Total Earnings Fall on Weaker Production, Refining Margins

- Total Earnings Fall on Weaker Production, Refining Margins

Friday, July 29, 2011
Dow Jones Newswires
LONDON
by Alexis Flynn

French oil major Total Friday posted a 6% drop in second-quarter adjusted net profit as higher crude oil prices and the integration of Novatek's production failed to offset lower overall output and weaker refining margins.

The company reported EUR2.79 billion in the closely-watched adjusted net profit figure, somewhat short of the EUR2.84 billion projected by analysts. That was also lower than last year's result of EUR2.96 billion.

The French oil giant also became the latest European oil major to report weaker year-on-year oil and gas production, with seasonal maintenance and the loss of Libyan crude some of the common themes to affect the sector.

Total shares were off .47, or 1.23%, to EUR37.89 at 753GMT, slightly weaker than the French CAC 40 index.

Still, even as Total Chief Executive Christophe de Margerie acknowledged the impact of weak refining margins and Libyan oil outages, he expressed confidence in light of strong oil prices due to geopolitical tensions and strong energy demand. The company announced it will pay a second-quarter interim dividend for the first time of EUR0.57 a share.

"With a strong balance sheet and dynamic pace of execution in all of the group's segments, Total begins the second half of 2011 very confident in its outlook for profitable growth to benefit all of its stakeholders," de Margerie said.

Total said the European refinery margin indicator averaged $16.3 per metric ton in the second quarter, down 48% from $31.2/ton a year earlier, even though the group had said in the previous quarter that the margin should improve following the start-up of the new deep-conversion unit at its Port Arthur refinery in the U.S.

Unadjusted net profit came in 12% lower at EUR2.72 billion from EUR3.10 billion in the same quarter of 2010.

The group's hydrocarbon output over the period dropped 2% to 2.31 million barrels of oil equivalent per day from 2.36 million of boe/d a year earlier. Analysts expected production to drop 2.4% to 2.30 million barrels per day.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Commodity Corner: Oil Rises on Weaker Dollar

- Commodity Corner: Oil Rises on Weaker Dollar

Tuesday, July 12, 2011
Rigzone Staff
by Saaniya Bangee

Crude futures ended a two-day losing streak Tuesday on a weaker dollar.

The Federal Reserve released its June 21-22 meeting minutes Tuesday, in which policy makers discussed whether an additional round of monetary stimulus will be needed. Some officials claim another round of quantitative easing will be necessary if economic growth remains weak.

The greenback weakened Tuesday on the pending stimulus and as fears over the European debt crisis eased. The dollar index, which measures the greenback against a basket of major foreign currencies, fell 0.2 percent.

After trading between $93.55 and $97.50, crude for August delivery rose $2.28 to settle at $97.43 a barrel.

Meanwhile, Brent futures settled at $117.75 a barrel, up 51 cents. Brent's gains were curbed on reports that Shell lifted a force majeure on its Nigerian Bonny Light crude oil loadings. The intraday range for ICE Brent crude was $114.95 to $117.83 a barrel.

The front-month Brent crude contract expires on Thursday.

Prices for natural gas continued to increase Tuesday on hot temperatures. According to weather forecasts, the scorching weather is expected to continue until the end of July. Higher temperatures increase the demand for natural gas.

The Energy Information Administration (EIA) forecasted an above-average increase in this year's production in its Short Term Energy Outlook. Also, it reported gas consumption is expected to increase by 21 percent in 2011.

Front-month natural gas gained 3.5 cents Tuesday to end the trading session at $4.312 per thousand cubic feet.

RBOB gasoline also ended the day's trading session higher, settling at $3.098 a gallon. Prices peaked at $3.0998 and bottomed out at $3.025 a gallon.

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Commodity Corner: Crude Rises on Weaker Dollar

- Commodity Corner: Crude Rises on Weaker Dollar

Thursday, June 02, 2011
Rigzone Staff
by Saaniya Bangee

Crude futures inched higher Thursday as the dollar weakened after Moody's announced the U.S. credit rating may undergo scrutiny for a possible downgrade.

Light, sweet crude futures gained 11 cents settling at $100.40 a barrel. Prices fluctuated between $98.46 and $100.90 Thursday. The greenback fell after Moody's Investors Service said it may review lowering the U.S. government's credit rating if Congress does not produce a deal soon to increase the country's debt limit.

For the week ending May 27, U.S. oil inventories rose by 2.9 million barrels, according to the Department of Energy. At 373.8 million barrels, stockpiles reached their highest level since May 2009. The weekly report was published a day later than normal due to the Memorial Day holiday on Monday.

Natural gas for July delivery rose 16.5 cents Thursday, ending the trading session at $4.79 per thousand cubic feet. The Energy Department reported an increase of 83 billion cubic feet in U.S. gas stockpiles, below analyst expectations. The futures price peaked at $4.86, the highest since Jan. 24, and bottomed out at $4.625.

Meanwhile, gasoline futures lost nearly a penny Thursday to settle at $2.97 a gallon. The intraday range for gasoline was $2.925 to $3.00.

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Commodity Corner: Crude Climbs on Weaker Dollar

Commodity Corner: Crude Climbs on Weaker Dollar

Tuesday, April 19, 2011
Rigzone Staff
by Saaniya Bangee

Crude futures retreated Tuesday's earlier losses as the dollar weakened against foreign currencies.

Light, sweet crude gained $1.03 to settle at $108.15 a barrel. Tuesday marks the last trading session for the May contract.

Reaching as low as $105.50 a barrel, oil prices reversed course soaring in afternoon trading. As the dollar weakened, the euro gained strength on speculation that the European Central Bank will further increase interest rates. Additionally, strong economic data from France and Germany outweighed fears of Greece restructuring its debt. A weaker greenback increases crude's appeal amongst foreign buyers, making it cheaper.

Prices also bounced back from Monday's lows after Treasury Secretary Timothy Geithner assured there was "no risk" that the U.S. government debt would lose its top-tier rating.

Meanwhile in the Middle East, OPEC Secretary General Abdullah Al-Badri said there isn't a shortage of oil in the global market, even after the supply disruptions in Libya. OPEC believes an increase in crude production will not decrease oil prices worldwide.

Likewise, natural gas futures for May delivery rose to two-week highs settling at $4.26 per thousand cubic feet. The 12.4-cent increase came on a surprising surge in the Midwest's heating demand Tuesday. An unusual drop in weather across most of the Northwest and upper-Midwest and unexpected warmth in the south has increased demand for fuel. The intraday range for natural gas was $4.13 to $4.28 Tuesday.

As retail gasoline rose, May gasoline continued to decline, trading down 1.97 cents Tuesday. Futures settled at $3.23 a gallon increasing concerns that fuel costs will hinder economic recovery and decrease demand for motor fuel in the U.S. Gasoline prices peaked at $3.259 a gallon, before bottoming out at $3.198 Tuesday.

Commodity Corner: Crude Advances on A Weaker Dollar

Commodity Corner: Crude Advances on A Weaker Dollar

Thursday, April 14, 2011
Rigzone Staff
by Saaniya Bangee

Front-month crude futures gained a dollar Thursday after reversing earlier losses on a weaker greenback. Light sweet crude settled at $108.11 a barrel, up 0.9 percent.

Prior to the dollar's decline, the oil futures price fell to $105.77 during floor trading. The dollar fell against the euro on the U.S. Government's hovering budget battle and reports indicating an increase in jobless claims last week. According to the Department of Labor, applications for initial unemployment benefits soared to their highest level in two months. The Thursday report showed that 412,000 people had applied for claims, reflecting an increase of 27,000 from the previous week.

A weaker dollar increases the appeal of commodities, making it cheaper to purchase with other currencies. The dollar index, which compares the greenback to a basket of foreign currencies, also traded lower at 74.698 Thursday.

Meanwhile, political turmoil continues in the Middle East. Analysts believe Libya's structural problems will not be resolved in the near future but will continue to halt the country's previous exports of 1.5 million barrels a day.

Government reports of an increase in U.S. stockpiles pressured natural gas prices to rise by more than 2 percent Thursday. Prices settled at $4.212 per thousand cubic feet.

The Energy Information Administration (EIA) reported that U.S. gas inventories increased by 28 billion cubic feet last week. As of April 8, stockpiles were 0.6 percent above the five-year average at 1.607 trillion cubic feet.

The intraday range for natural gas was $4.06 to $4.26 per thousand cubic feet.

Gasoline prices lost 0.2 percent, settling at $3.23 a gallon. Thursday's gasoline futures peaked at $3.268, before bottoming out at $3.21.