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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.

A rumour that has been doing the rounds for a while now, but yet again raised it's head on FT site:
"the most profound financial change in recent Middle East history, Gulf Arabs are planning along with China, Russia, Japan and France to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years. "

By CHRIS KAHN, AP Energy Writer Chris Kahn, Ap Energy Writer 4 mins ago
NEW YORK Oil prices fell Wednesday as traders shrugged off an unexpected drop in crude supplies and focused instead on government data that showed Americans still have little appetite for more petroleum.

Benchmark crude for November delivery lost $1.31 to settle at $69.57 on the New York Mercantile Exchange. In London, Brent crude gave up 68 cents to $67.88 on the ICE Futures exchange.

Prices fell immediately after the Energy Information Administration reported that the nation's oil supply dropped by 1 million barrels last week. The drop was unexpected analysts thought stockpiles would grow by 1.9 million barrels but investors found little else to like in the report.

Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, said crude demand continues to be unimpressive, noting that the U.S. still has more oil in storage than last year.

American petroleum consumption has cooled so much that Sunoco, Inc. announced Tuesday that it would idle its Eagle Point refinery in Westville, N.J. As part of the decision, Sunoco said it would furlough 400 workers and cut its dividend.

"Most people look at Sunoco and wonder, who else is going to shut down until things improve?" Kloza said.

The EIA report also said that total petroleum supplies grew last week. Gasoline inventories grew by 2.9 million barrels last week and distillate fuel supplies grew by 700,000 barrels. Analysts expected smaller increases for both.

Elsewhere, the dollar got stronger compared with other major currencies, and equities markets lost ground in afternoon trading. Oil, which is traded in dollars, tends to fall when the dollar gets stronger.

At the pump, retail gas prices ticked higher overnight by less than a penny to a new national average of $2.465, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular gas is 11.8 cents cheaper than last month and $1.015 cheaper than a year ago.

In other Nymex trading, gasoline for November delivery lost 5.24 cents to settle at $1.7203 per gallon, and heating oil gave up 3.31 cents to settle at $1.7811 a gallon. Natural gas for November delivery added 2.4 cents to settle at $4.904 per 1,000 cubic feet.

Bit long but of interest,


Nigeria: Oil Majors Move to Scuttle U.S. $50 Billion Chinese Offer
Ijeoma Nwogwugwu and Constance Ikokwu
7 October 2009

--------------------------------------------------------------------------------
Lagos Concerns over the possibility of losing 16 prolific oil mining leases (OMLs) held for over 40 years by the international oil companies (IOCs) has led to intense lobbying and intrigues to delay the passage of the Petroleum Industry Bill (PIB) currently at the National Assembly.

The PIB, which has gone through the third reading in both chambers of the National Assembly, will repeal several of the existing oil industry legislations and usher in a revolutionary era in the manner the oil and gas sector operates. But major multinational oil firms - Shell, ChevronTexaco, TotalfinaElf, Agip and Exxon-Mobil - have upped the ante through intensive lobbying in the National Assembly to delay the passage of the PIB until next year and force the hand of the Federal Government to renew their leases under existing terms before they finally expire at the end of this month.

Specifically, the IOCs are concerned that the 16 oil blocks they have held since 1968 under joint venture contracts (JVCs), for which their leases expired between November and December last year and renewed for a year by the Yar'Adua administratiron, may form part of the 23 blocks currently being eyed by the Chinese National Offshore Oil Corporation (CNOOC). CNOOC recently made a $50 billion offer to the Federal Government to acquire a 49 per cent stake, translating to 6 billion barrels in oil reserves in 23 of the oil leases held by the IOCs. In its quest to acquire 6 billion barrels of oil, the CNOOC, acting under the auspices of Sunrise Consortium, applied for 49 per cent equity participation in the following blocks: i. OMLs 67, 68, and 70; ii. OMLs 11 and 13; iii. OMLs 71, 72, 74, 77, 79, 83, 85, 86, 88, 89, 90, 91, 95, 118, 127, 133, 139 and 140. All the blocks are held by the IOCs. The request is being given consideration as instructions have gone out for the data on the blocks to be released to Sunrise by the Department of Petroleum Resources (DPR).

In addition, a negotiating committee has been set up in NNPC to handle discussions with the company. The committee is to consider the request and determine an optimum price for the reserves in the blocks against the backdrop of the offer made by CNOOC. The oil companies had expected the automatic renewal of licences which expired last year. But the Federal Government stalled that move, preferring to renew them for only one year in order to take into account the realities of the present times with the passage of the PIB. However, the IOCs are currently pushing hard to get the 16 expired leases renewed a second time under long-term leases that would carry similar terms and conditions as the subsisting JV leases. But the government has balked at the idea of renewing the expired leases for longer periods because it is conscious of the fact that the PIB would usher in an entirely new regime that would require the incorporation of the JVs and even change the terms for the existing Production Sharing Contracts (PSCs) governing newer leases yet to expire. Furthermore, a delay of the passage of the bill would stall efforts by the Federal Government to give a stake in the existing oil leases to the oil communities in the Niger Delta as contained in the draft legislation with the parliament as now being proposed.

President Umaru Musa Yar'Adua, it was gathered, is eager to see the oil communities get some interest in the oil leases operated under the JVCs, which will be hived out from either the Nigerian National Petroleum Corporation's (NNPC's) or the oil major, or both stakes. A clause in the proposed PIB provides for compensation to the oil communities in the Niger Delta by giving them a sense of ownership for natural resources drilled from their backyard. But the companies would prefer that the communities get their share of oil proceeds only through the Federal Government's stake in the JVs while they keep their 40 per cent of the deal. In a memo written by the NNPC which was obtained exclusively by THISDAY, a breakdown of the 23 blocks shows that 18 are currently held under joint venture arrangements while the remaining five are operated under the PSCs. Of the JV blocks, 16 expired late last year while two are due for renewal in 2019. Also, virtually all the expired blocks are located in the continental shelf (shallow offshore) except the two unexpired ones that are located onshore.

The PSCs were only recently converted to OMLs and are not due for renewal until 2020 at the earliest. Expectedly, all the PSC blocks are located in the deepwater and belong in the first set of deep offshore blocks awarded in the 1993 licensing round. A further analysis shows that seven of the oil blocks are held by Shell Petroleum Development Company (SPDC) of which five expired in November 2008; four are held by Exxon-Mobil of which three expired in December 2008; 10 are held by Chevron of which eight have expired; one is held by Shell Nigeria Exploration and Production Company (SNEPCO - Shell deep offshore subsidiary); and one is held by TotalfinaElf. If the PIB is passed, it will not be business as usual because the IOCs will have less influence in the operations of the incorporated joint ventures (IJVs), which will now be restructured to reflect the new ownership structure, board composition and management of the leases. For a long time, the general perception was that the Federal Government has not been getting the best possible deal under the JVs because even though NNPC currently holds a majority stake of 57 per cent across board and is supposed to provide its share of the funding in proportion to its equity stake in the contracts, it has long been suspected that the JVs are entirely funded by the Nigerian government when the cash calls are paid.

With the passage of the PIB, Nigeria through NNPC will have a say in the day-to-day operations of the JVs, will be able to monitor how they are funded by all the partners in the agreement and will cease to be reliant on the Federal Government for the funding of the leases, as the IJVs can raise money from markets under commercial terms. Similarly, the PIB proposes to review several of the contract terms for the PSCs, particularly those governing the older PSCs signed in 1993, which conceded zero per cent royalties to the IOCs, among other unfavourable terms. The bill will result in the repeal of the Petroleum Act of 1969 as amended, Petroleum Profit Tax Act as amended, the Deep Offshore and Inland Basin Production Sharing Contracts Act of 1999 as amended, the NNPC Act and PPPRA Act. Also, the Oil Pipelines Act, Associated Gas Re-injection Act and Regulations, Petroleum Equalisation Fund Act and Petroleum Technology Development Fund Act and other laws might also be repealed in the process. THISDAY learnt that the companies are hoping that if they are able to successfully mount pressure on the National Assembly to delay the bill, they can win the fight.

High stakes politics has since engulfed the industry with the Chinese lobbying to acquire substantial interests as well. They are said to be very adept at campaigning for a non-renewal of the licences of oil majors. It is further expected that the bill would enable the government to restructure the NNPC into a profit-driven company as obtained in other oil producing countries. It will also lead to the creation of the National Petroleum Directorate that will be responsible for policies in the oil and gas sector and the creation of several new companies, including the Nigerian Petroleum Inspectorate (NPI), the National Petroleum Products Regulatory Authority (NPPRA), the National Petroleum Assets Management Agency (NAPAMA) and the Nigerian National Oil Company Ltd (NNOC) as the successor to NNPC. Others are the Nigerian Petroleum Research Centre (NPRC), and the National Frontier Exploration Service. The Petroleum Technology Development Fund and Petroleum Equalisation Fund would also be restructured in line with the oil and gas policy. The Minister of State for Petro-leum, Mr. Odein Ajumogobia, a member of the Presidential Advisory Council on Petroleum, Dr. Muhammed M. Ibrahim and the Secretary/Legal Adviser of NNPC, Professor Yinka Omorogbe, have all described the bill "as a most comprehensive piece of legislation creating a legal and regulatory framework that was transparent, effective and 21st century compliant".