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Centrica raises stake in North Sea field

Mon 30 Jan 2012

- British Gas owner Centrica is to pay ConocoPhillips $223m for its non-operated interests in the gas- and oil-producting Stratfjord field (and associated satellites) in the North Sea.

“Increasing our stake in Statfjord marks the latest stage in our drive to secure high quality sources of gas for our customers, adding both earnings and long-term value to Centrica," said Managing Director Mark Hanafin.

The fields are located across both Norwegian and UK sectors of the Northern North Sea and produce gas for the UK market. The transaction takes Centrica's interest in the field from 19.13% to 34.3%.

The acquisition adds additional reserves of 36 million barrels of oil equivalent to Centrica's portfolio. The resulting net increase in production will be over 11,000 barrels of oil per day.

"The acquisition, which follows our announcement last year of a new 10-year gas supply deal with Norway and acquisition of assets from Statoil, underlines our commitment to invest in North Sea production and secure future energy supplies for the UK," Hanafin added.

Centrica said that £200m of field development costs will be required in order to "maximise the long-term recoverable reserves". The acquisition is expected to be earnings- and cashflow-enhancing immediately.

BC

31/01/2012

Higher oil prices boost Exxon 4Q profit 2 percent

By CHRIS KAHN, AP Energy Writer – 1 hour ago

NEW YORK (AP) — Exxon Mobil's fourth-quarter profit rose 2 percent as higher oil prices offset a drop in production.

The world's largest publicly traded oil company said Tuesday that it sold crude between October and December for 27 percent more than one year ago. Natural gas prices also jumped 27 percent outside the United States.

Higher prices pushed net income to $9.4 billion, or $1.97 per share, in the fourth quarter, matching Wall Street expectations. It made $9.25 billion, or $1.85 per share, a year earlier.

Revenue rose 15.6 percent to $121.6 billion in the latest quarter.

Exxon, based in Irving, Texas, said that production declined nearly 9 percent in the quarter, even

after spending a record $36.8 billion last year in search of new sources of crude and natural gas.

Exploration projects can take years to yield new production. And some of Exxon's biggest investments recently have been in U.S. natural gas fields, which so far haven't paid off because prices have dropped to their lowest level in a decade.

Crude production declined as some of its fields matured and produced less. And many contracts in foreign countries limit the amount of oil that Exxon can sell as prices rise. And natural gas demand fell in Europe as well.

Overall, earnings in Exxon's exploration and production business rose 18 percent offsetting a 63 percent drop in income from the company's refining business.

The company's refineries, which produce gasoline, diesel and other fuels, have struggled to pass on the higher cost of their primary input, which is crude. Exxon announced Sunday that it is selling its Japanese refining and marketing business to partner TonenGeneral Sekiyu K.K. for $3.9 billion following an extended slide in Japanese fuel demand.

Exxon's chemicals business also saw profits decline 49 percent.

For the full year, Exxon's net income rose 34.8 percent while revenue rose 26.9 percent.

Last week, Chevron Corp. said profits slipped 3.2 percent. ConocoPhillips reported a 66-percent increase in quarterly earnings, though much of that came from the sale of a pipeline and other assets. Royal Dutch Shell expects to report its financial results later this week.

Shares of Exxon Mobil Corp. fell 91 cents to $84.58 in early trading.

Oil price tops $100 as demand hopes rise on new European treaty to fight debt crisis

January 31, 2012 - 9:20 AM

Oil prices are climbing on hopes that demand may improve after European leaders agreed on new measures to resolve the region's crippling debt crisis.

Benchmark oil rose $1.52 to $100.30 per barrel Monday morning in New York. Brent crude rose $1.60 to $112.35 per barrel in London.

Investors are worried that Europe's financial crisis will affect the global economy and hurt oil demand. European leaders agreed to a treaty designed to curb overspending, jump-start economic growth and add jobs.

In other energy trading, natural gas is down about 6 percent on renewed concerns about bulging supplies and weak demand.

At the pump, AAA says the national average for a gallon of gasoline is $3.44. That's up nearly 17 cents from a month ago and 34 cents from a year ago.

Shell and ORTEC Sign Contract for Technical Consultancy Services

Wednesday, Feb 01, 2012

Shell Global Solutions International B.V. and ORTEC, a leading supplier in resource optimization tools and consulting services, have signed a contract to work closely together on a worldwide scale. The cooperation between Shell and ORTEC focuses on the optimization of supply chain processes and strategic decision making in up- and downstream engineering disciplines like planning & scheduling, gas field production capacity optimization, spare parts management, and cost estimating. Shell and ORTEC have already been working together in a successful way for more than 25 years.
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"The signing of the contract symbolizes the continuation of the long-lasting relation between Shell and ORTEC. Increasing global energy demand accelerates the pace of change in the oil and gas industry. Making the right decisions fast and accurate becomes evidently more important to retain a leading position in the industry. We are very proud to support Shell in this process with our modeling and fact-based consultancy services ", says Lambert van der Bruggen, CEO ORTEC Consulting Group.
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Paulus Steenkamp, Vice President Manufacturing, Production and Engineering Software, Shell Global Solutions International B.V., adds: "In Shell's drive to help secure a responsible energy future, ORTEC, with their high quality software development and technical consultancy services supports us in underpinning Shell's strategic objective to deliver leading technology solutions. This agreement secures the continuation of our relationship."
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About ORTEC Consulting Group
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The ORTEC Consulting Group, member of the ORTEC Group, assists companies and organizations to make informed, fact-based decisions based on thorough analysis. This provides decision-making confidence, which is a much-needed requirement especially when optimizing business processes. By analyzing historical data and projected forecasts, our specialist consultants can calculate scenarios that provide a clear view of the facts and figures. This information is vital for balanced decision-making and business processes optimization. For more information, visit http://www.ortec-consulting.com.
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About Royal Dutch Shell plc
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Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague and is listed on the London, Amsterdam, and New York stock exchanges. Shell companies have operations in more than 100 countries and territories with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects. For more information see: http://www.shell.com
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The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate entities. In this press release "Shell", "Shell group" and "Royal Dutch Shell" are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words "we", "us" and "our" are also used to refer to subsidiaries in general or to those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company or companies.

FTSE 100: Oil majors fuel blue-chip rebound

Oil explorers and producers helped to haul the large-caps back into positive territory as investors were heartened by robust results from a clutch of blue-chip players.
BP jumped 2.7pc and Tullow Oil advanced 3.7pc as Brent crude rose above $111 per barrel on concerns over supply from Iran and South Sudan trumped worries about a global economic slowdown that could hit oil demand.

Oil Trades Near One-Week Low on Rising Stockpiles, U.S. Outlook
February 01, 2012, 3:17 AM EST

Oil traded near the lowest price in more than a week on signs that consumer confidence and demand for fuel are slipping in the U.S., the biggest crude consumer.

Futures were little changed in New York before a U.S. Energy Department report forecast to show crude supplies gained for a second week. Data from the American Petroleum Institute indicated stockpiles rose to the highest level since November. Oil fell for a third day yesterday after the government said consumer confidence and business activity cooled. Greece pledged to prevent the collapse of a second rescue package.

“In the U.S., we have seen long-term demand destruction on gasoline that may never come back, even if the economy improves,” Phil Flynn, vice president of research at PFGBest in Chicago, said in an e-mailed response to questions. “We still have a significant Iranian risk premium. That is only being offset by European uncertainty.”

Crude for March delivery was at $98.67 a barrel, up 14 cents in electronic trading on the New York Mercantile Exchange at 2:27 p.m. Singapore time. The contract yesterday declined 0.3 percent to $98.48 a barrel, the lowest since Jan. 20. Prices slid 0.4 percent in January, falling for a second month.

Brent oil for March settlement gained 29 cents to $111.27 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures traded at $12.90, the highest since Nov. 15. That compares with a record spread of $27.88 on Oct. 14.

Crude Stockpiles

Oil in New York has technical resistance along the 50-day moving average around $99.17 a barrel today, according to data compiled by Bloomberg. Futures settled below that indicator in the previous two days. Investors tend to sell contracts close to chart-resistance levels.

U.S. crude inventories rose by 2.1 million barrels last week to 339.5 million barrels, the highest since the week ended Nov. 11, data from the American Petroleum Institute showed yesterday. An Energy Department report today may show they increased by 2.6 million barrels, according to the median of 12 analyst estimates in a Bloomberg News survey. Gasoline supplies are projected to rise 500,000 barrels, according to the survey.

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The Energy Department requires that reports be filed for its weekly survey, which is scheduled to be released at 10:30 a.m.

U.S. drivers bought 8.51 million barrels a day of gasoline in the week ended Jan. 27, according to MasterCard Inc.’s SpendingPulse report on Jan. 31. While that was up from 8.48 million the prior week, fuel demand fell below year-earlier levels for the 22nd consecutive time last week, declining 5.5 percent from 2011, the report said.

Refiner Strike

The United Steelworkers union and Royal Dutch Shell Plc agreed on a three-year contract, subject to union membership approval, averting a potential strike that would have idled as many as 69 plants.

The New York-based Conference Board’s confidence index decreased to 61.1, lower than the most pessimistic forecast in a Bloomberg News survey of economists, from a revised 64.8 the prior month. The Institute for Supply Management-Chicago Inc. said yesterday its business barometer declined to 60.2 from 62.2 in December. Readings above 50 signal growth.

The European Union has announced plans to ban Iranian oil imports starting in July and to freeze the assets of the country’s central bank as part of sanctions against its nuclear program. Iran’s Foreign minister Ali Akbar Salehi said this week that the International Atomic Energy Agency team would be visiting some of the country’s nuclear sites and could extend its stay if it needed to.

http://www.bloomberg.com/news/2012-02-01/fracking-boom-could-finally-cap-myth-of-peak-oil-peter-orszag.html

Oil hovers below $98 in Asia amid mixed signs on US crude demand strength

SINGAPORE — Oil prices hovered below $98 a barrel Thursday in Asia amid mixed signs about the strength of U.S. crude demand.

Benchmark crude for March delivery was up 1 cent at $97.62 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to settle at $97.61 on Wednesday.
Brent crude rose 30 cents to $111.86 a barrel on the ICE Futures Exchange in London.

A jump of U.S. crude inventories last week by 4 million barrels suggested oil consumption is sluggish. However, factories raised output in January by the most in seven months, the Institute for Supply Management said Wednesday while the Commerce Department said construction spending rose 1.5 percent in December, the fifth straight monthly gain.

Oil prices have hovered near $100 for the last few months amid mixed economic signs from the U.S., Europe and Asia. Some analysts expect crude to begin to rise as the global economy may grow more this year than previously expected.

“The crude oil price has become stuck in a remarkably extended period of narrow sideways trading,” Barclays Capital said in a report. “However, the market is now likely to start to position for an upside break based on a greater degree of relaxation about macroeconomic prospects.”

In other energy trading, heating oil rose 1.8 cents to $3.06 per gallon and gasoline futures were steady at $2.89 per gallon. Natural gas gained 1.3 cents to $2.40 per 1,000 cubic feet.

Shell profits up 54% on firm oil prices

Thursday 2 February 2012 08.30 GMT

Brent crude averaged more than $111 per barrel during 2011 compared with $80 in 2010, helping Shell to reap rewards despite a 3% decline in production
Concerns about corporate profiteering in the energy sector are likely to be reignited again on Thursday with Shell reporting a 54% increase in annual earnings to $28.6bn (£18bn) - £2.2m an hour.

Peter Voser, the Shell chief executive, said the final three month results for 2011, at $6.4bn, were still lower than he wanted - hit by a "sharp downturn" in refining margins and he warned: "The global economy and energy markets are likely to see high volatility."

The Anglo-Dutch oil group kept its dividend payout to investors steady at 42 cents per share but said it expected to raise this to 43 after the first three months of the new financial year - the first increase since 2009.

Brent crude averaged more than $111 per barrel during 2011 compared with $80 in 2010, helping the company to reap rewards despite a 3% decline in production.

Shell gave no figures for its petrol sales in Britain or the rest of the world and has previously argued that its profit margins on the forecourt are wafer thin as most of the pump price is made up of government tax.

But UK motorists are facing near record prices for diesel and the exit of big companies such as Shell from the British refining sector is blamed by some for making the market more volatile. Shell sold off its Stanlow refinery in Cheshire last year while the financial troubles at the smaller Swiss company, Petroplus, which bought the Coryton plant from BP has led to fears of petrol shortages in the south east of England.

Oil and power supply companies that make up the wider energy sector have been under fire for making increasing profits at a time when motorists and householders are struggling to pay their bills.

Shell shares, down around 2% to £22.30 in early trading, have risen strongly over the last 12 months - 11% over the calendar year while arch-rival BP saw a 1% decline, continuing to be hit by the fallout from the Gulf of Mexico oil spill of 2010.

Meanwhile Shell has been expanding. The company pledged to spend $100bn over four years to 2014 aimed at reversing declining oil output by concentrating on 30 major development projects to come on stream

North Sea Oil Exports to Asia at 8-Year High: Energy Markets


Q
By Grant Smith and Sherry Su - Feb 1, 2012 11:00 PM GMT

More North Sea oil is being shipped to Asia than at any time in the past eight years as prices fall to their cheapest levels in 15 months compared with Middle East alternatives.

Brent traded at $2.41 a barrel more than Dubai crude on Jan. 13, the smallest difference since October 2010, PVM Oil Associates Ltd. data show. Companies led by BP Plc (BP/) and Vitol Group have sent at least 8 million barrels of North Sea oil to Asian ports since mid-December, equivalent to six days of U.K. production, according to ship-tracking data from AISLive Ltd. That’s the most for any month since 2004, data from Galbraith’s Ltd., a London-based shipbroker, show.

Rising production in Libya, refinery closures from the U.K. to Switzerland and a drop in U.S. gasoline demand have created a surplus that’s weighing on the price of low-sulfur, or sweet, crude produced in the North Sea (EUCSFORT) and West Africa. That’s making it profitable for companies to transport the raw material more than 16,000 miles (25,700 kilometers) to Asia, where demand is outpacing the rest of the world.

“There’s a glut of light-sweet crude,” said Leo Drollas, chief economist at the Centre for Global Energy Studies, the London-based researcher founded by former Saudi Arabia Oil Minister Sheikh Ahmad Yamani. “It’s a demand-and-supply story. The return of Libya is part of it. Then there’s weak demand for gasoline in the U.S. It’s negative.”

Brent-Dubai

While still more expensive than Middle East grades, Brent’s narrowing premium is making it more attractive to Asian refiners because it’s cheaper and easier to process into higher-value products such as gasoline and diesel, according to JBC Energy GmbH, a Vienna-based consultant.

The Brent-Dubai spread, a measure of North Sea prices versus crudes typically sold in Asia, was at $3.01 yesterday, compared with an average of $5.16 in the past year, according to PVM, which tracks Brent on the ICE Futures Europe exchange and Dubai swaps in the brokered market.

The spread has narrowed as the crude grades that comprise Dated Brent have fallen. The price of Forties (EUCSFORT) dropped to 63 cents a barrel less than Dated Brent on Jan. 17, the lowest level since Oct. 24, 2010, according to data compiled by Bloomberg. It was at a discount of 9 cents yesterday, compared with an average of 37 cents more than the benchmark grade in the past 12 months. The premium of Nigeria’s Qua Iboe (AFCSQUA1) oil declined to a one-month low of $2.50 a barrel relative to Dated Brent on Jan. 20, the data show.

BP, Vitol

“North Sea Forties, the usual price-setter of Dated Brent, seems to be increasingly becoming an arbitrage crude,” analysts led by Johannes Benigni at JBC Energy wrote in a Jan. 31 report. “Substantial volumes have been sent to Asia over the last three months, with China, South Korea and Australia accounting for the bulk.”

Exports of North Sea Forties crude will swell to a 10-month high of 475,862 barrels a day this month, while shipments of Nigerian supplies will rise by 1.8 percent from January to 2.14 million barrels a day, loading programs obtained by Bloomberg News show.

BP, Europe’s second-biggest oil company by market value, and Vitol, the world’s biggest independent oil trader, scheduled supertankers from Hound Point, a terminal off the coast of Scotland, to South Korea and Singapore, on Dec. 12 and Jan. 15, respectively, according to Athens-based Optima Shipbrokers Ltd. Two more vessels were hired to load in mid-January, according to AISLive, a unit of Redhill, England-based IHS Fairplay. Officials at BP and Vitol declined to comment on oil shipments.

‘Attractive Trade’

“This is really a push from the west,” said Olivier Jakob, managing director at Petromatrix GmbH, an oil-market researcher in Zug, Switzerland. “With the return of Libya and the closure of refineries in the U.S. and Europe, the Atlantic Basin has to push some barrels out, and this is seen through the weaker Brent-Dubai spread.”

Brent, the benchmark grade for more than half the world’s oil, will start to reverse its decline against Dubai swaps as suppliers of sweet crude such as Angola and Nigeria struggle to bolster capacity, while OPEC members increase output of medium and heavy crude, curbing the advantage of shipping oil to Asia from Europe and Africa, according to BNP Paribas SA.

“Going long Brent, short Dubai appears to us an attractive medium-term trade,” Harry Tchilinguirian, the London-based head of commodity-market strategy at BNP Paribas, said in a Jan. 19 telephone interview.

Plant Closures

Refiners are shutting plants amid a slide in gasoline use in the U.S., the world’s biggest consumer of the motor fuel. Demand dropped to a seven-year low in the week ended Jan. 6, according to MasterCard Inc.

Petroplus Holdings AG (PPHN), the European refiner that filed for insolvency last month, said in December it’s closing three plants with a combined capacity of 337,000 barrels a day. That’s about 2 percent of Europe’s capacity, according to data compiled by Bloomberg. Total SA, Europe’s largest refiner, reduced its capacity in Europe by 19 percent in the five years to 2010, according to data posted on its website.

Libya’s crude production rose to 1.3 million barrels a day as of Jan. 25, state-run National Oil Corp. said Jan. 26. Output from the North African nation slumped during last year’s uprising to oust Muammar Qaddafi, from about 1.6 million barrels before the conflict began.

Huge oil drilling contract agreed

(UKPA 2nd February 2012

Oil giant BP has announced a multimillion-pound contract with a specialist offshore engineering firm for the second phase of a massive project off the Shetland Islands.

Subsea 7 will produce new pipelines for the Clair Ridge drilling project where the North Sea and Atlantic Ocean meet.

The second phase of the giant Clair field forms part of £10 billion being spent on four projects by BP and its partners Shell, ConocoPhillips and Chevron over the next five years.

At their peak, the projects are expected to provide 3,000 oil and gas supply jobs and play a part in sustaining the more than 3,500 jobs in BP's North Sea operations.

The latest contract, which includes a 14km (8.7 mile) gas pipeline, is worth around £63 million.

Around 100 jobs at Subsea 7's base in Wick have been secured by the new contract.

Offshore operations are due to get under way next year.

Scottish Secretary Michael Moore said: "This major contract underlines the confidence of the oil and gas sector and world-leading engineering firms with bases in Scotland. The construction of the pipeline is an essential step in opening up the considerable potential of the west-of-Shetland field.

"The contract award to Subsea 7 is just the latest piece of good news for the UK's oil and gas sector and its supply chain in Scotland. I welcome the investment by BP and the jobs and expertise which will be secured in the Wick facility as a result."

Subsea 7 UK vice-president Steph McNeill said: "We are pleased to be awarded this major pipeline project by BP. We look forward to helping bring on-stream the Clair Ridge project in an efficient, timely and safe manner."

Also

Subsea 7 lands £63m BP North Sea contract



By Scott Reid
Published on Friday 3 February 2012 00:00



OFFSHORE engineering group Subsea 7 has landed a fresh $100 million (£63m) contract with BP for work on a massive project off the Shetland Islands.


The Aberdeen-based firm will help produce pipelines for the Clair Ridge drilling project, which is located where the North Sea and Atlantic Ocean meet.

The second phase of the giant Clair field forms part of £10 billion being spent on four projects by BP and its partners – Chevron, ConocoPhillips and Shell – over the next five years.

At their peak, the projects are expected to provide some 3,000 oil and gas supply jobs and play a part in sustaining the 3,500-plus jobs in BP’s North Sea operations.

Subsea 7, which has a 5,500-strong workforce across the globe, has landed similarly sized contracts with BP in the past. Some 100 jobs at Subsea 7’s base in Wick have been secured by the latest deal.

Steph McNeill, the firm’s vice-president for the UK, said: “We look forward to helping bring on-stream the Clair Ridge project in an efficient, timely and safe manner.”

Scottish Secretary Michael Moore said: “This major contract underlines the confidence of the oil and gas sector and world-leading engineering firms with bases in Scotland.

“The construction of the pipeline is an essential step in opening up the considerable potential of the west-of-Shetland field.”

Subsea 7, which also has a base in Leith, was founded by Norwegian investor Kristian Siem.

2 February 2012 Last updated at 19:46 Share this pageEmail Print Share this page

1ShareFacebookTwitter.Interest in Coryton oil refinery 'encouraging'

The interest in the Coryton refinery was described as "very encouraging" by energy minister Charles Hendry.

The site halted sales after its Swiss owner, Petroplus, placed the plant into administration last week.

The plant supplies 20% of fuel in the South East.

About 850 people work at the site.

Administrators PwC announced earlier this week it had acquired a cargo of oil which will allow refining work to continue, providing a "breathing space" for the refinery.

'Crucial boost'

Mr Hendry led a meeting of politicians, business officials and unions to discuss the future of the refinery earlier.

"We have had another positive meeting at which the joint administrators updated those present on what they have achieved so far and their planned next steps," he said.

"The deal that allowed petrol and diesel to be delivered to forecourts from the refinery was a crucial boost, while the crude oil delivery acquired on Tuesday was important to maintaining refining operations.

"The collaborative approach taken by the workforce and the refinery's management has also been vital in making these things happen.

"There are critical issues to be resolved in the coming weeks."

As well as refining oil for use as fuel, the Coryton site - one of eight refineries in the UK - also imports fuel from other countries that has already been refined.

Mr Hendry said work would now focus on securing a long-term future for the site.

Oil Near Six-Week Low Before Jobs Report; Brent Premium Widens


Feb 3, 2012 8:07 AM GMT

Oil traded near a six-week low before a report forecast to show the U.S. added fewer jobs last month than in December. Brent crude’s premium to the New York price is set for the largest weekly gain in a month.

Futures were little changed in New York after dropping a fifth day yesterday, the longest losing streak since August. The U.S. added 140,000 jobs last month after gaining 200,000 in December, according to a Bloomberg News survey of economists before a Labor Department report today. London-traded Brent’s premium to West Texas Intermediate crude, the U.S. benchmark, widened 32 percent this week to the most since Nov. 12.

“Investors will be watching the release of the jobs data, which is a key leading indicator for economic activity and therefore energy demand,” said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “Concerns about demand has led to some pretty heavy selling in West Texas. Brent has held its ground, so we have seen that spread widen.”

Crude for March delivery was at $96.57 a barrel, up 21 cents, in electronic trading on the New York Mercantile Exchange at 4:02 p.m. Singapore time. The contract fell 1.3 percent to $96.36 yesterday, the lowest since Dec. 19. Prices are down 3.1 percent this week, the most since the week ended Dec. 16.

Brent oil for March settlement climbed as much as 0.4 percent to $112.54 a barrel on the ICE Futures Europe exchange. It gained 0.5 percent yesterday and is up 0.7 percent this week. The European benchmark contract’s premium to WTI was at $15.75, the widest in 12 weeks.

Cushing Supplies

West Texas futures fell this week on signs of surging stockpiles at the Cushing (DOESCROK), Oklahoma, delivery point for the New York contract as output increased in Canada and North Dakota. Inventories at Cushing climbed by 1.48 million barrels to 30.1 million in the week ended Jan. 27, the highest level since Dec. 16, according to U.S. Energy Department released Feb. 1.

The supply increase has pushed the March contract to a discount of $2.61 a barrel to December futures. This market situation, known as a contango, means later deliveries are more expensive than prompt supplies. As recently as Jan. 3, the nearer-term contract was at a premium of $1.85.

As stockpiles at Cushing increased 6.5 percent in the past two weeks, WTI’s discount to Brent crude, the European benchmark, widened to $15.71 a barrel Feb. 2 from $9.90 on Jan. 18 on the ICE Futures Europe exchange in London.

Oil and banking giants' results due

(UKPA) – 2 hours ago

The reporting season gathers pace next week when some of the UK's biggest companies unveil their annual figures, including oil giant BP, banking group Barclays and the country's largest pharmaceutical firm GlaxoSmithKline.

Hopes have been raised that BP's fourth-quarter results on Tuesday will include its first dividend increase since the Gulf of Mexico oil spill. Shares are just 2% lower than a year ago and have recovered 31% since the 2011-low in September as oil prices remained close to the 100 US dollars a barrel mark and optimism surrounding its recovery following the fatal Deepwater Horizon explosion improved.

City analysts currently forecast a fourth-quarter dividend of 8 US cents a share, up from 7 cents paid in the previous quarter, which will be watched closely as it accounts for one pound in every six invested by pension schemes. However, the supermajor's earnings are expected to have come under pressure in the final three months of the year as its refining business suffers from squeezed margins and its production levels come down amid further disposals.

The FTSE 100 listed company is forecast to report clean replacement cost profit of 7.7 billion US dollars (£4.9 billion) in the fourth quarter, compared with 7.5 billion US dollars (£4.7 billion) the previous year. This comes as production dips from 3.6 million barrels of oil a day to 3.45 million barrels a day. The group was producing more than 4 million barrels a day before the disaster.

The row over bankers' pay will reignite once again on Friday when Barclays kicks off the industry's annual results season amid reports boss Bob Diamond could pocket up to £10 million. But those hoping for a peek at Mr Diamond's pay packet are likely to be disappointed, as the chief executive's deal is not expected to be revealed until the annual report is published in mid-March.

However, the bank is reportedly set to announce plans to cut pay by up to 30% for 24,000 employees at BarCap as it responds to outrage over bankers' bonuses. Earnings for middle ranking and junior staff will be slashed.

Barclays is expected to report pre-tax profits of £4.96 billion for 2011, compared with £6.1 billion the previous year, as its powerhouse investment arm Barclays Capital was hit by volatile market conditions. Barclays shares are 26% lower than a year ago because of market turbulence, driven by increasing global recession fears, but this compares to the 50% fall in Lloyds' share price and the 35% drop at RBS.

Drugs giant GlaxoSmithKline is set to book a healthy £8 billion profit on Tuesday despite a sluggish performance in its final quarter. The economic malaise is expected to have impacted demand for its over-the-counter drugs such as Panadol painkillers and Gaviscon heartburn remedy.

Analysts expect a 1.3% rise in sales in final quarter, down on the 4% growth in the previous three months when strong sales of vaccines, such as a cervical cancer drug, helped it beat expectations.

Full-year sales are expected to be down 3% to £27.6 billion. But profits are forecast to rise 86% to £8.4 billion as it comes up against weak figures from the previous year when it paid out £4 billion in legal claims over the alleged side-effects of some of its drugs.

http://www.telegraph.co.uk/finance/oilprices/9057905/Oil-price-could-fall-to-70-in-2012-amid-volatility-Shell-warns.html

Oil near $97 as traders eye Greek debt talks



SINGAPORE (AP) — Oil prices fell to near $97 a barrel Monday in Asia amid investor concerns about Greek debt talks.

Benchmark crude for March delivery was down 53 cents at $97.31 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.48 to settle at $97.84 on Friday.

Brent crude was down 20 cents at $114.41 a barrel on the ICE Futures Exchange in London.

Traders are wary that Greece may not be able to reach a deal with bondholders for an orderly debt default. Greek political leaders are scheduled to speak later Monday about economic austerity measures brokered by European leaders and the International Monetary Fund.

Investors were cheered by evidence that the U.S. economy may grow this year more than previously expected. The Labor Department said Friday that companies hired 243,000 employees in January, the strongest job growth in nine months. The increase in hiring pushed the unemployment rate down to 8.3 percent.

The Dow Jones industrial average rose 1.2 percent Friday and Asian stock markets gained Monday.

Analysts remain concerned that crude demand in developed countries, particularly those in Europe, will be weak this year.

"Demand continues to be concentrated in the emerging markets," J.P. Morgan said in a report. "In the United States, we see structural demand contractions in gasoline as fuel efficiency measures continue to offset gains in population growth and personal income."

Investors will be closely watching a slew of corporate earnings reports this week for clues about the strength of the U.S. and global economies. Walt Disney, Coca-Cola, and Cisco Systems are scheduled to announce fourth quarter results this week.

In other energy trading, heating oil was down 0.3 cent at $3.11 per gallon and gasoline futures fell 0.5 cent to $2.91 per gallon. Natural gas slid 4.8 cents to $2.45 per 1,000 cubic feet.

Tue Feb 7, 2012 4:01am EST

* Oil spill bill hits $43 bln

* Q4 underlying profits up 14 pct year on year

* Dividend increased to 8 cents a share from 7 cents

By Tom Bergin

LONDON, Feb 6 (Reuters) - BP said it was preparing "vigorously" for lawsuits related to its Gulf of Mexico oil spill, which are due to start later this month, as it unveiled a rise in fourth-quarter earnings boosted by higher oil prices and one-off gains.

Chief Executive Bob Dudley said on Tuesday BP was ready to settle on "fair and reasonable terms" but added he was also ready to fight.

The comments came as the company unveiled fourth-quarter results which showed its estimate for the total cost of the spill rose by $1.8 billion in 2011 to $43 billion. Some analysts think the final figure could be much higher.

The increased estimate reflected higher costs of shoreline clean up, which BP said was now largely complete, and a new $500 million charge related to legal costs beyond 2012.

BP had already set aside over $1 billion to pay its lawyers, suggesting the disaster will end up a major boon for attorneys.

The London-based oil giant said it faced around 600 civil lawsuits from people in states as far away as South Carolina and Kentucky, as well as litigation from the government and Gulf Coast states.

Europe's second-largest oil group by market capitalisation said contributions from its partners in the blown-out Macondo well, Anadarko Petroleum and Japan's Mitsui, would reduce the final bill it faced.

The over $5 billion BP has received has contributed to the $20 billion fund created to compensate those impacted by the United States' worst-ever offshore oil spill, and will allow BP to end its own payments into the fund in 2012, a year earlier than expected.

Progress in meeting the costs of the spill allowed BP to announce an increase in its dividend, which had been cut at the height of the spill in 2010.

BP lifted the quarterly payout to 8 cents a share from 7 cents, backed by strong cashflows due to higher oil price.

BP said its replacement cost (RC) net profit rose 65 percent compared to the same period last year, to $7.61 billion in the quarter, boosted by a $4 billion contribution from Anadarko.

Stripping out one-offs, the result rose 14 percent to $4.99 billion, in line with an I/B/E/S consensus forecast of $4.89 billion. Rival Royal Dutch Shell Plc reported an 18 percent rise in underlying profits in the quarter while industry leader Exxon Mobil only managed a 2 percent rise.

BP's muted increase was despite a lower than expected tax rate, and a 26 percent rise in the Brent crude price in the quarter compared to the same period of 2010.

BP shares traded up 0.4 percent at 492 pence at 0840 GMT, outstripping a 0.1 percent rise in the STOXX Europe 600 Oil and Gas index.

http://www.independent.co.uk/money/spend-save/you-may-strike-it-rich-playing-oil-explorer-roulette-6774240.html

UPDATE 4-Oil at $118, supply worry trumps Europe gloom

LONDON, Feb 15 (Reuters) - Oil rose to $118 a barrel on Wednesday as real and threatened supply disruptions outweighed concern about the health of the global economy and Greece's struggle to avoid bankruptcy.

An explosion hit a pipeline in Syria on Wednesday, adding to earlier disruptions such as a strike in Yemen that has halted output at its largest oilfield and the seizure by Sudan of more of South Sudan's oil in a dispute over payment issues.

Brent crude was up 80 cents at $118.15 a barrel at 0908 GMT, having traded as high as $118.30 earlier in the session. U.S. crude rose 86 cents to $101.60.

"The oil market continues to be caught between a deterioration in the global economy and supply issues, including actual supply disruptions in Sudan," said Jeremy Friesen, a commodity strategist at Societe Generale.

"I don't think it's realistic to expect that risks in the Middle East will disappear."

Oil is also drawing support from the prospect of disruption to Iranian crude supplies as a result of worsening tensions over Tehran's nuclear programme.

Iran is the second-largest producer in the Middle East and the European Union has banned Iranian crude exports from July 1, prompting buyers of its crude to look for alternative supplies.



Supply risks far outweigh the euro zone's debt problems and will probably keep Brent above $110, Friesen said.

Euro zone finance ministers have dropped plans for a face-to-face meeting on Wednesday on Greece's new international bailout, saying party leaders in Athens failed to provide the required commitment to reform.

Time is running out for Greece as it faces a chaotic default if it cannot meet 14.5 billion euros in debt repayments due on March 20 and its brinkmanship has forced some EU leaders to suggest Athens should leave the euro zone currency union.

In a sign that the euro zone may succumb to a mild recession, figures on Wednesday showed Germany's economy contracted slightly in the last three months of the year while France eked out an anaemic level of growth.

Even so, the latest indications from the United States, suggest a firm foundation for an economic recovery. Later on Wednesday, the latest weekly U.S. oil supply report will be in focus.

The U.S. Energy Information Administration's inventory report is scheduled for release at 1530 GMT. Analysts expect crude oil stocks to rise by 1.5 million barrels.

In a precursor to the EIA report, oil industry group the American Petroleum Institute said on Tuesday crude stocks rose a more-than-expected 2.9 million barrels.

Why Moody's matters more than oil price

Trumpets were sounded, church bells rang but there was no smug air to the governor's words after news that inflation fell to its lowest level for more than a year.
"Look at us," you would have thought Mervyn King said, "we're beginning to get inflation under control and close to the 2% target."

Close, but at 3.6% it's still a good way off being there. In fact, George Osborne still made the Bank of England governor adhere to the old of rule of "if inflation's over 2% I want a personal letter telling me what the devil's going on". In essence, the governor has to write the chancellor's excuse note, one he can present to his friends or colleagues in government to explain why he was more off target than the meteorologists ahead of last weekend's match against Ireland.

It's getting easier for him because last month was the first true like-for-like comparison in Vat, given it was raised to 20% in January 2011. But George, ever the cautious and wise old fox, isn't getting carried away.

"The unwelcome contribution of sluggish growth and high inflation over the past two years is a reflection of the need for the economy to rebalance following the financial crisis and associated deep recession, together with rises in the costs of energy and imports," he wrote, probably by candle light and using a pot of ink and a quill.

"Although inflation is now falling broadly as expected, the process of rebalancing still has a long way to go. Growth remains weak and unemployment high."

More learned experts than this reporter point out that inflation is the Bank of England's focus and it'll be marked on how it has managed prices.

Knowing that any action it takes will take a while to effect, it has to be looking ahead and trying to predict what will happen two years down the line.

That's exceedingly difficult, especially when you have the likes of oil prices jumping up and down like a fiddler's elbow.

North Sea crude is through the £75 a barrel level, a high not posted since April 2011.

And with George aiming to keep international lenders happy following Moody's raised eyebrow yesterday morning, you can bet your bottom dollar, ironically, that he'll be less likely to drop any of the three 1p rises in petrol duty which are planned.

Motorists should be just as concerned about the AAA as they are with the AA.