group, the Movement for the Emancipation of the Niger Delta (Mend), have said they reject the terms of the amnesty.

The rebels fund themselves by stealing oil, kidnapping people and extortion.

The attacks are believed to cut Nigeria's oil output by some 25%.

During a previous peace initiative in 2004 Mr Tom said he had handed all his weapons to the government, but later restarted his fight.

He announced he would accept the current amnesty offer after a meeting with the president on Thursday.

The government's amnesty offer is part of an effort to end years of rebel attacks on the Nigerian oil industry.

Officials said militants who give up their weapons by October would benefit from a rehabilitation programme, including educational and training opportunities.