October 20, 2006 - ASSOCIATED PRESS

Commodities may sink even further - By Ellen Simon


Commodities had a miserable third quarter and many on Wall Street say they have further to fall. That theory was bolstered when oil prices recently sank to their lowest levels for the year.

If commodities prices do sink further, it will be bad news for emerging markets and the investors who have poured billions of dollars into them over the past three years.

Commodities prices tend to have a domino effect -- lower oil prices often drag down gold prices, for instance. And lower commodities prices tend to push down stocks in emerging markets such as Russia and Brazil, which have a rich supply of oil and metals, respectively.

While many emerging markets continue to be on a roll, if the commodity bears are right, there may be plenty of pain to spread around.

While investors pulled $263 million out of gold and natural resources funds for the week that ended Oct. 4, they still have $26.9 billion in the funds.

Stephen S. Roach, Morgan Stanley's chief economist, wrote that the tidal wave of money that has flowed in recently has transformed commodities markets from good economic indicators to an asset like any other -- susceptible to hysteria and bubbles.

"Just as return-hungry investors chased these markets on the upside, they could well run like lemmings to get out on the downside," Mr. Roach wrote.

Merrill Lynch & Co.'s chief investment strategist, Richard Bernstein, agreed, saying that cheap money and heavy borrowing inflated prices in commodities. Those prices are now 60 percent above what could be explained by fundamental supply and demand, he wrote earlier this month.

Other factors that pushed prices higher, such as the U.S. housing boom and the Chinese economy, could also drive prices lower.

The decline in home construction has already hit the lumber market, where prices recently dropped to five-year lows. Metals used in home building, such as copper, are also facing price pressure.

Mr. Roach argued that a downturn for U.S. consumers could slow business for Chinese producers.

Less use in the auto industry should affect steel, aluminum, glass and rubber demand, wrote Tobias Levkovich, Citigroup's chief U.S. strategist.

If the strategists are right, investors who have seen impressive run-ups in markets such as South Africa, up more than 25 percent year to date, might consider taking some money off the table -- and away from all the other dominoes.

FT.com - October 19 2006

Oil firmer as Opec cuts output - By Chris Flood


Oil prices rose on Thursday after Saudi Arabia declared its support for a 1m-barrel-a- day cut in actual output by the Organisation of the Petroleum Exporting Countries at the cartels meeting in Qatar.

ICE December Brent rose 22 cents to $59.80 a barrel while Nymex November West Texas Intermediate gained 20 cents to $57.85 a barrel in choppy trade.

Until Saudi Arabias statement, it remained unclear whether Opec would cut from the official quota of 28m bpd or reduce actual output, which was running at about 27.5m bpd in September.

Saudi Arabia has been silent on the issue for the past two weeks but provided vital support to the cartels credibility on Thursday.

Ali al-Naimi, Saudi Arabias oil minister, said he supported a cut in actual production and also clearly signalled the possibility of a further 0.5m bpd reduction in December, when Opec will meet in Nigeria.

There is disequilibrium between supply and demand, said Mr al-Naimi: We are trying to bring the market back to normal equilibrium and the price will take care of itself.

Saudi Arabia will cut output by 0.3m bpd, limiting the effect on other Opec members such Iran and Venezuela, already struggling to reach their quota levels.

US natural gas prices were little changed after an increase of 53bn cubic feet in inventories, in line with market expectations. Gas in storage is well on track to beat the record 3,472bn cubic feet and the latest forecasts suggest a mild US winter is in prospect. Nymex November Henry Hub was fractionally higher at $6.834 per million British thermal units.

Oils strength helped the price of gold hit $600.30, its highest level for 17 days, before bullion retreated to $598.00, up 0.9 per cent on the day.

Aluminium rose 1 per cent to $2,741 a tonne, trading at the top of its range over the past four months. Technical analysts said this break above the $2,700 level could act as a catalyst for further gains.Aluminium Corporation of China - better known as Chalco - said the market for aluminia would weaken next year. Chalco would not say if it planned a further reduction in aluminia prices this year after three price reductions in recent months

Chinese aluminia output has risen by 53 per cent to 9.61m tonnes in the first nine months of the year and this has dragged international aluminia prices down by almost 50 per cent since early July.

Chalco has increased its aluminium production to try and mitigate the impact of falling aluminia prices. Chalco plans to operate 3.5m tonnes of aluminium production capacity this year from 2.6m tonnes last year as it tries to soak up rising aluminia output.

Chen Jihua, Chalcos chief financial officer, told Reuters in an interview that he expected global aluminium prices to fluctuate between $2,500 and $3,00 a tonne towards the end of the year.

Lead, zinc and nickel prices which all hit records earlier in the week remained firm just below those levels.

Barclays Capital said that, with market balances looking tight, further inventory draws were likely for base metals and new price highs could be expected to nickel, lead, zinc and aluminium in coming weeks.

Zinc rose 1.8 per cent to $3,950 a tonne. Stocks are at their lowest since 1991 and the global refined zinc market had a supply deficit of 236,000 tonnes in the first eight months of 2006, according to the World Bureau of Metal Statistics.

Nickel gained 2.8 per cent to $31,750 a tonne while lead firmed 0.7 per cent to $1,505 a tonne, but copper was unchanged at $7,650 a tonne. Tin added 1.6 per cent to $9,860 a tonne after reassurances that Bolivias new policies would not affect private mining investment.

FT.com - October 20 2006

Opec cuts output but prices fall - By Chris Flood



Oil prices were largely unmoved this week by the decision of the Organisation of the Petroleum Exporting Countries to cut output by a larger-than-expected 1.2m barrels a day, suggesting that the crude market may have found support close to the $60 a barrel level after falling more than 25 per cent in the past two months.

Opec agreed to cut output to 26.3m barrels a day, if fully implemented, on November 1. Saudi Arabia, the worlds biggest oil producer, warned a further production cut of 0.5m b/d day could be made in December when the cartel is due to meet in Nigeria as the oil grouping signalled its determination to defend crude prices about the $60 a barrel level.

ICE Brent for December delivery slipped 79 cents to $60.07 a barrel in mid-afternoon London trade on Friday, marginally higher on the week.

November West Texas Intermediate crude futures, which expired at the close of trade on Friday dropped 74 cents to $57.75 a barrel in late morning trade on the New York Mercantile Exchange, leaving it virtually unchanged on the week. Even the December WTI contract was relatively steady on the week at $60.33.

Opec needs to take action on quotas for it to have a lasting impact on price, said Michael Lewis of Deutsche Bank; Since 1993, the cartel has sanctioned ten official cuts in its quotas to defend the oil price. We find that quota reductions have been successful 70 per cent of the time in defending or pushing oil prices higher. However, this success rate falls significantly in an environment of weakening global growth, such as in 1998 and 2001.

Michael Shaoul, chief executive of Oscar Gruss, a New York investment research group, said oil markets were in a bearish mood as oil demand growth appeared to be slowing.

If Opec had announced a cut three months ago when the world was more concerned about Irans nuclear plans and the conflict in Lebanon, the oil price would have risen sharply. The reason [for] such a limp response [is] the fact that the oil market appears to be well-supplied, he said.

Gold briefly popped above the $600 a troy ounce level this week after a temporary rally in the oil price following the Opec production cut. Gold has tracked the oil price more closely in recent months since investors view the oil price as a measure of inflation a perception not universally shared.

The yellow metal slipped about $3 yesterday to $595.80/$596.80 in mid-afternoon London trade, up $6 on the week.

Many base metals reached new record highs or long- term peaks this week as a result of low inventories and firm demand. The most spectacular riser was tin, the smallest market on the London Metal Exchange in terms of trading volume and metal production.

The price of tin, which is mainly used for soldering in electronic goods, jumped more than 10 per cent on Monday to a 17-year high of $11,000 a tonne after a clampdown by Indonesia, which produces about a third of the worlds tin on smelters that operate without the proper permits.

After falling later in the week, tin was unchanged yesterday at $9,950 a tonne. CRU, the metals consultancy, said in a report for the International Tin Research Institute that world tin consumption between January and June 2006 was 189,300 tonnes, almost 30,000 tonnes higher than in the same period in 2005.

The three-month nickel price touched another record high of $32,550 a tonne on the London Metals Exchange, up 140 per cent this year and about 6 per cent higher on the week at $32,000. On Friday, the three-month LME zinc price moved within $2 of its record high of $4,010 a tonne earlier in the week, ending the day at $3,970, up more than five per cent on the week.

Even lead has turned from a laggard to a strong price-mover, reaching a record high of $1,545 a tonne on Tuesday before easing to $1,509.5 on Friday, up more than 1 per cent on the week.

The rally in the smaller base metals helped lift the copper price, which has been at the forefront of the three-year base metals price boom. Copper eased $15 to $7,646 a tonne on Friday but was up more than $180 on the week.

Wheat futures in the US continued to reach 10-year highs this week with the December soft red winter wheat contract touching $5.57 a bushel on the Chicago Board of Trade. It was trading at $5.10 on Friday.

Oct. 20 - (Bloomberg)

Oil Tumbles Below $57 on Skepticism OPEC Will Make Output Cuts - By Mark Shenk


Crude oil fell below $57 a barrel in New York for the first time this year as traders said OPEC members will fail to cut production by 1.2 million barrels a day as planned.

The 4.4 percent reduction starting Nov. 1 will be based on how much members were pumping last month, rather than quotas, United Arab Emirates Oil Minister Mohamed al-Hamli, who will become president of the group in 2007, said after members met in Doha, Qatar. Prices have plunged 28 percent from the record of $78.40 a barrel reached July 14.

``I'll be surprised if we see them cut even half the volumes promised,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``If prices stay at this level for a few weeks we'll probably see some of the weaker members such as Venezuela and Algeria forget about their pledges.''

Crude oil for November delivery fell $1.68, or 2.9 percent, to $56.82 a barrel on the New York Mercantile Exchange, the lowest close since Nov. 29. Futures are down 3 percent this week and 6.9 percent from a year ago. The November contract expired today. The more-active December contract fell $1.17, or 1.9 percent, to close at $59.33 a barrel.

``The OPEC announcement may help explain why the spread between the November and December contracts grew today,'' said Jason Schenker, an economist with Wachovia Corp. in Charlotte, North Carolina. ``OPEC's cuts may have an impact but we won't feel it until December at the earliest.''



Expected Reduction

OPEC's cutback was larger than the reduction that ministers had been talking about for the past two weeks and was endorsed by OPEC's biggest producer, Saudi Arabia, which will trim output by 380,000 barrels a day.

``We needed more to stabilize the market,'' Algerian Oil Minister Chakib Khelil said after the meeting. Members are ``unanimous'' that they need to ensure price stability, OPEC President and Nigerian Oil Minister Edmund Daukoru told reporters today in Madrid. OPEC ministers are concerned about falling prices and rising U.S. stockpiles, Abdullah bin Hamad al-Attiyah, Qatar's oil minister, said in a phone interview on Oct. 11.

``When we advertised 1 million, the market didn't respond, so something more had to be done,'' Daukoru said in an interview.

OPEC may need to cut an additional 300,000 barrels a day when the group meets Dec. 14 in Abuja, Nigeria, Venezuelan Oil Minister Rafael Ramirez said today.



Appropriate Cut

``The cut seems appropriate given the increase in stockpiles,'' said Aaron Kildow, a broker at Prudential Financial Derivatives LLC in New York. ``The most bullish thing to come out of the meeting was the announcement that they may cut again when they meet in December.''

Prices may fall next week on doubts the producer group will cut production enough to reduce excess supplies, according to a Bloomberg News survey yesterday, before OPEC announced its decision. Twenty-one of 49 analysts, traders and brokers, or 43 percent, said prices will decline. Fourteen forecast an increase and 14 predicted little change.

``A cut of 1 million barrels was factored in so it looks like they decided to cut more to get the market's attention,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Tilburg, the Netherlands. ``I doubt there will be a dramatic up-tick in prices because inventories are so high and uncertainty about what the members will actually cut.''

U.S. crude oil inventories surged 5.02 million barrels to 335.6 million last week, the Energy Department reported Oct. 18. It was the biggest increase since March and left stockpiles 14 percent higher than the five-year average for the week, the department said. The U.S. consumes 25 percent of the world's oil.



Heating Season

``Demand should rise in coming weeks because of the approach of heating season,'' Kildow said.

Global consumption peaks during the Northern Hemisphere winter, when furnaces are stoked. The International Energy Agency, which advises 26 industrialized nations on energy policy, said OPEC's decision was ill-timed because demand will increase as the heating season nears.

``I think this cut comes at the worst time possible,'' IEA Executive Director Claude Mandil said today in a phone interview. ``I don't like the idea of OPEC trying to defend prices of $60 a barrel.'' That is not ``helpful'' to consumer nations and poorer countries, he said.

Brent crude oil for December fell $1.19, or 2 percent, to close at $59.68 a barrel on the London-based ICE Futures exchange.

The Times - October 21, 2006

Price of oil falls in spite of Opec cuts - By Carl Mortished, International Business Editor


The cut, that the cartel would reduce its output by 1.2 million barrels a day, was agreed by Opec ministers but failed to impress the markets. SCEPTICAL oil traders pushed down the price of crude oil yesterday, appearing to ignore an announcement by Opec that the cartel would reduce its output by 1.2 million barrels a day.

The cut, bigger than expected, was agreed by Opec ministers on Thursday night but failed to impress the crude oil markets. US light crude dipped 65 cents to $57.85.

The unscheduled meeting of the cartel in Qatar was intended to arrest the tumbling price of a barrel of crude oil, which has lost more than a quarter of it value since the price peaked at $78 in mid-July.

Saudi Arabia will shoulder most of the burden for the cut, which represents just over 4 per cent of the current output of about 27.5 million barrels per day. In an attempt to bolster the market impact of the agreed cut, Ali al-Naimi, the Saudi Oil Minister, pointed to further action. The is not the end of the road beacause we have another meeting coming up, he said. A further cut of 500,000 bpd is being mooted for consideration in December.

Opec is fearful that a glut of crude and oil products is building in the northern hemisphere, an oversupply that will prevent winter destocking and cause prices to tumble further.

Opecs move suggests a desire to maintain prices at a level of $60, well below recent highs but enough to allow Opec member states to keep cash flowing fast enough to avoid domestic political discontent.

FT.com - October 23 2006

Oil retreats towards lowest level this year - By Chris Flood


Oil prices fell by $1 a barrel on Monday, trading close to their lowest levels this year, amid scepticism that the 1.2m barrel a day cut in output announced last week by the Organisation of the Petroleum Exporting Countries would be fully implemented by the cartels members.

In the approach to last weeks Opec meeting, hedge funds were betting that crude prices would weaken further with the latest data from the Commodity Futures Trading Commission showing that speculative positions in crude moved to a net short position from a net long position in the previous week.

ICE December Brent fell $1 to $58.68 a barrel while Nymex December West Texas Intermediate dropped $1.04 to $58.29 a barrel.

Opec also suggested there could be a further output reduction of 500,000 b/d in December but some analysts pointed out that the cartels discipline in sticking to output targets in the past had been lax.

The market is highly sceptical that Opec will deliver the promised cuts in crude oil production, said Tobin Gorey, of Commonwealth Bank of Australia.

Saudi Arabia is expected to reduce output by 380,000 b/d, implementing almost one-third of the total Opec cut. Saudi Arabia has told core customers in Asia that supplies will be cut by up to 8 per cent from next month, removing 250,000 b/d from the market. However, some dealers believe those countries which are already operating below their quota levels (Venezuela, Indonesia and Nigeria) will not participate fully in the output cuts, potentially jepordising the new agreement.

The cuts include reductions from countries that are already struggling to meet their quota, immediately raising doubts they will be strictly adhered to, said Lucas Herrmann of Deutsche Bank.

Under pressure from oils weakness, gold fell 2 per cent to $583.70 a troy ounce but there was some evidence of physical demand improving after Indian gold imports soared by 123 per cent to 156 tonnes in the month ahead of the Diwali Festival.

Other precious metals shared golds weak tone, with silver at $11.62 a troy ounce. Platinum and palladium were at $1,067 and $315 a troy ounce, respectively.

The latest data from the Commodity Futures Trading Commission showed that speculative open interest (sum of long and short positions) for all four precious metals fell last week as investors reduced their exposure.

John Reade of UBS said positioning in precious metals was greatly reduced from its peak levels earlier this year but there seemed little sign of investors and speculators wanting to rebuild long positions.

Nickel rose 1.1 per cent to $32,400 a tonne after it hit a new record at $32,700 earlier in the session. Available nickel inventories, at 3,282 tonnes, are less than one days worth of global consumption and ongoing strike action is affecting French producer Eramets smelter in New Caledonia in the Pacific. Eramet is 60 per cent owner of Societe Le Nickel, which produces about 5 per cent of world nickel concentrate production.

Zinc retreated 1.1 per cent to $3,925 a tonne in spite of a fall of 2,500 tonnes in LME stocks. Further price appreciation is expected if stocks shrink below 100,000 tonnes from the current 122,400 tonnes level.

Tin added 2.5 per cent at $10,400 a tonne amid continued concerns about disruptions to supplies from Indonesia, where the government has shut about 20 small smelters that were operating without proper permits.

Copper was rangebound, just 0.2 per cent weaker at $7,545 a tonne while aluminium eased 0.4 per cent to $2,707.

Oct. 23 - (Bloomberg)

Oil Falls a Second Day on Skepticism OPEC Will Make Output Cuts - By Mark Shenk


Crude oil fell for a second day on skepticism that the Organization of Petroleum Exporting Countries will cut production by as much as members pledged last week.

OPEC's reductions will be ``significantly less'' than agreed, amid doubts some members of the group will act at all, the London-based Centre for Global Energy Studies said in a report today. OPEC, which pumps about 40 percent of the world's oil, said on Oct. 20 that members would collectively cut output by 1.2 million barrels a day to prop up prices.

``If OPEC is going to be an effective organization it will have to send a clear signal that it will follow through with these cuts,'' said Phil Flynn, vice president of risk management with Alaron Trading Corp. in Chicago. ``The Saudis are telling customers that they can expect less oil but we have yet to see any movement from the smaller OPEC members.''

Crude oil for December delivery fell 52 cents, or 0.9 percent, to close at $58.81 a barrel on the New York Mercantile Exchange. Futures are down 3 percent from a year ago. Prices have plunged 25 percent from the record of $78.40 a barrel reached July 14.

U.S. stocks surged, extending October's record-breaking rally, as falling oil prices bolstered speculation that consumer spending will sustain the economy. The Dow Jones Industrial Average reached a record, rising 122.79, or 1 percent, to 12,125.16 at 12:42 p.m. in New York.

CGES, which was founded by former Saudi oil minister Sheikh Zaki Yamani, said OPEC's determination to reduce supply shows the organization is trying to defend a price of ``at least $55 a barrel for its basket of crude oil grades.'' The OPEC basket price stood at $54.56 on Oct. 19.



Saudi Exports

Saudi Arabia will cut shipments to Japan, its largest customer, in November for the first time in more than two years after last week's decision by OPEC's members. Supplies to Japanese refiners will be reduced as much as 8 percent below contractual volumes, refinery officials said.

``I'm surprised that OPEC is being given such a hard time,'' said Bill O'Grady, director of fundamental futures research at A.G. Edwards & Sons Inc. in St. Louis. ``The news from Asia shows that the Saudis are on board, but doubts about other members remain.''

OPEC's Oct. 20 statement said 10 of its members, all except Iraq, would ``reduce production by an amount of 1.2 million barrels a day, from current production of about 27.5 million barrels a day, to 26.3 million barrels a day, effective 1st November 2006,'' adding that the decision would be subject to review at a Dec. 14 meeting in Abuja, Nigeria.



Reducing Shipments

``The Saudis immediately informed customers that they will reduce shipments and OPEC made it clear that they were open to a follow-up cut in December, which signals that they are serious about supporting prices,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``OPEC production cuts don't have an immediate effect on the U.S. market.''

Supplies climbed 2.9 million barrels in the week ended Oct. 20, from 335.6 million the prior week, according to the median of forecasts by 10 analysts surveyed by Bloomberg News. The Energy Department is scheduled to release its weekly inventory report on Oct. 25.

Brent crude oil for December settlement fell 47 cents, or 0.8 percent, to $59.21 a barrel on the London-based ICE Futures exchange, the lowest close since Oct. 12.

FT.com - By Chris Flood


Oil prices staged a modest rebound on Tuesday, helped by news that the Abu Dhabi National Oil Corporation will cut crude exports by 5 per cent next month.

The reduction comes the United Arab Emirates implements the output cut announced last week by the Organisation of the Petroleum Exporting Countries.

Edward Meir of Man Financial said that for Opecs cutbacks to bite, the market would need to see a reduction in inventories or a resurgence in demand but neither appeared to be happening as yet .

ICE December Brent rose 35 cents to $59.56 a barrel while Nymex December West Texas Intermediate added 33 cents at $59.14 a barrel.

Francisco Blanch, commodity strategist at Merrill Lynch, said downside risks to oil prices were mounting as inventory levels were well above last year in both the US and Europe and spare production capacity (both Opec and non-Opec) was poised to expand significantly.

FT.com - October 31 2006

Oil falls as funds sell down exposure - By Kevin Morrison


Oil prices fell back below $60 a barrel, falling more than $2, on Monday after investment funds sold down their exposure before planned production cuts by the Organisation of the Petroleum Exporting Countries come into effect.

ICE Brent futures for December delivery dropped $2.03 to $59.05 a barrel in late afternoon trade in London. December West Texas Intermediate dropped $1.97 to $58.78 a barrel in early afternoon trade on the New York Mercantile Exchange.

Kevin Blemkin, energy broker at Man Financial, said fund selling had caused oil prices to fall.

Funds were early sellers this morning, and when Brent and WTI fell through $60 is brought in more sellers as some key technical support levels were broken, Mr Blemkin said.

Data from the Commodity Futures Trading Commission showed that speculators in the WTI contract had cut their long positions or bets on prices moving higher by more than 52,000 contracts, as more speculators betted on falling prices.

The fall in long positions came in spite of the pledge by Opec to cut exports. Saudi Arabia, the worlds biggest oil exporter, and the United Arab Emirates last week informed customers of supply cuts.

Oct. 31 (Bloomberg)

Oil Trades Below $59 After Plunging on U.S. Supply Forecasts - By Christian Schmollinger and Angela Macdonald-Smith


Crude oil traded below $59 a barrel after posting the biggest one-day decline in more than a year yesterday on forecasts that warm U.S. weather will curb demand and bolster stockpiles.

Higher-than-usual temperatures are expected in most of the U.S. from Nov. 6 until Nov. 12, the National Weather Service reported. U.S. crude inventories, already 12 percent above their 5 year average, probably rose 2.7 million barrels last week, according to a Bloomberg News survey.

``Crude oil inventories in the U.S. and all over the world are sufficient,'' said Tetsu Emori, chief commodity strategist at Mitsui Bussan Futures Ltd. in Tokyo. ``The oil price is losing momentum.''

Crude oil for December delivery traded at $58.42 a barrel, up 6 cents, in after-hours electronic trading on the New York Mercantile Exchange at 1:14 p.m. Singapore time. Yesterday, the contract fell $2.39, or 3.9 percent, to $58.36, the biggest one- day decline since Aug. 17, 2005.

Prices have fallen 25 percent from a record $78.40 a barrel reached July 14 when fighting between Israel and Hezbollah militants in Lebanon raised the possibility of supply disruptions from the Middle East. Since then, rising global stockpiles and a calm U.S. hurricane season have eased concerns.

``You get a forecast for warmer weather and down prices come,'' said Rowan Menzies, a commodity market analyst at Commodity Warrants Australia Pty in Sydney. ``The U.S. looks pretty well supplied as of today.'

In London, Brent crude oil for December settlement was up 5 cents to $58.73 a barrel on the ICE Futures exchange at 1:19 p.m. Singapore time.



U.S. Stockpiles

U.S. crude oil stockpiles unexpectedly fell in the week ended Oct. 20 when the Louisiana Offshore Oil Port, the largest U.S. import terminal, shut because of bad weather. The port, which was closed for about 70 hours, caught up on imports in about two days.

U.S. stockpiles of crude oil, diesel, heating oil and gasoline in the week ended Oct. 20 were higher than the five- year average for the period, the Energy Department said last week.

The forecast for mild temperatures in the U.S. Northeast is delaying the expected rise in demand as the coldest winter weather period approaches, said Andrew Harrington, an industrials analyst at Australia & New Zealand Banking Group Ltd. in Sydney.

``You'd be looking for late December-January to be the big cold period in the Northeast of the U.S. and we should start seeing some increase in demand heading into that period,'' Harrington said. ``It seems to be a bit slower in coming than usual. Some anticipation of that had been built in to the price and now we're seeing it being taken out again.''



OPEC Cuts

The decline in oil prices since mid-July prompted the Organization of Petroleum Exporting Countries, which produces about 40 percent of global supply, to agree to reduce output by 1.2 million barrels a day starting Nov. 1. OPEC ministers will review their cuts when they next meet on Dec. 14.

Saudi Arabia, the biggest oil producer, will definitely implement the 1.2 million barrel-a-day reduction in output that the group announced earlier this month, Khalid al-Falih, a senior vice president with state-run Saudi Aramco, said yesterday.

``There will be no delaying, no backpedaling,'' al-Falih said at a meeting with U.S. oil company officials in Washington.

Oil prices also fell yesterday because of waning concerns about the security of Saudi Arabia's Ras Tanura oil terminal, Menzies said.

Naval forces from the U.S.-led coalition were sent to protect the terminal after the threat of a terrorist attack from the sea, reports said.

Nov. 2 (Bloomberg)

Crude Oil Falls After Report Shows Increase in U.S. Inventories - By Christian Schmollinger


Crude oil fell in New York after a government report showed increased supplies in the U.S., the world's largest energy consumer.

Crude inventories rose to 334.3 million barrels, leaving supplies 12 percent higher than the five-year average for the week, the Energy Department reported yesterday. Demand for heating oil, diesel and gasoline remained near two-month highs.

``We're still waiting for winter to kick in because that's when the market gets interesting again,'' said Gerard Burg, economist with National Australia Bank Ltd. in Melbourne. ``Until the demand for heating oil picks up, we're in a bit of lull period.''

Crude oil for December delivery fell as much as 26 cents, or 0.4 percent, to $58.45 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $58.47 at 1:44 p.m. Singapore time.

Brent crude oil for December settlement fell as much as 21 cents, or 0.4 percent, to $58.77 a barrel on the London-based ICE Futures exchange. It traded 16 cents lower at $59.82 a barrel at 1:23 p.m. Singapore time.

U.S. oil inventories rose 1.9 million barrels, the department said. A gain of 2.6 million barrels was forecast in a Bloomberg News survey of 14 analysts.

Supplies of gasoline and distillates fell more than expected. Distillate stockpiles, including heating oil and diesel, fell 2.72 million barrels to 141.3 million, 13 percent above the five- year average. Gasoline supplies declined 2.8 million barrels to 204.6 million, 2.3 percent more than average.

FT.com - November 9 2006

Oil rises as distillate stocks fall - By Kevin Morrison


Crude oil futures rose by more than $1 a barrel on Wednesday after a bigger-than-expected fall in US distillate inventories, which includes diesel and heating oil.

Prices were also helped by comments from Saudi Arabia suggesting the market remained oversupplied with crude in spite of the recent 1.2m barrel-a day cut by the Organisation of the Petroleum Exporting Countries.

The weekly US crude and petroleum product inventory data showed distillate fuel inventories dropped by 2.7m barrels, but are just above the upper end of the average range for this time of year.

US crude inventories rose 400,000 barrels to 334.7m barrels, which is well above the upper end of the average range for the time of year. The report also said total petrol inventories declined by 600,000 barrels, but remain at the upper end of the five-year average range.

ICE December Brent added $1.01 to $59.49 a barrel in late London afternoon trade. December West Texas Intermediate gained 96 cents to $59.89 a barrel in early afternoon trade on the New York Mercantile Exchange.

US petroleum products also made large gains with the December Nymex Rbob gasoline contract gaining 4 cents to $1.5740 a gallon, and the December heating oil contract up 3.7 cents to $1.7180 a gallon.

Although the Opec cut only came into effect at the start of the month, US oil imports have already fallen, showing the global market is tightening. US crude oil imports averaged 9.8m barrels a day last week, down 306,000 from the previous week, and below the four-week average of 10m b/d.

can anyone tell me were i can get the price of oil from, the futures link on moneyam is all wrong....

Tonker, see the top of this thread. At the moment it is detailed as : LAST 59.59

Nov. 11 (Bloomberg)

Oil Falls the Most This Month After IEA Cuts Demand Forecast - By Mark Shenk


Crude oil fell the most this month after the International Energy Agency cut its demand forecast for the third consecutive month.

World oil demand this year will average 84.49 million barrels a day, 80,000 barrels a day less than estimated last month, the Paris-based agency said today. Slower growth in Chinese use of transport fuels, especially gasoline, was behind the revision, the IEA said. China, the world's second-biggest oil consumer, is still expected to drive growth this year and next.

``The IEA has cut its demand forecast for three months in a row, which could be the start of a trend,'' said Kyle Cooper, director of research at IAF Advisors in Houston. ``This is very different from 2004 and 2005 when we saw demand revised higher repeatedly. This may be evidence that these high prices are putting a lid on demand growth.''

Crude oil for December delivery fell $1.57, or 2.6 percent, to close at $59.59 a barrel on the New York Mercantile Exchange, the biggest decline since Oct. 30. Prices are up 0.8 percent this week and are 3.1 percent higher than a year ago. Futures have traded in a range of $56.55 to $61.79 for the past month.

Oil has plunged 24 percent from the record of $78.40 a barrel reached July 14 amid concern that fighting in Lebanon would spread through the Middle East, source of a third of the world's oil. Since then, the Lebanese cease fire, rising supplies and a calm Atlantic hurricane season have caused the price decline.



Demand Growth

World oil demand growth is expected to be 1.1 percent this year, less than the 1.2 percent in last month's report. Growth in 2007 annual demand was left unchanged at 1.7 percent, the IEA estimated. The agency was set up in 1974 to advise industrialized nations on energy policy.

The Organization of Petroleum Exporting Countries, which produces about 40 percent of the world's oil, will take less supply than it sought, the IEA said. The 11 members of OPEC, meeting on Oct. 20 in Qatar's capital Doha, said they would cut production by 1.2 million barrels a day starting Nov. 1, to check the decline in prices.

OPEC's crude oil production fell 340,000 barrels a day, or 1.1 percent, in October, to 29.37 million barrels a day, the IEA said. Between 600,000 to 900,000 barrels a day might be removed from the market as a result of last month's agreement, according to the agency.

``The problem with today's IEA report is the numbers we really want to see will be released roughly a month from now,'' said Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut, energy consultant. ``We want to know how well they are abiding by the agreement.''

OPEC is next scheduled to meet in Abuja, Nigeria, on Dec. 14.



Warm Weather

Warm weather in the Northeast has reduced demand for heating oil in the region, which is responsible for 80 percent of U.S. consumption of the fuel. Home-heating use there will be 35 percent below normal through Nov. 17, said Weather Derivatives, a forecaster in Belton, Missouri.

``The market is still range bound,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``We are being pulled in two directions. The warm weather is bearish and the drop in product stockpiles is very bullish.''

U.S. diesel supplies dropped 2.92 million barrels in the week ended Nov. 3, the Energy Department reported on Nov. 8. Diesel inventories have plunged 12 percent in the past four weeks. Gasoline supplies slipped 584,000 barrels to 204 million last week, the report showed.

Brent crude oil for December settlement fell $1.61, or 2.6 percent, to close at $59.71 a barrel on the London-based ICE Futures exchange.

Nov. 17 (Bloomberg)

Crude Oil Trades Near One-Year Low on Doubts About OPEC Cuts -
By Hector Forster and Nesa Subrahmaniyan


Oil, set for its biggest weekly decline since October 2005, traded near a one-year low on speculation OPEC will exceed its production target.

Crude plunged 4.3 percent yesterday after Halifax, England- based consultant Oil Movements said November shipments by the Organization of Petroleum Exporting Countries will rise. OPEC last month agreed to cut output by 1.2 million barrels a day, or 4.4 percent.

``OPEC has to get their act together,'' said Anthony Nunan, deputy general manager for international petroleum business at Tokyo-based Mitsubishi Corp., Japan's biggest trading house. ``That's what the market's saying.''

Crude oil for December delivery fell as much as 27 cents, or 0.5 percent, in after-hours electronic trading on the New York Mercantile Exchange, to $55.99 a barrel, taking the decline this week to 6 percent, the largest drop since the week ended Oct. 7 last year.

Yesterday, the futures slumped $2.50 to $56.26, the biggest one-day decline since Aug. 17, 2005. The December contract expires today.



Oil Movements

OPEC's shipments rose 0.9 percent in the month to Dec. 2 to 24.8 million barrels a day from 24.6 million barrels a day in the four weeks ended Nov. 4, Oil Movements said in a weekly report yesterday.

Above-average temperatures will cover the northern third of the U.S. from coast to coast this winter as an El Nino weather pattern persists, the U.S. Climate Prediction Center said yesterday in a report that covers December through February. A warmer-than-normal winter in the region would reduce demand for fuels used to run household and commercial furnaces.

``The temperature situation in the U.S. is not helping,'' said Andrew Harrington, a commodities analyst at Australia & New Zealand Banking Group Ltd. in Sydney.

El Nino refers to the warming of the ocean surface off the western coast of South America. The phenomenon affects the jet stream, alters storm tracks and creates unusual weather patterns. A moderate to strong El Nino typically brings mild winters to the northern U.S.

FT.com - November 17 2006

Crude falls after natural gas data - By Chris Flood


Oil prices reversed early strength and retreated on Thursday after the release of the latest US weekly natural gas inflows added to record stock levels as winter approaches.

ICE January December Brent fell 77 cents to $59.84 a barrel. Nymex December West Texas Intermediate, due to expire today, dropped $1.08 to $57.68 a barrel, but there was more trading volume in the January WTI contract, down 80 cents to $59.92 a barrel.

Crude has been range trading since the start of October. The decline in crudes price volatility in recent months is in line with equities and bonds but contrasts with increased volatility for some metals and agricultural products.

Rangebound trading has led to the virtual disappearance of speculative long positions in the crude market. But Francisco Blanch, commodity strategist at Merrill Lynch, said the current stability of crude prices might not last long due to a strong outlook for demand growth in emerging markets, an energy investment shortage and weaker production growth from non-Opec countries.

Analysts at Barclays Capital said: The market is ultimately going to face over-tightening and the longer it takes before a more significant move up, the more vicious is likely to be the whiplash when they do start to move.

Nymex December Henry Hub fell 25 cents to $7.867 per million British thermal units after the Energy Information Administration said gas in storage rose 5bn cubic feet last week.

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