POST YOUR OIL NEWS, Clips here


"

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".

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

By BARRY HATTON, Associated Press Writer Barry Hatton, Associated Press Writer Tue Nov 24, 6:44 am ET
Oil slipped towards $77 a barrel Tuesday as markets awaited data expected to show that the pace of U.S. economic recovery is slower than previously estimated.

By early afternoon in Europe, benchmark crude for December delivery was down 12 cents to $77.44 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 9 cents to settle at $77.56 on Monday.

The U.S. government was due to report Tuesday on gross domestic product and consumer confidence. Investors expected the data to show the economy is still growing, but at a slower pace than initially calculated.

Also, many analysts predict the economy will weaken again next year as the effect of stimulus packages wears off and the jobless rate dampens consumer spending.

Crude has bounced between $76 a barrel and $82 for more than a month as a weakening dollar offsets concerns about tepid consumer demand. Oil often trades inversely to the strength of the dollar as investors buy commodities as a hedge against inflation.

"The ceiling has been set by weak refining margins, lackluster demand and a global economic recovery that is expected to be sluggish," Societe Generale said in a report.

Investor optimism was buoyed by a report Monday from the National Association of Realtors that October home sales rose more than 10 percent, suggesting strength in the U.S. economy. On the other hand, crude refiner Valero Energy said it shut down a plant last week because demand for oil products such as gasoline has been weak.

In other Nymex trading, heating oil was up 0.81 cent to $1.9880 a gallon. Gasoline for December delivery rose 0.84 cent to $1.9878 a gallon. Natural gas for December delivery was 0.4 cents higher at $4.477 per 1,000 cubic feet.

In London, Brent crude for January delivery rose 23 cents to $77.69 on the ICE Futures exchange.

____

Crude Oil Buyers Risk Bull Trap Near $80: Technical Analysis

Crude oil buyers may misinterpret the markets climb this week as a signal for further gains, exposing themselves to a potential price reversal, according to Cameron Hanover Inc.

Oil, rising for a third week in four, will face stronger resistance the closer it gets to $82 a barrel, a one-year high reached on Oct. 21, said Peter Beutel, president of the trading adviser in New Canaan, Connecticut. Buyers should watch for the market to settle higher each day before stepping in, rather than take their cues from intraday price swings, he said.

We need to be careful of bull traps, Beutel said in an e-mail. We should probably look for two closes with a second day higher than the first breakout day to confirm that a real breakout has occurred.

Crude oil touched a one-week high above $79 a barrel on Dec. 1 as the dollars decline against the euro bolstered the investment appeal of commodities including gold. The contract for January delivery on the New York Mercantile Exchange was at $76.93 a barrel in electronic trading, up 33 cents, at 11:23 a.m. Singapore time. Futures, which lost 54 percent in 2008, have gained 73 percent this year.

Oil remains in a downtrend channel that goes back about six weeks and should a breakout occur, a rally may have a long-term swing objective to $93.50 a barrel, Beutel said. Prices last traded at that level on Oct. 3, 2008.

Beutel identified five levels of resistance before $82 a barrel, starting with $78.90. On the downside, the first line of support is near $75.65, followed by about $72.40.

Decisive breakouts would be bullish and would suggest fresh legs higher, he said. Of course, these resistance levels have turned back many earlier attempts.

Kosmos Energy, Tullow Oil's operating partner on the West Cape Three Points Block, offshore Ghana, has reported another encouraging test drilling.

Round 2 of the Iraq oil bidding battle begins
By Ben Lando of Iraq Oil Report
Published December 10, 2009
BAGHDAD - Asian, European and Turkish oil executives exchanged handshakes and smiles Thursday, awaiting an early morning flight to Baghdad. They represented three of 44 competitors angling for 10 of Iraqs best untapped oil projects on offer this Friday and Saturday in an auction at the Iraqi Oil Ministry.

The companies are also comrades of sorts, of a fraternity of foreign oil companies desperately trying to return to the worlds most prospective oil patch. After years of isolation, companies are willing to settle on 20-year service contracts rather than the production sharing agreements that have become the industrys preference.

Companies pre-qualified to bid come from 24 countries. Seven are based in the United States.

This is Iraqs second auction the first on June 30 that eventually saw awarded three of the six oil fields offered as part of the ministrys efforts to boost production from 2.4 million barrels per day (bpd) to 6 million within seven years and as much as 10 million within 10-15 years, rivaling Saudi Arabia.

In the two auctions Iraq offered up 84 billion of its 115 billion barrels in proven reserves.

Iraq wants to eventually be a net exporter of oil, natural gas, fuel and electricity, all which require hundreds of billions of dollars of investment over a timeframe of two decades.

Even the mid-term goal is optimistic, with many challenges, both foreign and domestic, investors must face.

Last Tuesdays quintuple car bombs not only killed and injured around 600 people throughout Baghdad, but served as a reminder to Iraqis, politicians, security officials and foreign oil companies that Iraq remains a very dangerous place.

But companies say they will be in attendance. And security will be tight, says the head of Iraqs Oil Police, who has long been planning for the conference.

Combined with past wars, sanctions and mismanagement by Saddam Hussein, an increase in production and thus exports, which Iraq relies on for nearly all its state income, more than $34 billion this year so far first requires a major facelift of infrastructure from the field to the pipelines to storage tanks to export routes.

In exchange Iraq is offering super-giant fields Majnoon and West Qurna-Phase 2, along with eight other oil projects. Companies will place bids on two weighted criteria: to what level production of the fields will be raised, and how much per barrel produced will they get paid.

The latter will be weighted more heavily 80 percent to 20 percent when the ministry judges the bids, so as not to encourage companies to inflate their production targets.

Bids in the first round in June did just that, says Thamir Ghadhban, top oil adviser to Prime Minister Nouri al-Maliki and twice minister since 2003.

On June 30 only the massive Rumaila field was awarded, to BP and the Chinese National Petroleum Corp. Companies felt the ministry was being too stingy with the fee they were willing to pay for each barrel of increased oil flow.

But realizing there was much more to gain Iraq has at least the worlds third largest reserves, with much more to find companies resubmitted their offers. Last month Exxon Mobil with junior partner Shell and Eni with partners Kogas and Occidental Petroleum both were given initial awards to the West Qurna-Phase 1 and Zubair fields, respectively.

Even after this, however, companies have a ways to go. A new government will be formed after Marchs national elections, and there is a sentiment, though now minority, that contracts must have Parliaments approval. Some say they are illegal outright without a new oil law stuck in political fighting for years. And although there is recognition that foreign expertise, training and technology is needed in Iraqs struggling oil sector, theres no agreement as to how big a role and for how long foreigners should play in a sector popularly nationalized for the past three decades.

* The fields being offered are Najmah, Qaiyarah, North and Central East Baghdad, Eastern Fields (Gilabat, Kashem al-Ahmar, Nau Doman, Qumar), Badra, Middle Furat (Kifl, West Kifl, Merjan), Halfaya, Garraf, Majnoon and West Qurna-Phase 2.

* Qualifying Firms (alphabetical by country):
Algeria: Sonatrach
Angola: Sonangol
Australia: BHP Billiton; Woodside.
Canada: Nexen.
China: CNOOC; CNPC; Sinochem.
Denmark: Maersk.
France: Total.
Germany: Wintershall BASF Group.
India: Oil India; ONGC.
Indonesia: Pertamina.
Italy: Edison; Eni.
Japan: Inpex; Japex; JOGMEC; Mitsubishi Corp.; Nippon.
Kazakhstan: KazMunaiGas
Korea: Kogas.
Malaysia: Petronas.
Netherlands: Shell.
Norway: StatoilHydro.
Pakistan Petroleum
Russia: Gazprom; Lukoil; Tatneft.
Spain: Repsol.
Turkish Petroleum Corp.
United Kingdom: British: BG Group; BP; Cairn.
United States: Anadarko; Chevron; ConocoPhillips; ExxonMobil; Hess Corp.; Marathon; Occidental Petroleum.
Petrovietnam

Iraqs Second Oil Auction Qaiyarah
By Staff of Iraq Oil Report
Published December 11, 2009
BAGHDAD - UPDATE TIME: 12:42 PM

The Qaiyarah oil field is small with only 8 million barrels per day, compared to the super-giants that went on auction earlier in the day. Its located in Nineveh province, only 70 km south of Mosul, where al-Qaida and other insurgent groups dominate on any given day.

The field was found in 1928. Eighty six wells have been drilled since then. Production started in 1936 but geography and geology plague it.

12:42:PM: Sonangol offer $12.50 remuneration per barrel and a production plateau target of 120,000 barrels per day for Qaiyarah. The offer is rejected. Iraqs Oil Ministry states that the maximum remuneration fee is $5 per barrel.

Iraqs Second Oil Auction Halfaya
By Staff of Iraq Oil Report
Published December 11, 2009
BAGHDAD - UPDATE TIME:11:52 AM

With 4.1 billion barrels of reserves, Halfaya is located in Missan province, southeast of Amara, the capital. Oil was first found in 1976 and seven wells have been drilled, four of which have had limited production.

11:52: AM: Taking 50 percent of the oil field, China National Petroleum and Consortium was the big winner in Halfaya. Junior partners Total and Petronas each took 25 percent. The Chinese major beat off bids from Eni Oil and Gas, Sonangol, Kogas, Occidental and China National Offshore Oil Corporation, ONGC, TPAO and Oil India.

The winning bid offered a $1.40 per barrel remuneration fee and a production plateau target of 535, 000 barrels per day (bpd). Eni Oil and Gas with partners Sonangol, Kogas, Occidental and China National Offshore Oil Corporation lost out with an offer of $12.90 remuneration per barrel and a production plateau target of 400,000 bpd. Other bids included ONGC, TPAO and Oil Indias offer of $1.40 remuneration per barrel and a production plateau target of 535,000 bpd. Also offered was a 50:50 split between Statoil and Lukoil at $1.40 remuneration per barrel and a production plateau target of 535,000 bpd.

The winning bids remuneration fee was lower than the Ministry of Oils maximum, so the figure was not disclosed.

Iraqs Second Oil Auction The Eastern Fields
By Staff of Iraq Oil Report
Published December 11, 2009
BAGHDAD - UPDATE TIME: 12:40: PM

The four fields that make up the Eastern Fields project are located in Diyala province, between Kirkuk and Baghdad. Gilabat, Khashem al-Ahmar, Nau Doman and Qumar are all undeveloped. Well tests have confirmed oil and gas in all four. Khashem al-Ahmar was discovered first, in 1927, then Gilabat in 1958, Nau Doman in 1976 and Qumar in 1979.

Al-Qaida and other insurgent groups have been active in the area around the fields, and pose an added risk to investors and workers. They are also grouped in disputed territories fought over between Iraqs Arabs and Kurds.

12:40:PM: Sonangol offer $12.50 remuneration per barrel and a production plateau target of 120,000 barrels per day. The offer is rejected. Iraqs Oil Ministry states that the maximum remuneration fee is $5 per barrel.

Iraqs Second Oil Auction Majnoon
By Staff of Iraq Oil Report
Published December 11, 2009
BAGHDAD - UPDATE TIME: 11:09 AM

The 12.6 billion barrel super-giant Majnoon oil field is in Basra province, 60 km northwest of Basra city, and extends toward Missan province. According to Iraqs Petroleum Contracts & Licensing Directorate, Majnoon was discovered in 1976. Twenty four wells have been drilled and it has been partially developed. Work stopped in the 1980s during the Iran-Iraq war, and restarted in 2002.

French major Total had a preliminary agreement with Saddam Hussein to develop the field, but work stopped because of sanctions. Total with partner Chevron is expected to make a strong bid for the field, along with other majors including Exxon Mobil and Shell.

11:09: AM: Shell wins a 60 percent of share of Majnoon oil field with junior partner Petronas. The oil giants beat off bids from Total, China National Petroleum and Consortium. Petronas took 40 percent of the field as Shells junior partner. Shell offered a $1.39 remuneration fee per barrel and a production plateau target of 1.8 million barrels per day. Total offered $1.75 remuneration and 1.405 million bpd. Both remuneration fees were lower than the maximum Iraqs Ministry of Oil was willing to pay.

Iraqs Second Oil Auction East Baghdad
By Staff of Iraq Oil Report
Published December 11, 2009
BAGHDAD - UPDATE TIME: 12:01 PM

The East Baghdad oil field holds 8.1 billion barrels, stretching from Baghdad and into Salahadin province. It is, however, next to and possibly runs below Sadr City, the often volatile poor section of Baghdad that is under full control of those loyal to cleric Moqtada Sadr.

Only the central and north parts of the field are up for auction, northwest of Diyala river. The southern part is allegedly being negotiated with a Japanese oil company. East Baghdad was discovered in 1976 and 64 of the 80 wells are in the contract area. Limited production began in 1980.

12:01 PM: So far, no bids have been placed on offer for East Baghdad oil field.