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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

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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".

By ALEX KENNEDY, Associated Press Writer Alex Kennedy, Associated Press Writer 2 hrs 26 mins ago
SINGAPORE Oil prices reached a fresh one-year high near $76 a barrel Thursday in Asia on a weaker U.S. dollar and growing investor optimism about an economic recovery.

Benchmark crude for November delivery was up 72 cents to $75.90, the highest since October 2008, by midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract added $1.03 to settle at $75.18 on Wednesday.

Oil investors have fed off rising stock markets and a falling dollar this week to break out of a $65 to $75 trading range that has held since May.

The Dow Jones industrial average rose 1.5 percent Wednesday to above 10,000 for the first time in a year on encouraging earnings reports from Intel Corp. and JPMorgan Chase & Co. Most Asian stock indexes gained in early trading.

Meanwhile, the euro rose to $1.495 in early Asian trading from $1.4933 the previous day while the dollar gained to 89.46 yen from 89.34. Oil is traded in U.S. dollars and its price tends to rise when the dollar falls.

"There's a perception that the economy is getting stronger and the dollar is getting weaker," said Gerard Rigby, an energy analyst with Fuel First Consulting in Sydney. "But we haven't seen a real improvement in demand just yet."

U.S. oil inventories fell unexpectedly last week, the American Petroleum Institute said late Wednesday. Crude stocks dropped 172,000 barrels while analysts had expected a jump of 2.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Gasoline supplies declined 2.7 million barrels, the API said, while analysts had anticipated an 1.6 million barrel gain.

In other Nymex trading, heating oil rose 2.43 cents to $1.97 a gallon. Gasoline for November delivery gained 2.77 cents to $1.89 a gallon. Natural gas for November delivery jumped 4.5 cents to $4.48 per 1,000 cubic feet.

In London, Brent crude rose 54 cents to $73.64 on the ICE Futures exchange.

From Wed, 14th.
BAGHDAD Exxon Mobil, Lukoil, Conoco Phillips, Eni, Occidental and Kogas have all resubmitted bids for either the West Qurna Phase 1 or Zubair oil field projects in what the Iraqi government is claiming as a success for its stickler terms.

The two fields along with four other oil fields and two gas fields were offered in a June 30 auction but only the Rumaila oil field was awarded. BP with junior partner Chinese National Petroleum Corp. was the only companies at the time to agree to the ministrys remuneration fee the per barrel profit the companies would earn when production was increased and slashed its initial offer in half to $2 per barrel.

After the auction, the ministry was criticized by Iraqi politicians, foreign governments and the oil industry for being inflexible. The ministry and government said it was protecting the sovereignty and resources of Iraq.

At the beginning it was not accepted by the companies except the Rumaila field, said Oil Minister Hussain al-Shahristani, in a press conference with government spokesperson Ali al-Dabbagh detailing progress in West Qurna and Zubair projects. So the oil ministry has succeeded when the companies have agreed for the maximum price and to be committed with the maximum level of production.


Oil Minister Shahristani (left) and government spokesperson Dabbagh announce progress on the Zubair and W. Qurna oil field projects (photo: Ben Lando/IOR)
Italys Eni with partners Occidental Petroleum from the United States and the Korea Gas Corp. said Tuesday they were set to sign up the Zubair field. The Oil Ministry said no contract has been signed yet but the companies agreed to the terms.

The Eni consortium agreed to a $2 per barrel remuneration fee and to increase production to 1.1 million barrels per day (bpd) within six years. Zubair holds 4 billion barrels of oil and is currently producing just more than 200,000 bpd.

Both Exxon Mobil and Russias Lukoil (with partner Conoco Phillips) have rebid for the super-giant West Qurna Phase 1. (Phase 2 will be included in an upcoming second auction.) The field holds 8.7 billion barrels and is producing just below 300,000 bpd. Both have agreed to a $1.90 per barrel remuneration fee. Exxon pledges to bring production to 2.1 million bpd in six years, where Lukoils production plateau is 1.5 million bpd.

Shahristani said the deals will be awarded within two weeks. He and Dabbagh said all that is required is Council of Ministers approval of the deals, not Parliament as some MPs have demanded.

The Oil Ministry has been given the authority to negotiate and to sign with the companies which accepted the Oil Ministrys conditions, said Dabbagh, which also is according to the policy reflecting the Oil Ministry and the government policy.

The Parliaments Oil & Gas Committee said it has received permission from the speaker of Parliament to formally question Shahristani Oct. 27, part of a larger and complex dispute between the government political parties which want more control over oil policy.

The Rumaila field now awaits Council of Ministers approval after the ministry and BP/CNPC agreed to the terms earlier this month. Within six years production will increase from just over 1 million bpd to 2.85 bpd. Shahristani said this and the West Qurna and Zubair projects alone will reach 6 million bpd. By enhancing existing production and opening up new fields with foreign investment, Shahristani said Iraq will reach up to 12 million bpd, the capacity of Saudi Arabia today. Iraq is the worlds third largest proven reserves but production has stagnated at no more than 2.5 million bpd.

Within the next 6 years, Iraq will be one of the biggest oil exports in the world and in this case it will not be needed to depend on other resources for the development of the country, Shahristani said.

The developing the oil fields will depend on these foreign investments, Shahristani said. We have proved that it is true that the policy was hard; but we were very keen about the Iraqi people riches and will not waste it.

This weekend the Oil Ministry will meet with pre-qualified companies in Istanbul to discuss the terms of the second bidding round, which Shahristani confirmed would take place during the first half of December.

Details announced by Shahristani:
Companies will be taxed 35 percent on profits, not cost recoup.
A quarter of profits will be passed to the respective Iraqi state owned firm, which has a 25 percent stake in the project.
Companies will partner with the Iraqi National Oil Company when it is reestablished; a law to do so is still in Parliament.
Estimates hundreds of thousands of Iraqi jobs created by these contracts; mandates 85 percent of workforce for foreign firm projects must be Iraqi.
Companies will have to train Iraqis in new techniques, inside and outside Iraq.
Iraqi subcontractors will be encouraged.
Contracts, when signed, will be published in full.

By ALEX KENNEDY, Associated Press Writer Alex Kennedy, Associated Press Writer Fri Oct 16, 12:40 am ET
SINGAPORE Oil prices continued a weeklong rally Friday in Asia, jumping above $78 a barrel, after U.S. gasoline inventories unexpectedly fell.

Benchmark crude for November delivery rose as much as 59 cents to $78.17 before slipping back to $78.03 by midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $2.40 to settle at $77.58 on Thursday.

The Energy Information Administration said Thursday that U.S. gasoline supplies fell 5.2 million barrels while analysts had expected a jump of 1.6 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Crude supplies rose 400,000 barrels, the EIA said, while analysts had anticipated an 2.2 million barrel gain.

Until this week, oil had bounced between $65 and $75 since May.

"The transition to a $70 to $80 range is now in full cry," Barclays Capital said in a report. "We expect further transitions upward to occur in line with improvements in the underlying market data."

A falling U.S. dollar has also helped boost oil this week.

In other Nymex trading, heating oil was steady at $2.02 a gallon. Gasoline for November delivery held at $1.95 a gallon. Natural gas for November delivery jumped 3.0 cents to $4.51 per 1,000 cubic feet.

In London, Brent crude for December delivery rose 22 cents to $76.45 on the ICE Futures. exchange.

By ALEX KENNEDY, Associated Press Writer Alex Kennedy, Associated Press Writer Fri Oct 23, 12:25 am ET
SINGAPORE Oil prices rose to near $82 a barrel Friday in Asia, just below a one-year high, as signs the global economic recovery is gathering pace fueled investor optimism.

Benchmark crude for December delivery rose 51 cents to $81.70 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 18 cents to settle at $81.19 on Thursday.

Investors have taken heart from evidence that recovery from the global recession is gathering pace. China said Thursday that its economy grew 8.9 percent in the third quarter, building on recent improvements in industrial production, retail sales and commodity imports.

"So far the path of recovery has surprised to the upside," Barclays Capital said in a report. "The groundwork for a sustainable move into higher price ranges has been laid."

Crude traders are also eyeing gains on global stock markets, which tend to reflect overall investor sentiment. The Dow Jones industrial average jumped 1.3 percent on Thursday and most Asian indexes rose in early trading Friday.

Prices soared to $82 a barrel earlier this week, the highest since October 2008, from $32 in December.

In other Nymex trading, heating oil rose 0.61 cent to $2.10 a gallon. Gasoline for November delivery gained 1.08 cents to $2.06 a gallon. Natural gas for November delivery jumped 5.6 cents to $5.00 per 1,000 cubic feet.

In London, Brent crude for December delivery rose 57 cents to $80.08 on the ICE Futures exchange.

By Steve LeVine

Oil has returned to the role it held before last year's price collapsea sanctuary of choice for investors fleeing the dollar. At least for now, that is.

Over the past week, crude surged through the $80-a-barrel barrier for the first time since September 2008. (The benchmark price of a barrel of crude oil ended Friday, Oct. 23, at $80.50.) This follows a breathtaking, yearlong bout of volatility. Since the summer of last year, oil has rocketed to $147, plunged to $32, and just a week ago traded below $70.

Yet many analysts say oil-market fundamentals are so weak that prices won't rise much higher, and may in fact retreat. "This is a dollar-led rally and unsustainable," says Phil Flynn, an oil analyst with PFGBest Research, a futures brokerage.

Another Safe Haven, Gold, Soars by 20%
The dollar is the main driver behind a 15% increase in oil prices over the past week, analysts say. Since March the dollar has fallen 15% in inflation-adjusted value compared with a basket of currencies of its major trading partners. Traders have sought to cushion the fall in the value of the dollars they are holding by buying futures in traditional safe havens. Mirroring crude's climb, gold has soared this year to more than $1,000 an ounce, or by about 20%. "The steady increase in oil prices means that traders want to hold hard assets," said Lawrence Goldstein, a director at the Energy Policy Research Foundation in Washington.

Few experts are predicting a sudden strengthening of the dollar, so oil prices could stay where they are. But the fundamentals are so weak, analysts say, that the price could rapidly fall back below $80 and even further.

When oil prices rocketed past $140 in 2008, the causes lay mostly with the supply-demand balance: There was virtually no spare production capacity anywhere in the world, so that any supply disruption, such as hurricanes in the Gulf of Mexico and the routine militant attacks in Nigeria, pushed prices up.

Plenty of Production Capacity, Oil in Storage
Observers predicting a price spike have pointed to a drop in global oil exploration and production, saying that when economies rebound there will be a shortage. In the U.S., for instance, exploration is down 27.8% from a year ago, with 309 rigs actively drilling, compared with 428 at this time in 2008, according to the Baker Hughes Rig Count. Abroad, there are 8% fewer rigs drilling than there were a year ago764, down from 831. Major oil companies such as ExxonMobil (XOM), Chevron (CVX), and BP (BP) continue to spend on exploration, while smaller companies have cut back substantially.

But that is just part of the picture, analysts say. For starters, spare production capacity currently runs about 6.7 million barrels a day, according to the International Energy Agency, with Saudi Arabia accounting for 3.8 million barrels, or 56%, of the total.

In addition, oil storage tanks around the world are overflowing and would have to be drawn down before any big price spike takes place. U.S. crude inventories stand at 339 million barrels, up 27.7% from a year ago, reports the U.S. Energy Information Administration. In addition, since mid-September the Strategic Petroleum Reserve has exceeded 725 million barrels, a 27-year record. In fact, there is such a global glut that there is almost no place on land to put all the oil. An estimated 125 million barrels' worth are floating around on tankers scattered over the globe, according to OPEC. Normally, a negligible amount of oil is being stored offshore in ships.

Refineries, too, can ramp up and produce oil products, analysts say. U.S. refineries are operating at around 80% of capacity, among their lowest rates in two decades. "High inventories and weak market fundamentals might eventually weigh on markets" and push prices lower, said Edward Morse, managing director at Louis Capital Markets, a London-based brokerage. So it's possible that crude isn't such a safe haven after all.

Inverse bullish head and shoulders on the ETF wheat chart.

the other side of the issue was put in a very long article, primarily about BP, in yesterday's Sunday Times.
the nub of it was that regardless of the short term issues as set out by BB above, known oil reserves are being depleted far quicker than new are being found.
of course this does not necessarily mean that crude will rise - it almost certainly will over time, but it is driven by other factors - but that second tier and smaller companies with proven reserves of both quality and quantity, will become ever more tempting morsels

Just to balance that bearish point up re- wheat/oil

well worth a read.......http://sharecrazy.com/beta/Tips/2733/where-will-oil-go-next