Oil & Gas 01 (May 08 - Jul 08)

[kennynah]

14 May 2008 17:35 GMT

OIL: Sources noting that NYMEX has announced an increase in margin on
heating oil contracts, effective Thursday. Meantime, crude oil trades at
$124.60, down $1.20.

[kennynah]

14 May 2008 15:19 GMT
Oil falls as U.S. energy stocks rise
LONDON (Thomson Financial) - Oil fell after U.S. distillate inventories, including heating oil, rose above expectations and crude stocks in the world's top consumer grew last week.

Oil on Tuesday hit a record of $126.98, partly on a rally in the distillate market. However, prices plunged Wednesday, immediately after the U.S. Energy Information Administration reported distillate stocks, which include heating oil, increased by 1.4 million barrels, against predictions for a 750,000 barrel gain.

"The larger than expected build in distillate stocks came on higher production and imports, versus somewhat weaker demand," said Tim Evans, energy analyst for Citi Futures Perspective.

Elsewhere in the report, crude oil inventories in the United States rose by 200,000 barrels in the week to May 9 and gasoline stocks fell by 1.7 million barrels.

At 3:54 p.m., New York-traded West Texas Intermediate crude for June delivery was down $1.12 cents at $124.68 a barrel.

In London, Brent crude for June delivery was down $1.60 at $122.50.

Looking ahead, the market will keep a close eye on U.S. gasoline inventory as the driving season kicks off in late May.

On Tuesday, oil's record was reached on news that Iran, the world's fourth-biggest oil producer, is mulling a cut in production by up to 1 million barrels per day. Although those claims have been refuted by the country's oil minister, traders remain on edge.

"Whilst the Iranian oil minister was quick to refute suggestions of imminent cutbacks, the fragility of the market in respect of threats to supply coming on the foot of Middle East tensions and disruptions in Nigeria has resulted in an environment where the mere hint of geopolitical difficulties will inevitably result in a bullish surge," said Bank of Ireland analyst Paul Harris.

[HengHeng]

My comments : Like real , assuming if they don't try to be funny and jack prices of oil up they won't be in this state.

Now that they are running out of water , it is just a matter of time before they will be subjected global food inflation. They used to be self sufficient in food but they soon need to import food. I believe people would be charging a premium on middle eastern oil producing countries in time to come.

Now we can look into water membrane technology companies. Water would be the next commodity to look into as the world runs out of fresh water.

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Naimi Blames Oil Price on Financial Market Turmoil (Update2)

By Shinhye Kang and Ayesha Daya

May 15 (Bloomberg) -- Turmoil in financial markets is to blame for record oil prices, rather than a shortage of supply in a world that's seen the doubling of crude oil reserves since 1980, Saudi Arabian Oil Minister Ali al-Naimi said.

``Oil and other commodity markets are becoming increasingly more interconnected with the financial markets where rapid developments in the latter have intensified oil price volatility,'' he said in a speech today in South Korea, where he received an honorary doctorate from Seoul National University.

Oil prices have doubled in the past year on surging demand, disruptions to supply in places such as Nigeria and commodity purchases by investors as a hedge against a weakening U.S. dollar. Oil futures traded in New York reached a record $126.98 a barrel on May 13. New York oil was 78 cents higher at $125 a barrel as of 10:10 a.m. London time.

Demand for oil continues to rise in emerging markets even as prices reach a record, Naimi said.

Asian oil consumption is expected to increase by 20 million barrels a day by 2030, he said, accounting for almost two-thirds of the projected increase in global oil demand, predominantly met by Middle Eastern output. Asia's gain in demand is more than twice the current production of Saudi Arabia, the world's largest oil exporter.

New Oil Supplies

Bringing new oil supplies on stream, which costs more to produce, is also contributing to current price levels, the minister said. ``Increasing costs of production, refining and other related infrastructure bottlenecks, as well as the rush into costly alternatives such as biofuels in some countries are increasing the costs of the marginal barrel worldwide.''

U.S. President George W. Bush is on his way to Saudi Arabia where he will raise concern over high oil prices during his meetings with King Abdullah tomorrow. His first trip to the country this year on a similar quest did not yield additional oil. Naimi said at the time the kingdom would boost production only if the market justified it.

The Organization of Exporting Countries, which supplies more than 40 percent of the world's oil, has left oil output targets unchanged at its past three meetings on March 5, Feb. 1 and Dec. 5, saying supply was adequate. OPEC oil ministers have so far been adamant there is no need for any change in official policy before the next scheduled gathering in Vienna on Sept. 9.

Higher Output

OPEC's last production increase, of 500,000 barrels a day, was agreed in September last year and took effect Nov. 1. The 13-member group pumped 32.1 million barrels of crude oil a day in April, according to Bloomberg estimates, of which Saudi Arabia produced 9.1 million barrels.

Saudi Arabia plans to boost oil production capacity to 12.5 million barrels a day by 2009 and is investing $90 billion dollars until 2012 to raise oil output and building new refineries, Naimi said, reiterating previous comments.

The country plans to raise refinery capacity by 50 percent to more than 3 million barrels a day by 2013 to meet local and global demand for oil products such as gasoline and diesel. State-owned Saudi Aramco and Total SA will begin to build one of three new refineries in the kingdom, producing 400,000 barrels a day of refined products in Jubail, the companies said yesterday.

[kennynah]

15 May 2008 09:53 GMT
Oil rises as dollar weakens, Chinese diesel demand seen rising


LONDON (Thomson Financial) - Oil bounced from yesterday's lows to trade higher as the dollar weakened against the euro and amid expectations increased demand from China in the wake of Monday's earthquake will tighten the distillates market.

The dollar wilted against the euro this morning as the single currency soared on news that Germany, Europe's largest economy, had posted its highest quarterly GDP in 12 years. A weaker greenback making dollar-priced crude cheaper for holders of other currencies.

Meanwhile reports that Monday's earthquake in China has disrupted natural gas output, increasing demand for diesel as an alternative source of fuel for power generation, is pushing distillate prices higher, "which is also pulling up crude oil", Societe Generale analyst Mike Wittner said.

At 10:33 a.m., New York-traded West Texas Intermediate crude for June delivery was up 60 cents at $124.82 a barrel.

[kennynah]

15 May 2008 10:55 GMT
OPEC cuts 2008 global oil demand forecast as OECD consumption seen lower
LONDON (Thomson Financial) - OPEC has cut its 2008 global oil demand forecast, amid expectations OECD consumption will tail off this year on weakening call for transport fuel, with even the U.S. summer driving season seen failing to spark a significant hike in demand.

Full-year global oil demand is now expected to total 86.95 million barrels per day, the 13-member cartel said in its monthly report, against previous expectations of 86.97 million barrels.

"Demand in North America is forecast to be flat (in 2008), while oil demand in other OECD regions is expected to decline due to weakening transport fuel demand in the second quarter," the report said.

"Oil demand is expected to experience the typical seasonal low consumption in the second quarter. Moreover, this year's summer driving season is not likely to show its normal annual growth due to the anticipated weaker gasoline demand in the U.S.," it added.

Non-OECD countries, chiefly China, the Middle East, India and Latin America, are expected to account for almost all of this year's growth in oil consumption.

Demand for OPEC crude is seen at 31.8 million barrels in 2008, it continued, down from 32.0 million barrels last year.

OPEC crude production for April dropped by 393,000 barrels month-on-month to 31.70 million barrels.

Meanwhile, the cartel also trimmed its outlook for non-OPEC supply this year. Output from non-OPEC producers such as Russia, Canada and Norway is seen at 50.18 million barrels per day, some 106,000 below previous forecasts.

[HengHeng]

Crude Oil Falls After U.S. Natural-Gas Stockpiles Increase

By Mark Shenk

May 15 (Bloomberg) -- Crude oil fell more than $1 a barrel in New York after an Energy Department report showed that U.S. supplies of natural gas, which competes with petroleum-based fuels, increased more than forecast last week.

Inventories rose 93 billion cubic feet, the Energy Department said in a report. Analysts forecast a gain of 88 billion cubic feet, according to the median of 23 responses in a Bloomberg News survey. Oil prices were up before the report's release on signs that European fuel demand will rise.

Crude oil for June delivery fell $1.14, or 0.9 percent, to $123.08 a barrel at 12:25 p.m. on the New York Mercantile Exchange. The contract surged to a record $126.98 on May 13.

Intercontinental Exchange Inc. said trading on its ICE Futures exchanges stopped today because of a power outage. Trading halted at approximately 10:21 a.m., New York time. A spokeswoman said the exchange hoped to resume trading within an hour.

Brent crude oil for June settlement rose 93 cents, or 0.8 percent, to $122.79 a barrel before trading halted on London's ICE Futures Europe exchange. The contract touched a record $125.90 on May 9.

[winston]

Ian Harnett (Absolute Strategy Research): Oil and gold

“Although high oil prices might no longer be deemed newsworthy, it is still a shock to see the ‘real’ oil price – deflated by the US consumer price index – at record levels, says Ian Harnett at Absolute Strategy Research.

“‘Whenever oil prices have accelerated rapidly during the last 40 years, global growth has slowed dramatically,’ says Mr Harnett. ‘The only hope is that the ‘slow-grind’ that has typified the current oil price rises has allowed more time to adjust, than did the ‘shocks’ that were seen in the 1970s.’

“The chief question for both the bond and equity markets is whether real oil prices normalise through the nominal oil price falling, or oil price pressures passing through into more generalised inflation. Typically, Mr Harnett says, the correction has come partly through a moderation in oil prices, but largely through headline and core consumer prices playing ‘catch-up’.

“‘Already, double-digit wage growth in many emerging markets suggests that inflation pressures are spreading.’ He says an intriguing feature of the oil price spike is that it is close to a 40-year high against another dollar denominated inflation-hedge – gold.

“‘Only briefly – back in the late summer of 2005 – has an ounce of gold purchased fewer barrels of oil. We expect such a situation is unlikely to last for long … so it may be time to be long gold and short ‘black gold’.’”

[winston]

Ha Ha k, another one for you..

Liz Ann Sonders, (Charles Schwab): Crude prices could soon retreat

“Oil prices could soon go into reverse following their steady advance over the past few months, believes Liz Ann Sonders, chief investment strategist at Charles Schwab.

“She says there has been neither a ‘supply shock’ nor ‘demand shock’ to drive prices higher.

“‘The pace of demand from dominant emerging regions has actually slowed, while demand from the US has declined sharply. Over the past 10 years, global oil reserves have increased by 140 billion barrels, to 1,200 billion barrels. If you add Canadian oil sands to the total, the increase was 300 billion barrels. Over that same span, the increase in world oil demand has been a benign 45 billion barrels.’

“Ms Sonders concludes that if supply and demand are not behind the recent price increases, speculation has played a key role. She points to research from ISI Group showing that over-the-counter commodity derivatives held globally grew sevenfold, to $7,000 billion, in the three years to June 2007.

“‘If we assume that only 50% of the open position is oil, the exposure as of the last data point equated to 48.5 billion barrels of oil – or about 20 times the size of the New York Mercantile Exchange market,’ she says.

“‘So with the supply and demand situation not looking as bleak as expected, coupled with our contention that this speculative phase should have a limit, oil prices should abate in the near to medium term.’”

[kennynah]

19 May 2008 11:00 GMT

OIL: OPEC President Khelil reported saying that he doesn't think OPEC
September meeting will result in a supply increase. (Rtrs)

[kennynah]

this comment was before the above...but traders apparent only took heed of above statement...

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19may08
world's leading oil producer promised an additional 300,000 barrels of crude a day as President Bush wrapped up a meeting Friday with Saudi Arabia's King Abdullah