Oil & Gas 01 (May 08 - Jul 08)

[kennynah]

15 Jun 2008 19:23 GMT

Report: UN chief says Saudis to reduce oil prices
RIYADH, Saudi Arabia (AP) - Saudi Arabia's king is ready to help restore soaring oil prices to more "appropriate" levels, U.N. chief Ban Ki-moon said Sunday, according to an official news agency.

The U.N. secretary-general spoke with reporters after meeting Saudi King Abdullah in the port city of Jiddah during a one-day trip to the world's largest oil producer.

"The king believes that the current oil prices are abnormally high, and he is ready to restore prices to their appropriate levels," the official Saudi News Agency quoted Ban as telling reporters in Jiddah. The report carried by SPA was in Arabic, and it did not say what language Ban spoke in.

Saudi Arabia has called for a meeting of oil producing and consuming countries on June 22 in Jiddah to discuss ways of dealing with soaring energy prices.

The New York Times reported Saturday, citing unnamed analysts and oil traders briefed by Saudi officials, that a production increase of about 500,000 barrels per day was to be announced following the meeting.

On Saturday, the Saudi oil minister's adviser told The Associated Press that the minister would address the production increase reports the next day. But on Sunday, the adviser, Ibrahim al-Muhanna, said there was no meeting scheduled.

Saudi Arabia, the world's largest oil producer, is concerned that sustained high oil prices will eventually slacken the world's appetite for oil, affecting the kingdom in the long run.

Crude prices have reached record highs, surpassing $139 per barrel on June 6 after surging nearly $11 in the biggest single-day price leap ever.

The prices had receded by Friday, with the benchmark light, sweet crude for July delivery falling $1.88 to settle at $134.86 on the New York Mercantile Exchange. In London, July Brent crude lost $1.84 to settle at $134.25 on the ICE Futures exchange.

The current president of the Organization of Petroleum Exporting Countries, Chakib Khelil, has said that the cartel will make no new decision on production levels until its Sept. 9 meeting in Vienna. OPEC ministers often follow the lead of the Saudis when discussing whether to increase production to take the pressure off rising prices.

[winston]

From CIMB:-

How high can crude oil go? Globally, the hottest topic right now is crude oil. The question is how high can it go? According to the Elliott Wave Principle, for commodities, the final wave is usually the longest wave. In contrast to the stock market, the final fifth waves in commodities commonly are extended in bull markets.

Are we going to see a very sharp spike up soon? Crude oil to peak soon. We think that crude oil will be reaching its peak soon. Going by its recent volatility, we expect a very choppy finale, with a very sharp spike followed by a pullback that is just as sharp. Although we think that crude oil has a high chance of hitting US$160.00 or even US$200, it is never a certainty.

[millionairemind]

S'pore oil trade shrinks on wild price swings
Credit crunch makes matters worse; some houses even halt operations


By RONNIE LIM

(SINGAPORE) Oil traders in Singapore are hurting, with some houses even being forced to cease operations.

Sharp drop: Industry players estimate that oil trading volumes in Singapore plunged an unprecedented 25-35 per cent in January-June
On the one hand, they are being hit by the huge swings in oil prices - like the latest US$17 two-day surge on June 5-6 - which involve large margin calls. On the other, the global crunch is biting into their credit lines.

The result has been a bleak first half of the year for the industry. Players estimate that oil trading volumes in Singapore plunged an unprecedented 25-35 per cent in January-June.

While official figures are not yet available, oil trading in Singapore - the third largest oil-trading hub worldwide - was estimated to have touched US$300 billion in 2006. Since then, the galloping oil prices have driven up the dollar value of the trades but the volumes have shrunk.

'It's quite visible,' said a trader with a local house about the slowdown. 'It's the first time volume has fallen here.

'It is aggravated by the fact that some countries, including China, India and Indonesia, are still subsidising their fuel prices - it's hard to sell to them when international prices are higher than their domestic fuel prices.'

A broker with a US house added: 'Overall, the volatile oil prices haven't benefited traders. We are going into uncharted territory. The whole market doesn't look good for the rest of this year.'

Some trading houses have even ceased operating in Singapore, he said.

'Trading conditions are getting more severe,' said an industry official. 'There is also talk of US regulators wanting to increase the margins to trade, which means traders have to put up more capital to do so, which will further affect global trading volume.'

After hitting a record US$139.12 a barrel earlier this month, oil futures pulled back before reversing course again and now appear poised to smash through US$140 a barrel.

'Generally, oil traders here can't afford to trade as much (as before) given the spikes in oil prices and higher bank interest rates,' said the broker with the US house. 'Any big swings in oil prices, like last Thursday's and Friday's US$17 jump, involve huge margin calls.'

This has resulted in an outfit like Projector Asia suspending its operation here at Battery Road, industry sources say. As many as 20 to 30 of Projector's traders, including in other commodities, are said to be moving to a rival trading unit, Arcadia Petroleum, according to the sources.

The talk is that Projector's Singapore operations were hit as banks pulled credit lines over reported problems concerning delivery of large volumes of naphtha to South Korean petrochemical companies.

Another oil-trading house that is believed to have stopped operations here is Russian-based Highlander, according to sources.

Trading by the so-called Wall Street refiners - investment banks such as Morgan Stanley and J Aron - have also fallen substantially.

Despite the gloomy industry outlook, at least one trading house plans to rejoin the Singapore market.

China Aviation Oil (Singapore) - after a forced hiatus following speculative derivatives trading losses of US$550 million in 2004 - is now preparing to resume oil trading proper here.

While it has already been buying and hedging jet fuel for China's airports which is its core business, CAO's head of trading Jean Teo said that it expects to start trading other oil products in the second half.

She declined to say which products, but market players say that prior to its shock losses, CAO had been trading across the barrel, including in gasoline and diesel.

These are also the products that Ms Teo - who was seconded to CAO in January from shareholder BP Singapore (BPS) - is familiar with, as she was BPS's lead trader of light distillates, which include liquefied petroleum gas, gasoline, diesel and jet fuel.

The CAO trading team comprises three Chinese traders led by Ms Teo. Asked if she intends to grow the team, she said: 'We are comfortable with the number at the moment but we are always on the lookout for people.'

[LenaHuat]

Extract from a German course :

Daniel Jaeggi is sitting at a conference table in an office building on Place du Molard in Geneva, only a few steps away from the lake. It is 1:45 p.m. on Friday of last week, and the price of a barrel of the benchmark Brent Crude oil is at $129.50 (€82).

Jaeggi, a 47-year-old Swiss citizen, is a petroleum trader. He and his partner, Marco Dunand, own a company called Mercuria. It is one of the world's 10 largest trading companies. At its offices in Geneva, approximately 110 employees analyze markets, handle contracts and track tanker routes. Last year Mercuria traded in petroleum products worth a total of almost $30 billion (€19 billion). That included millions of barrels of oil destined for China.

At 3:15 p.m., the price of a barrel of Brent Crude is at $131 (€83). During the course of the day, traders at Mercuria in Geneva trade up to 4 million barrels of "real" oil and about 10 times as much in so-called swaps -- in other words, oil which only exists on paper -- to hedge against risk.

"The oil price has gone up by about $10 in the last two days," says Jaeggi, adding that in the past it would have taken the market years to achieve the same price increase. Later on Friday, US crude would hit a record price of over $139, up $11 in the largest-ever single day increase.

Last August, the price of oil was $70 (€45) a barrel, in early March it surpassed the $100 (€64) mark, and then the new record high on June 6. What's next?

Speculation is as old as the Ancient of Times, as old as the hills
If it's a bubble will it end like the Dutch tulipmania sage :

Speculation is mentioned for the first time in the Old Testament. The ruler of Egypt, who had dreamed that seven abundant harvests would be followed by seven poor harvests, encouraged the practice. To avert this disaster, he created what might be seen as the first government fund in world history, with which he stockpiled grain on a large scale, thereby driving up prices.

A classic archetype for all future panics is the Dutch tulip mania of the 17th century. In 1636, at the height of the bubble, the most highly coveted bulbs, such as the Viceroy and Admiral van der Eyck species, commanded prices on par with the cost of an entire house. All social classes succumbed to the hysteria. Contemporary paintings depict butchers, guards, shipping agents, students and chimney sweeps trading the bulbs in taverns.

But then the Dutch public's faith in a permanently golden future for the tulip collapsed. At a tulip auction in the city of Haarlem on Feb. 4, 1637, not a single finger was raised when the first bulb went under the hammer. The auctioneer dropped the price, but still no one moved. This led to a widespread selloff of bulbs, causing prices to plummet.

But is oil different from tulips, techno stocks?
Is oil a bubble when it seems to have become a reserve currency?

Grrrrrrrrrrr.............still working these thoughts through my braincells.

[iam802]

[

(SINGAPORE) Oil traders in Singapore are hurting, with some houses even being forced to cease operations.

Yes, this is true. I heard quite a number of oil traders are on 'garden leave' now.

[blid2def]

Best speculation of all time is probably by 吕不韦 yah? Speculate until his son become emperor...

Full story: http://baike.baidu.com/view/31791.htm

Okay, sorry for going OT. Haha...

[kennynah]

16 Jun 2008 10:16 GMT
Marseille Port: Strike Blockade On Total Refinery Lifted

PARIS -(Dow Jones)- France's state-administered Autonomous Port of Marseille, which includes the terminals of Fos-Lavera - the country's biggest oil port - said striking workers there blocked road access to Total SA's (TOT) refinery there for two hours Monday before lifting the blockade.

A spokeswoman for the port told Dow Jones Newswires that the blockade was lifted at 0900 GMT, but wasn't able to elaborate on what happened.

A spokesman for Total confirmed the blockade had ended at 0900 GMT.

Four refineries are located in the Fos-Lavera hub, and pipelines running from Fos serve a number of other French and European refineries with crude oil, including the Miro refinery in Karlsruhe, Germany, which can process up to 300,000 barrels of crude a day.

Workers at the Marseille port have been striking in recent weeks over a government plan to privatize some activities at France's autonomous ports.

[LenaHuat]

These 'rats' are in no hurry to abandon ship :

June 16 (Bloomberg) -- On Wall Street, where just about everyone has lost confidence in financial assets, Goldman Sachs Group Inc. and Morgan Stanley are making money the old-fashioned way: Buying and selling commodities.

Goldman and Morgan Stanley are expected by analysts to report the best second-quarter earnings of the world's biggest securities firms this week, having limited their losses from the collapsing credit market. They also lead Wall Street in commodities trading, where crude oil futures doubled in the past year and the price of products from gold to corn soared to record highs.

Surging prices are attracting investors, as well as companies hedging their positions by buying derivatives. That's played to the strength of Goldman and Morgan Stanley, which dominate the market for commodity derivatives. The two New York-based companies accounted for about half of the $15 billion of revenue that the world's 10 largest investment banks generated from commodities last year, said Ethan Ravage, a financial-services industry consultant in San Francisco.

GS's prediction : US$200/barrel come 2009
MS : US$150 by July 4, 2008
MacQuarie : US$110 - US$110, anticipating a correction soon.

[kennynah]

hi L : rats indeed.... the more i hear these squeeks...the more i am acutely aware of their counter traps possibly in the making.

[millionairemind]

So I see... so self-serving???

I have also seen at times those foreign investment houses downgrading certain stocks in Singapore... kind of fishy at times.. I am thinking that they might have a large short position before they released the "downgrade" report..