Commodity Corner: Oil Edges Lower on Econ Woes

- Commodity Corner: Oil Edges Lower on Econ Woes

Tuesday, September 06, 2011
Rigzone Staff
by Saaniya Bangee

Light, sweet oil edged lower Tuesday on lingering concerns about the global economy.

Oil futures traded 43 cents lower at $86.02 a barrel on the New York Mercantile Exchange.

Concerns that the European debt crisis might worsen pushed prices and equities lower Tuesday. Traders worry that the economic plague could spread to neighboring countries.

Prices fell as low as $83.20 a barrel in intraday trading as U.S. stock indexes plummeted for a third consecutive session. They peaked at $86.50. Earlier today, the Dow Jones Industrial Average fell 308 points but rebounded after the Greek government indicated swifter economic reforms.

Traders are waiting to take cues from President Obama and the Federal Reserve's speech later this week.

Brent crude, which is used to price many international oil varieties, gained $2.81 Tuesday to settle at $112.89 a barrel. Brent took its cues from production problems in the North Sea and a continued absence of Libyan oil in the market.

Likewise, natural gas for October delivery added 6.6 cents to settle at $3.94 per thousand cubic feet. Prices fluctuated between $3.85 and $3.95 Tuesday.

The U.S. National Hurricane Center reported that a new weather system west-southwest of the Cape Verde Islands had a 90 percent chance of becoming a cyclone in the next 48 hours.

After trading between $2.77 and $2.84, front-month gasoline lost 1.7 cents to settle down at $2.82 a gallon.

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Commodity Corner: Oil Ends Week Lower

- Commodity Corner: Oil Ends Week Lower

Friday, August 19, 2011
Rigzone Staff
by Saaniya Bangee

Light, sweet crude posted a slight loss Friday, pressured by yesterday's bearish stock sell-off, as well as a series of negative economic data.

Oil futures ended the week 12 cents lower, settling at $82.26 a barrel Friday and down 3.7 percent for the week. Oil prices traded as low as $79.17 after an earlier intraday peak of $83.55, which was caused by an early rise in the stock market.

Crude gained some support Friday from a weaker dollar. The Dollar Index, which measures the dollar against a basket of major foreign currencies, traded at 74.002 from 74.216. The greenback reached a new post-World War II low against the Japanese yen.

Meanwhile, the September Brent contract price settled $1.63 higher at $108.62 a barrel. The intraday range for Brent was $106.43 to $109.30 a barrel.

Natural gas for September delivery gained nearly 5 cents, or 1.2 percent, to settle at $3.94 per thousand cubic feet. Natural gas fluctuated between $3.90 and $3.97 for the last trading session of the week.

Front-month gasoline advanced 5.80 cents to finish at $2.84 a gallon Friday. RBOB rose for a second straight week.

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Aker Solutions 2Q Earnings Lower Than Expected

- Aker Solutions 2Q Earnings Lower Than Expected

Friday, August 12, 2011
Aker Solutions

Aker Solutions' operating revenues in the second quarter of 2011 were NOK 7.8 billion. Earnings before interest, tax, depreciation and amortization amounted to NOK 636 million. Order intake in the quarter was NOK 14.3 billion.

"We have a strong order intake which reflects high tendering and activity levels across all business segments. In fact, our order backlog has increased 19 percent since the beginning of the year. This is in line with our long term growth plan. However, this quarter has also provided us with some reminders about the importance of further improving our operational performance," said Øyvind Eriksen, executive chairman of Aker Solutions.

Second quarter consolidated revenues was NOK 7 809 million, compared with NOK 8 096 million in the same period in 2010. EBITDA for the second quarter of 2011 was NOK 636 million (8.1 percent EBITDA margin), compared to NOK 853 million one year ago. Profits in the quarter were negatively affected by execution challenges and the final arbitration ruling on Blind Faith.

"In the second quarter quality costs related to execution issues in Brazil alone amounted to NOK 130 million in our Subsea and Process Systems businesses. With quality and customer satisfaction as two of our top priorities, this is obviously disappointing," Eriksen said.

Order intake in the second quarter was NOK 14.3 billion. At the end of the second quarter Aker Solutions' order backlog was NOK 46 billion - an increase of NOK 5.5 billion from the previous quarter.

During the second quarter Aker Solutions concluded the structural changes outlined at the company's capital markets day in December 2010. The final step was the demerger and separation from specialized EPC contractor Kværner ASA.

"Today Aker Solutions is a pure oil service player focusing on engineering, technology, products and field-life solutions. We have a strong cash position fueled by solid earnings and gains from strategic divestments. We will convert our financial strength to capacity with the aim of facilitating further growth. However, we will also ramp up our efforts of building a stronger quality culture to further improve our day-to-day operations," said Øyvind Eriksen.

"Our growth plans are ambitious and we need qualified people to meet these objectives. In the first half of 2011 we have hired almost 1 200 new colleagues worldwide. I am pleased to see that so many new colleagues share our technology vision and company values," adds Eriksen.

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Commodity Corner: Default Fears Push Oil Lower

- Commodity Corner: Default Fears Push Oil Lower

Monday, July 25, 2011
Rigzone Staff
by Matthew V. Veazey

With investors nervous about whether Congress and the White House can agree on a plan by August 2 to raise the U.S. debt ceiling and possibly avert default, crude oil settled lower Monday.

Light sweet crude oil for September delivery lost 67 cents to end the day at $99.20 a barrel. The September Brent contract price fell 73 cents to settle at $117.94 a barrel. Recent debt ceiling negotiations between congressional leaders and the Obama Administration have proven both fruitless and contentious. Key areas of disagreement have been how high to raise the federal government's current $14.3 trillion borrowing limit and how deeply to cut spending to offset the increase. Subsequent negotiations between Democrat and GOP congressional leaders did yield a bipartisan framework proposal, but the White House has increased the specter of default by opposing this potential deal.

The WTI peaked at $99.87 and bottomed out at $98.52 and the Brent fluctuated from $117.00 to $118.31.

The August natural gas contract price ended the day at $4.39 per thousand cubic feet, a penny lower than Friday's settlement price. Natural gas traded within a range from $4.34 to $4.46 Monday.

Front-month gasoline remained flat Monday, again settling at $3.13 a gallon. The August contract price fluctuated from $3.09 to $3.13 during the first session of the week.

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Commodity Corner: WTI, Brent Settle Lower

- Commodity Corner: WTI, Brent Settle Lower

Monday, July 11, 2011
Rigzone Staff
by Matthew V. Veazey

Oil futures ended the first day of the week lower as the U.S. Dollar gained strength against other major currencies. A stronger greenback makes oil a less attractive buy for investors holding other currencies.

The price of light sweet crude oil on the New York Mercantile Exchange settled at $95.15 a barrel, marking a $1.15 slide from the previous trading day. The Brent futures price lost $1.09 to end the day at $117.24 a barrel. The Dollar Index, which gauges the price of the greenback against other major currencies, increased 1.1 percent Monday.

Speculation that debt woes in Europe will escalate provided support for the dollar Monday as the focus shifts to Italy, where some believe that a crisis akin to what Greece recently experienced could erupt. Italian government bond yields rose late last week, signaling reduced confidence in Italy's ability to avert default. The WTI futures price peaked at $96.75 and bottomed out at $94.14 Monday while the intraday range for Brent fluctuated from $115.27 to $118.29.

Buoyed by predictions of warmer-than-normal temperatures throughout the Midwest and East Coast during the next two weeks, natural gas futures gained 8.5 cents Monday. The August contract price settled at $4.29 per thousand cubic feet after trading within a range from $4.18 to $4.34.

Gasoline for August delivery lost two cents to end the day at $3.07 per gallon. It fluctuated from $3.03 to $3.10.

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Commodity Corner: Oil Ends Lower on Greece Debt

- Commodity Corner: Oil Ends Lower on Greece Debt

Monday, June 27, 2011
Rigzone Staff
by Saaniya Bangee

Crude prices slipped lower Monday on an upcoming vote debating Greece's debt crisis.

This week the Greek parliament will vote on a $40 billion austerity package in order to receive another bailout from the European Union and the International Monetary Fund. The budget-cuts could affect other European countries.

Crude for August delivery lost 55 cents Monday settling at $90.61 on the New York Mercantile Exchange. Crude retrieved earlier losses on reports that French banks had agreed to accept slower repayment of Greece's debt. The intraday range for oil was $89.61 to $91.30 Monday.

Oil prices were also pressured by the Commerce Department's reports indicating flat U.S. consumer spending for May.

For the first time in three sessions, Brent crude gained ground. The European benchmark gained 0.8 percent Monday ending the session at $105.99 a barrel. Prices swung between $102.28 and $106.40, responding to each update on the Greek vote.

Front-month natural gas rose 2.7 cents Monday settling at $4.26 per thousand cubic feet. Futures for natural gas increased on weather forecasts predicting above-average temperatures for this week. Prices peaked at $4.28 Monday.

After trading between $2.74 and $2.82, gasoline futures settled at $2.81 a gallon.

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Honda Motor Projects 65% Drop in Profit For the Year

- Honda Motor Projects 65% Drop in Profit For the Year



Jun 14, 2011

Honda Motor Co. (NYSE:HMC) forecast a 65% drop in annual profit for its year ended March 2012 this morning, as vehicle production continues to be hampered due to the March 11th earthquake.

The company said it expects total production for the year to drop 6% to 3.3 million total vehicles for the year, down from 3.51 million in its year ended in March 2011.

Honda is projecting a profit of $2.4 billion, down sharply from the $6.6 billion recorded last year, and far lower than the post-quake consensus estimate for $5.0 billion. Revenues are projected to fall 7.1% to $104 billion.

The estimates are based on an average exchange rate of 80 yen to the dollar and 110 yen to the euro.

The company said it expects Japanese production to nearly normalize by later this month, while overseas production could take until August or September. That isn't very encouraging, considering the company manufactures over 70% of its cars outside of Japan.

Honda Motor has a potential upside of 27.9% based on a current price of $36.13 and an average consensus analyst price target of $46.2.

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Commodity Corner: Oil, Natural Gas Settle Lower

- Commodity Corner: Oil, Natural Gas Settle Lower

Monday, June 13, 2011
Rigzone Staff
by Matthew V. Veazey

Crude oil for July delivery settled at $97.30 a barrel Monday.

The $1.99 day-on-day decline reflected investors' pessimism about the outlook for U.S. oil demand and the direction of the national economy. Oil traded within a range from $96.13 to $99.32.

Also falling Monday was the natural gas futures price, which lost 11 cents to settle at $4.65 per thousand cubic feet. The July contract price has enjoyed an uptick lately as temperatures in key U.S. cooling markets have exceeded normal ranges. As conditions in the Northeast and other areas moderate, however, the demand for cooling should fall. Moreover, nuclear power plants are concluding maintenance-related downtime and returning to normal operating levels. Consequently, demand for natural gas to generate electricity should decrease.

July natural gas peaked at $4.81 and bottomed out at $4.61 Monday.

Front-month gasoline lost two cents to end the day just under $3.00 a gallon. The July contract price fluctuated from $2.955 to $3.05.

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Commodity Corner: Oil Settles Lower on Demand Concerns

- Commodity Corner: Oil Settles Lower on Demand Concerns

Monday, June 06, 2011
Rigzone Staff
by Matthew V. Veazey

Crude oil for July delivery ended the day at $99.01 a barrel Monday.

Monday's $1.21 day-on-day decline stems from pessimism about the prospects for crude oil demand, thanks in part to recent unimpressive economic data showing higher unemployment in the U.S. In addition, some analysts expect OPEC to raise its production ceiling when the cartel meets later this week.

Oil peaked at $100.68 and bottomed out at $98.64 Monday.

The futures price for natural gas moved in the opposite direction Monday, gaining 12 cents to settle at $4.83 per thousand cubic feet. Providing some of the momentum for gas was an International Energy Agency (IEA) report that projects a "golden age" for the fossil fuel. According to the IEA, natural gas use worldwide could exceed 2010 levels by more than 50 percent by the year 2035.

In the nearer term, more summerlike temperatures are expected to prevail in the Northeast and Midwest through this week. As a result, demand for cooling—and natural gas—is expected to increase in these key electricity markets.

July natural gas traded within a range from $4.74 to $4.855 Monday.

July gasoline slipped four cents to end the day at $2.95 a gallon. It fluctuated from $2.94 to $3.02.

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Energy Sector Update: June 1, 2011

- Energy Sector Update: June 1, 2011



Jun 1, 2011

Energy shares are down in mid-day trading as crude oil futures fall below $101 a barrel at the New York Mercantile Exchange. Light, sweet crude for July delivery is trading down 1.8% to $100.85 a barrel.

In mid-day news, shareholders for both Alpha Natural Resources (ANR) and Massey Energy Co. (MEE) today at their respective special stockholders' meetings said that they have approved various proposals related to Alpha's acquisition of all outstanding shares of Massey's common stock. The acquisition is anticipated to conclude later today.

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ConocoPhillips to Drill Off Australia to Evaluate Natural Gas Discovery

- ConocoPhillips to Drill Off Australia to Evaluate Natural Gas Discovery



May 17, 2011

Shares of ConocoPhillips (COP) are down on a Bloomberg report that the oil giant plans to begin drilling in the Browse Basin off Australia's northwest coast.

The move will come in the second or third quarter in an effort to judge the potential of discovering natural gas in the area.

ConocoPhillips shares are down 0.76%, or $0.54, to $70.89.

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Commodity Corner: Oil Falls on Lower GDP Forecasts

Commodity Corner: Oil Falls on Lower GDP Forecasts

Monday, April 11, 2011
Rigzone Staff
by Matthew V. Veazey

Crude oil for May delivery fell 2.5 percent Monday to $109.92 a barrel after the International Monetary Fund (IMF) lowered its projections for real gross domestic product growth this year.


The IMF anticipates world GDP to increase by 4.4 percent this year, compared to 5.0 percent for 2010. In addition, the organization expressed concerns about high unemployment and commodity prices, along with the need to advance fiscal and financial repair and reform measures—particularly in the U.S. "To make a sizable dent in the projected medium-term deficits, broader measures such as Social Security and tax reforms will be essential," the IMF stated in regard to fiscal consolidation and entitlement reforms in the U.S.

Also in the case of the U.S. economy, the IMF lowered its GDP growth rate projection for 2011 to 2.8 percent. Earlier this year, the projection was 0.2 percentage points higher.

The IMF also noted that global demand needs to be "rebalanced." To illustrate this imbalance, it pointed out that global GDP is on course to grow by 2.4 percent this year in advanced economies and a whopping 6.5 percent in emerging and developing economies. In the case of the latter group, the organization cautioned that effects of the boom—growing production approaching capacity constraints as well as large food and energy price increases pressuring wages upward—could cause these economies to overheat.

Front-month crude traded within a range from $110.05 to $113.46 Monday. The IMF report is available here

May natural gas briefly traded below the $4.00 per thousand cubic feet mark Monday—and investors treated the dip to $3.99 as a buying opportunity. By the end of the day, natural gas had surged to $4.16 before settling at $4.11. In comparison, gas settled at $4.04 on Friday.

May gasoline slipped by six cents Monday to settle at $3.20 a gallon. It peaked at $3.27 and bottomed out $3.19.