Oil & Gas 01 (May 08 - Jul 08)

[LenaHuat]

Ah Ken, who drives a BMW, doesn't need the incentive

[blid2def]

GR - maybe akan datang. SP Services is going to cutover to a new billing system, SAP by Accenture.

Isn't it the case that when they first started to use SAP years ago, they screwed up the billing mightily? Maybe it'll happen again and we'll get free utilities for 2 months.

Well, seriously now, ultimately, it's not a technical thing. I think it's a mentality -> policy -> process -> technical issue, in that order. But I'm an otiose househusband (haha), so what do I know?

[LenaHuat]

GR
No, they used a NZ company called TUI Consulting (coincidentally TUI happens to be the name of the German co that NOL is attempting to takeover). Now SP is migrating to SAP.
http://www.todayonline.com/articles/266785.asp

Husbandry is pro-work. Huatopaedia is evidence that U can't possibly be work-shy.
Good Nite

[blid2def]

Ah thanks for the clarification. Going to SAP also isn't going to guarantee anything though. I'm hoping for deferred utilities bills for 6 months...

[winston]

The Arctic holds as many as 90bn barrels of undiscovered oil and has as much undiscovered gas as all the reserves known to exist in Russia, US government scientists have said in the first state assessment of the region.

The estimates could fuel the race among polar nations, such as Russia, the US, Denmark, Norway and Canada, vying for control of the region, though the study said Russia and the Alaska platform appeared to have the most undiscovered resources.

The 90bn barrels of undiscovered oil the US Geological Survey believes the Arctic holds is 13 per cent of the world's undiscovered oil – about the known reserves of the United Arab Emirates.

The 1,669,000bn cubic feet of natural gas are equivalent to 30 per cent of undiscovered gas reserves.

– Financial Times

[winston]

A GOVERNMENT-BACKED SHORT SALE IS HERE

Betting against oil is a moneymaking activity right now. After all, you've got the government on your side.

Here's the latest from the boobs in Washington DC: The market needs more government "help" to operate properly. So Congress is looking to cap how much money hedge funds can have in the oil markets.

How successful will the government be at driving hedge funds out of the futures markets? We don't know... but crude's $20 drop in the past few weeks tells us the meddling will send prices lower. Our guess is another $20 haircut is in the cards. The market loves to catch everyone off guard...

Just as investors were shocked when oil climbed from $70 to $140, most investors will be shocked if oil slides from $140 to $70. As you can see from today's chart, crude could do exactly that and still be within the confines of its long-term uptrend.

[winston]

David Fuller (Fullermoney): Oil prices by far the biggest global problem

“I have previously said that this year’s spike in crude oil prices had become by far the biggest global problem. Spikes in the price of oil have proved to be much more damaging economically than slow, steady rises. … spikes certainly contributed to recessions in 1990-1991 and 2001-2002. I also recall the oil shock recessions of 1973-1975 and 1980-1982, as will many veteran subscribers.

“Today, I feel increasingly confident that crude oil established an important medium-term peak last week. However it remains to be seen whether or not oil continues to fall back even more quickly than it rose, as it could, or ranges in a phase of top extension before declining to what I suspect will be at least $100. The difference in timing is important because it will be a crucial factor for central banks, which continue to express more concern over inflation than slowing economic growth. It will also influence the level of speculative activity in other commodities.

“Meanwhile, I think Mark Mobius is right to be interested in China and India at these levels, and given the size of the funds that Templeton manages, he cannot really afford to hold out for historically low valuations. Circumstances may not produce them and they probably would not stay there very long in any event.

“The main reservation most strategists have about China, India or any other promising market today, is inflation. That is why oil really is everything. At $100 a barrel, investors would obviously be a lot less concerned about inflation, and able to refocus on all the attractive aspects of emerging (progressing) markets. If we see $100 oil later this year, which I think is a real possibility, I suspect most stock market indices will be higher than they are today, led by those with the best combinations of sound governance and economic growth.

“To those who might ask: would we not then see oil move back up and renew its uptrend, my answer is not immediately. Lower demand for oil in the USA, due to more efficient usage, could easily offset rising demand in China for a while. Also, it is only a matter of time before Iraq’s oil production increases dramatically.”

Source: David Fuller, Fullermoney, July 22, 2008.

[kennynah]

we'll only know for sure where equities bottom is but in hindsight. Mar08 formed a low, recently another low was formed(when Dow briefly went to 10800 n vix climbed 32), these 2 could well be the double bottom technically.

the astute investor can choose to open bull bias positions n a stop out just below dow10800 or again simply wait for another 2 mths for clarity in direction.

so far, 2 banks have collapsed n she we wait for 5 before we r comfortable to tip toe into mkts? It all depends on appetite for risks.

one thing for sure, to me, money management is by far the most important aspect of trading at this time

[winston]

Oil hits seven-week low on faltering demand

NEW YORK - Oil dropped US$2 to a fresh seven-week low on Friday, extending a decline that has knocked more than US$24 off crude in two weeks as high fuel prices continue to batter demand.

US crude fell US$2.23 to settle at US$123.26 after falling to US$122.50 earlier, the lowest since June 5. Brent crude lost US$1.92 to settle at US$124.52 a barrel.

Fuel consumption in the United States and other industrialised nations has begun to slide, dragging oil down from record peaks over US$147 a barrel on July 11.

Additional pressure came as the US dollar extended gains against the yen and the euro, following reports showing an unexpected rise in US durable goods orders and stronger-than-expected US home sales in June and consumer sentiment for July.

Investors flocked into commodities earlier this year as a hedge against inflation and the weak dollar, but analysts say they have begun to unwind those positions over the past two weeks.

'The rise in US durable goods orders pushed the dollar up and the Petrologistics estimate of Opec output rising - both helped pull down crude futures,' said Phil Flynn, analyst for Alaron Trading in Chicago.

Industry consultant Petrologistics said estimated a 200,000 barrel per day rising in Opec production for July.

Rising demand in emerging economies like China launched oil on a six-year rally that sent prices up sevenfold at their peak. The sharp drop has some analysts forecasting oil prices may have peaked, with Lehman Brothers predicting US$90 a barrel by the end of the first quarter of 2009.

Russia, the top exporter outside Opec, is slashing its August oil export plan as oil firms rushed to reroute volumes to domestic refineries, lending some price support.

Support has also come from rebel threats against oil installations in Opec member Nigeria. -- REUTERS

[winston]

OPEC president sees oil at US$70
Monday, July 28, 2008

OPEC President Chakib Khelil said oil prices have dropped on speculation that the risk of a conflict between Iran and the United States has diminished and because the dollar has appreciated.

"The decrease in the price of oil is due the fact the market perceives there won't be an attack on Iran and also the dollar's strengthening," Khelil said on Saturday at a press conference in Algiers.

If not for the weakness of the dollar in recent months and concerns about the possibility of a conflict involving Iran, the price of oil probably would be US$70 (HK$546) to US$80 a barrel, Khelil said.

Crude oil for September delivery fell US$2.23, or 1.8 percent, to settle Friday at US$123.26 a barrel on the New York Mercantile Exchange, the lowest settlement price since June 4. The contract fell 4.8 percent last week. Oil has slipped more than US$24 a barrel from the US$147.27 record on July 11 as fuel use declined.

Algeria will host an extraordinary OPEC meeting on December 17, Khelil said. The gathering will take place in Oran, he said.

Last week the euro fell the most against the dollar since mid-June, as a drop in German business confidence and a decline in European manufacturing and services reduced expectations for European Central Bank interest-rate cuts.

BLOOMBERG