Commodity Corner: Crude Climbs on Equities, Mideast
Tuesday, March 29, 2011
Rigzone Staff
by Saaniya Bangee
Crude futures advanced 0.8 percent Tuesday on stronger equities and doubts on whether Libyan rebels can resume crude exports within a week.
Tuesday's stock market rally helped oil prices snap out of a 3-day slump, settling at $104.79 a barrel. The 81-cent gain came in anticipation of increased oil demand in the U.S. As the first quarter for 2011 nears close, the Dow Jones Industrial Average and the Standard & Poor's 500 Index both gained 0.7 percent in afternoon trading.
Earlier Tuesday, prices fell to $102.70 a barrel on Libyan rebels' promise to swiftly return crude exports to markets. Traders remain weary as to how quickly and capable Libya will be in resuming exports, along with the remaining uncertainty in the Middle East.
Meanwhile, natural gas futures for April delivery fell by 3.1 percent to settle at $4.24 per thousand cubic feet. The April contract expired at Tuesday's settlement, which traders seized as an opportunity to cash out previous profits.
The Energy Information Administration reported 66.67 billion cubic feet a day, 0.5 percent lower, for U.S. natural gas production in the lower 48 states. The drop was still 6.8 percent higher from year-earlier levels.
Natural gas prices fluctuated between $4.195 and $4.37 Tuesday.
Front-month gasoline ended up Tuesday, settling at a session high of $3.05 a gallon. The session bottomed out at $3.01 a gallon.
Showing posts with label oil prices. Show all posts
Showing posts with label oil prices. Show all posts
Tuesday, March 29, 2011
Friday, March 25, 2011
Barclays Anticipates $185 Oil in 2020
Barclays Anticipates $185 Oil in 2020
Friday, March 25, 2011
If you believe oil prices are going to soar in coming years, you're very much in sync with the thinking of the brain trust at Barclays Capital, a prominent international investment banking firm based in London.
Barclays, in its Oil Market Update released Thursday, forecasts that a barrel of West Texas Intermediate (WTI) crude oil, the benchmark U.S. grade, will sell for an average price of $185 in 2020. That's $38 higher than the current all-time record high reached in the summer of 2008, when oil topped $147 a barrel.
Meanwhile, Barclays is dramatically revising its 2011 oil price forecast upward in light of tensions in the Middle East, curtailed production in Libya, rising global oil demand and a shrinkage in spare production capacity.
Barclays is now forecasting an average price of $106 a barrel for WTI this year, a $15 jump from its prior estimate of $91. And it is predicting that even pricier North Sea Brent crude will average $112 rather than the $91 it previously forecast for that grade also.
WTI crude for May delivery settled at $105.60 Thursday, down 15 cents, in futures contracts for May delivery on the New York Mercantile Exchange. But the price went as high as $106.69 in intraday trading.
Brent crude gained 17 cents to settle at $115.72 a barrel on the London-based ICE Futures Europe exchange.
Friday, March 25, 2011
Fort Worth Star-Telegram, Texas
by Jack Z. SmithIf you believe oil prices are going to soar in coming years, you're very much in sync with the thinking of the brain trust at Barclays Capital, a prominent international investment banking firm based in London.
Barclays, in its Oil Market Update released Thursday, forecasts that a barrel of West Texas Intermediate (WTI) crude oil, the benchmark U.S. grade, will sell for an average price of $185 in 2020. That's $38 higher than the current all-time record high reached in the summer of 2008, when oil topped $147 a barrel.
Meanwhile, Barclays is dramatically revising its 2011 oil price forecast upward in light of tensions in the Middle East, curtailed production in Libya, rising global oil demand and a shrinkage in spare production capacity.
Barclays is now forecasting an average price of $106 a barrel for WTI this year, a $15 jump from its prior estimate of $91. And it is predicting that even pricier North Sea Brent crude will average $112 rather than the $91 it previously forecast for that grade also.
WTI crude for May delivery settled at $105.60 Thursday, down 15 cents, in futures contracts for May delivery on the New York Mercantile Exchange. But the price went as high as $106.69 in intraday trading.
Brent crude gained 17 cents to settle at $115.72 a barrel on the London-based ICE Futures Europe exchange.
Wednesday, March 23, 2011
ConocoPhillips Plans to Sell Additional $5-$10B of Assets
ConocoPhillips Plans to Sell Additional $5-$10B of Assets
March 23, 2011
March 23, 2011
by Isabel Ordonez
ConocoPhillips unveiled plans to sell an additional $5 billion to $10 billion in non-core assets over the next two years and said it will use the proceeds to fund its share buyback and capital expenditure programs.
The move, announced at the company's analyst meeting in New York, had been expected by some analysts. Chief Executive Jim Mulva told analysts the company plans to sell a total of $12 billion to $17 billion in assets in a three-year period, including at least $1 billion in refining and marketing properties this year. Mulva, who announced he will retire from his post some time next year, said potential new dispositions include non-strategic assets in the North Sea and additional mature assets in the U.S. and Canada. The plan also includes a 15% stake in the Australia-Pacific liquefied natural gas project it agreed to sell last month to Sinopec.
"We are executing the plan set out last year to improve returns and create value through disciplined capital spending, non-core asset sales and growing production per share," Mulva said.
Mulva told analysts that the additional asset sale target is expected to come on top of the $7 billion the company already sold in assets last year and excludes the $8.3 billion from the sale of its 20% stake in Russian oil giant Lukoil.
Conoco is in the midst of a restructuring plan started in 2010 to shore up its finances by selling assets. It initially said it didn't plan to sell refining properties until next year, aiming to avoid selling assets at deep discounts, but in October it said it would ramp up its sale of assets in 2011 amid a rebound in the industry.
The asset sales mark a shift from Conoco's debt-fueled acquisition spree when commodity prices were soaring. It also underscores the company's confidence that its "shrink-to-grow" strategy is yielding positive results among investors. Oil and gas producers have traditionally been judged primarily on how quickly they can grow reserves and production. But adding enough oil reserves to please investors is becoming tougher each year as state-controlled oil companies restrict access to the most promising new resources. For investor-owned oil companies, improving the profitability of what they do own has become the next best option.
ConocoPhillips, the third-largest U.S. oil company by market value after ExxonMobil and Chevron, said it expects its oil-and-gas production to be between 1.6 million and 1.7 million barrels of oil equivalent per day in 2013, down from 1.75 million barrels of oil equivalent per day it produced last year due to the impact of the asset sale program. The oil giant, however, said it expects output to grow 2% to 3% per year in the long term, driven mainly by the startup of projects in Asia, the North Sea and the U.S.
The company expects to use proceeds from the asset sales announced Wednesday to fund a $10 billion share repurchase program it had previously unveiled, and for capital investment. In a slide presentation, the company said it expects share buybacks to total $11 billion through 2012.
Conoco plans $13.5 billion of capital spending this year, with the vast majority targeted for exploration and development. It said it plans to invest $14 billion to $15 billion per year from 2012 to 2015.
Mulva, who has run the company since 1999, said Conoco's spending plans are unlikely to change with his expected retirement next year.
"The company is in great shape. It makes a lot of sense to do it at that point in time," Mulva said.
Conoco said it plans to invest 50% more this year in projects in North America mainly aimed at increasing drilling activity in oil-rich shale areas such as the Eagle Ford in Texas and the Bakken Shale in North Dakota.
Mulva said it is unlikely Conoco will make any large-scale acquisitions but he added it could expand its presence in some areas such as the deepwater of the Gulf of Mexico through small scale deals.
ConocoPhillips said it sees oil prices remaining strong in the long term, driven by increased global demand, but added that natural gas prices in the U.S. are likely to remain depressed due the shale gas production boom.
The company said it plans to invest $1.4 billion in the APLNG project, which will be sanctioned by mid-year and have its first liquid natural gas delivery in 2015. Conoco is also planning to ramp up exploratory drilling in the Caspian Sea, with a new well planned for its Kazakhstan N Block offshore for late this year or early 2012. The company is also negotiating a production sharing agreement for Block 19 in Turkmenistan.
Link
The move, announced at the company's analyst meeting in New York, had been expected by some analysts. Chief Executive Jim Mulva told analysts the company plans to sell a total of $12 billion to $17 billion in assets in a three-year period, including at least $1 billion in refining and marketing properties this year. Mulva, who announced he will retire from his post some time next year, said potential new dispositions include non-strategic assets in the North Sea and additional mature assets in the U.S. and Canada. The plan also includes a 15% stake in the Australia-Pacific liquefied natural gas project it agreed to sell last month to Sinopec.
"We are executing the plan set out last year to improve returns and create value through disciplined capital spending, non-core asset sales and growing production per share," Mulva said.
Mulva told analysts that the additional asset sale target is expected to come on top of the $7 billion the company already sold in assets last year and excludes the $8.3 billion from the sale of its 20% stake in Russian oil giant Lukoil.
Conoco is in the midst of a restructuring plan started in 2010 to shore up its finances by selling assets. It initially said it didn't plan to sell refining properties until next year, aiming to avoid selling assets at deep discounts, but in October it said it would ramp up its sale of assets in 2011 amid a rebound in the industry.
The asset sales mark a shift from Conoco's debt-fueled acquisition spree when commodity prices were soaring. It also underscores the company's confidence that its "shrink-to-grow" strategy is yielding positive results among investors. Oil and gas producers have traditionally been judged primarily on how quickly they can grow reserves and production. But adding enough oil reserves to please investors is becoming tougher each year as state-controlled oil companies restrict access to the most promising new resources. For investor-owned oil companies, improving the profitability of what they do own has become the next best option.
ConocoPhillips, the third-largest U.S. oil company by market value after ExxonMobil and Chevron, said it expects its oil-and-gas production to be between 1.6 million and 1.7 million barrels of oil equivalent per day in 2013, down from 1.75 million barrels of oil equivalent per day it produced last year due to the impact of the asset sale program. The oil giant, however, said it expects output to grow 2% to 3% per year in the long term, driven mainly by the startup of projects in Asia, the North Sea and the U.S.
The company expects to use proceeds from the asset sales announced Wednesday to fund a $10 billion share repurchase program it had previously unveiled, and for capital investment. In a slide presentation, the company said it expects share buybacks to total $11 billion through 2012.
Conoco plans $13.5 billion of capital spending this year, with the vast majority targeted for exploration and development. It said it plans to invest $14 billion to $15 billion per year from 2012 to 2015.
Mulva, who has run the company since 1999, said Conoco's spending plans are unlikely to change with his expected retirement next year.
"The company is in great shape. It makes a lot of sense to do it at that point in time," Mulva said.
Conoco said it plans to invest 50% more this year in projects in North America mainly aimed at increasing drilling activity in oil-rich shale areas such as the Eagle Ford in Texas and the Bakken Shale in North Dakota.
Mulva said it is unlikely Conoco will make any large-scale acquisitions but he added it could expand its presence in some areas such as the deepwater of the Gulf of Mexico through small scale deals.
ConocoPhillips said it sees oil prices remaining strong in the long term, driven by increased global demand, but added that natural gas prices in the U.S. are likely to remain depressed due the shale gas production boom.
The company said it plans to invest $1.4 billion in the APLNG project, which will be sanctioned by mid-year and have its first liquid natural gas delivery in 2015. Conoco is also planning to ramp up exploratory drilling in the Caspian Sea, with a new well planned for its Kazakhstan N Block offshore for late this year or early 2012. The company is also negotiating a production sharing agreement for Block 19 in Turkmenistan.
Link
Budget fuel price call by Welsh Tories and Lib Dems
23 March 2011 Last updated at 06:44 GMT
Chancellor George Osborne has been urged to help Welsh motorists with fuel prices when he delivers his Budget.
Mr Osborne has hinted that he may scrap a fuel duty rise due next month.
Conservative assembly group leader Nick Bourne said he had "to do what's right by the country" and hoped he could act on fuel.
Welsh Liberal Democrat leader Kirsty Williams said household budgets were under pressure and called for the fuel duty increase to be scrapped.
The Tories and Lib Dems said the UK government had laid the foundations for economic growth by dealing with the deficit.
But the Welsh Assembly Government said spending cuts were too deep and too fast.
On Sunday, Mr Osborne told the BBC's The Andrew Marr Show that he was "looking very carefully" at freezing the duty in Wednesday's Budget.
With uncertainty in the Middle East and Libya contributing to increased oil prices, the cost of petrol has risen sharply.
The Welsh Lib Dem leader said last year's Budget was "difficult... but it laid the foundations for the sustained economic recovery that Wales needs", she said.
"Fuel duty is now a real issue for so many families, particularly in rural Wales," she added.
The Wales Office has asked the Treasury to cut the cost of petrol by up to 5p a litre in rural Wales.
Minister David Jones recently revealed that he asked for a proposed fuel duty rebate scheme to be extended to the Welsh countryside
Growing the economy
But Welsh Assembly Government Finance Minister Jane Hutt said: "My main message to the chancellor is that the cuts are too fast and too deep and they are putting families, communities and businesses at risk in Wales."
She said the Budget needed to take action to stop the UK sliding back into recession, adding: "We need to see that there is a clear plan for growth and jobs."
Prime Minister David Cameron has rejected claims that Wales has been unfairly targeted by spending cuts.
Plaid Cymru said the Westminster coalition government should have concentrated on growing the economy instead of cutting spending in its first budget last year.
Plaid MP Jonathan Edwards said: "Quite simply, they got it the wrong way around."
Trade union Unison said its research showed last October's spending review could deprive the Welsh economic of £3.6bn and warned of 52,000 job losses, with half coming from the private sector.
Unison Cymru secretary Paul O'Shea said: "The view that the private sector is going to mop up the job losses being experienced in the public sector is merely wishful thinking."
Link
Chancellor George Osborne has been urged to help Welsh motorists with fuel prices when he delivers his Budget.
Mr Osborne has hinted that he may scrap a fuel duty rise due next month.
Conservative assembly group leader Nick Bourne said he had "to do what's right by the country" and hoped he could act on fuel.
The Chancellor has faced calls for action after a sharp rise in petrol prices
The Tories and Lib Dems said the UK government had laid the foundations for economic growth by dealing with the deficit.
But the Welsh Assembly Government said spending cuts were too deep and too fast.
On Sunday, Mr Osborne told the BBC's The Andrew Marr Show that he was "looking very carefully" at freezing the duty in Wednesday's Budget.
With uncertainty in the Middle East and Libya contributing to increased oil prices, the cost of petrol has risen sharply.
Motoring organisations have called on the government to scrap the planned rise in duty. It is due to take effect in April when it will go up by inflation plus 1p, making a total rise of about 4p per litre.
The Welsh Lib Dem leader said last year's Budget was "difficult... but it laid the foundations for the sustained economic recovery that Wales needs", she said.
"Fuel duty is now a real issue for so many families, particularly in rural Wales," she added.
The Wales Office has asked the Treasury to cut the cost of petrol by up to 5p a litre in rural Wales.
Minister David Jones recently revealed that he asked for a proposed fuel duty rebate scheme to be extended to the Welsh countryside
Growing the economy
But Welsh Assembly Government Finance Minister Jane Hutt said: "My main message to the chancellor is that the cuts are too fast and too deep and they are putting families, communities and businesses at risk in Wales."
She said the Budget needed to take action to stop the UK sliding back into recession, adding: "We need to see that there is a clear plan for growth and jobs."
Prime Minister David Cameron has rejected claims that Wales has been unfairly targeted by spending cuts.
Plaid Cymru said the Westminster coalition government should have concentrated on growing the economy instead of cutting spending in its first budget last year.
Plaid MP Jonathan Edwards said: "Quite simply, they got it the wrong way around."
Trade union Unison said its research showed last October's spending review could deprive the Welsh economic of £3.6bn and warned of 52,000 job losses, with half coming from the private sector.
Unison Cymru secretary Paul O'Shea said: "The view that the private sector is going to mop up the job losses being experienced in the public sector is merely wishful thinking."
Link
Increasing volume of legislation costs businesses £2bn
23 March 2011 Last updated at 06:33 GMT
Nigel Smyth's comments come ahead of the Chancellor, George Osborne's first annual Budget statement on Wednesday.
Mr Smyth said additional support for growth and job creation, and less red tape, particularly relating to employment were the main preoccupations for Northern Ireland business.
He said that business organisations had been lobbying hard to encourage government to reduce barriers to high-growth companies in order to create employment.
"This includes doing something to relieve the regulatory burden," he said.
"But they are also having to cope with increasing costs such as the carbon reduction commitment, which from being an incentive, has now turned into a carbon tax."
Mr Smyth said that Northern Ireland companies were competing in global markets now, and many of their competitors were not having to deal with the same level of regulation.
As a result they had a lower cost base than companies based in the UK, he said
He said: "The danger is that some of these highly successful, highly productive companies will simply move to locations where the cost base is not so high."
Dr Esmond Birnie, the chief economist for PricewaterhouseCoopers in Northern Ireland, believes that any tax increases in the Budget would have a serious effect on the local economy.
"February's unemployment is up 6.3% year-on-year," Dr Birnie said.
"That is the highest increase of all 12 UK regions, and we are forecasting that local economic growth will not exceed one per cent in 2011.
"It means that further tax increases could have a disproportionate impact on economic growth and business confidence."
On the bright side, it is thought that the 1p rise in fuel duty due on 1st April might be postponed because of the recent steep increase in oil prices, while personal tax allowances are set to go up by £1,000 to £7,475 for 2011/12.
It is estimated that this should reduce the tax liability of 23 million taxpayers by an average of £200 a year.
The Chancellor has already promised to increase personal allowances to £10,000 by 2015.
An announcement is also expected on the subject of corporation tax, or company profits.
Many economists and Northern Ireland business people have been arguing strongly that a reduction from the current rate of 28% closer to the rate of 12.5% which exists in the Republic, would do much to encourage inward investment.
Link
Businesses have lost out on more than £2bn in the last decade due to an increasing volume of legislation, according to business lobby group the CBI.
Mr Smyth said additional support for growth and job creation, and less red tape, particularly relating to employment were the main preoccupations for Northern Ireland business.
Nigel Smyth of the CBI says businesses are having to deal with an increase in legislation
He said that business organisations had been lobbying hard to encourage government to reduce barriers to high-growth companies in order to create employment.
"This includes doing something to relieve the regulatory burden," he said.
"But they are also having to cope with increasing costs such as the carbon reduction commitment, which from being an incentive, has now turned into a carbon tax."
Mr Smyth said that Northern Ireland companies were competing in global markets now, and many of their competitors were not having to deal with the same level of regulation.
As a result they had a lower cost base than companies based in the UK, he said
He said: "The danger is that some of these highly successful, highly productive companies will simply move to locations where the cost base is not so high."
Dr Esmond Birnie, the chief economist for PricewaterhouseCoopers in Northern Ireland, believes that any tax increases in the Budget would have a serious effect on the local economy.
"February's unemployment is up 6.3% year-on-year," Dr Birnie said.
"That is the highest increase of all 12 UK regions, and we are forecasting that local economic growth will not exceed one per cent in 2011.
"It means that further tax increases could have a disproportionate impact on economic growth and business confidence."
On the bright side, it is thought that the 1p rise in fuel duty due on 1st April might be postponed because of the recent steep increase in oil prices, while personal tax allowances are set to go up by £1,000 to £7,475 for 2011/12.
It is estimated that this should reduce the tax liability of 23 million taxpayers by an average of £200 a year.
The Chancellor has already promised to increase personal allowances to £10,000 by 2015.
An announcement is also expected on the subject of corporation tax, or company profits.
Many economists and Northern Ireland business people have been arguing strongly that a reduction from the current rate of 28% closer to the rate of 12.5% which exists in the Republic, would do much to encourage inward investment.
Link
Today's Trends: Natural Gas Funnelling
Tuesday, March 22, 2011
Rigzone Staff
by Trey Cowan
The cylinder sections in the graph above represent a range of, plus-to-minus one, standard deviation surrounding the average annual natural gas prices for the corresponding years. Trading patterns over the last three years indicate that the price volatility of natural gas has diminished significantly. Specifically, the range has narrowed from $4.28 in 2008 to just $0.58 at present.
While much has been written about oversupply issues, the normal corrective mechanisms (i.e. participants leaving) appear to be taking root in the natural gas markets. Specifically, since October 2010, the US land gas rig count has fallen from 950 to 856 rigs, a 10% decline. Taking the conservative assumption that each rig could drill 10 wells per year implies that 940 (10 wells x 94 rigs) fewer natural gas wells will be drilled over the next twelve months.
Given the dramatic decline curves associated with shale gas, such as the depleting 70% during the first year in the Marcellus; the downward trend in rig count implies that future reserve replacement will not likely keep pace with existing production. Such a scenario points to a rebalancing of supply and demand in the U.S.
The discipline we are seeing with regards to a lower natural gas rig count is not occurring in a vacuum. These rigs that were drilling for natural gas are now drilling for oil. In fact, the US land oil rig count has increased by 153 rigs over the same time frame (i.e. from last October until now). E&P firms have made it clear that the incremental return per unit of $11, favoring oil, is a strong incentive to continue shifting resources. Thus, additional drilling to reinvigorate gas production will not resume quickly once prices begin to improve because the equipment will likely not be available.
With prices stabilizing and production normalizing, we can now envision a point in the future months where price improvement rather than price destruction can be seen as the ensuing trend. Other factors that are starting to play to the natural gas market's hand are strengthening industrial demand and a trend towards more electricity generation using natural gas as the fuel. Given the recent nuclear crisis in Japan, the backlash on nuclear energy will only make burning natural gas even more desirable.
So, even with the +7% recent surge in natural gas prices last week, we still see reasons to get more bullish on the commodity in the near future.
Link
Tuesday, March 22, 2011
Allies Expand Libya Air Campaign, Debate Chain of Command
Allies Expand Libya Air Campaign, Debate Chain of Command
March 22, 2011, 8:34 AM EDT
(Updates with oil prices in fifth paragraph, Erdogan in seventh, Turkish offer in 13th. For more on Middle East turmoil, see EXTRA and MET.)
March 22 (Bloomberg) -- Allied forces expanded their air campaign over Libya to thwart Muammar Qaddafi’s fighters and enable rebels to regain control of cities, as leaders debated who should be in overall control of the operation.
Aerial strikes enabled rebel forces to push out from their eastern stronghold of Benghazi as the United States Africa Command indicated that an F-15E jet crashed because of technical difficulties. At the same time, Norway is keeping its fighters grounded until there is clarity on the chain of command as France, the U.K. and allies including Turkey and the Arab states struggle to agree on whether NATO should guide the operation.
“The biggest obstacle to the Libyan intervention right now isn’t the Arab world but rather differences among France, the U.K. and the U.S. about who’s in charge,” Jan Techau, director of the Carnegie Endowment for International Peace in Brussels and former NATO defense analyst, said by telephone.
The conflict, which began in February in Benghazi, is the bloodiest in a series of uprisings that have spread across the Middle East this year and ousted the leaders of Egypt and Tunisia. Five members of the UN Security Council abstained from last week’s resolution that authorized the military operation, which is intended to limit civilian casualties.
Oil Markets
Oil traded near the highest price in more than a week as the airstrikes threatened to prolong a supply disruption. Crude for April delivery on the New York Mercantile Exchange was at $102 a barrel, down 33 cents, at 11 a.m. London time, after rising as high as $102.67. Yesterday, it gained $1.26 to $102.33, the highest settlement since March 10. Tension in the region is adding a risk premium of $15 to $20 a barrel to Brent oil prices, according to Societe Generale SA.
Libyan rebels in Benghazi said they have created a new national oil company to replace the corporation controlled by Qaddafi. Its assets were frozen by the United Nations Security Council. Libya has the largest oil reserves of any country in Africa, according to the BP Statistical Review of World Energy.
The option of the North Atlantic Treaty Organization taking charge of military operations may hinge in part on the extent of reservations expressed by Turkish Prime Minister Recep Tayyip Erdogan. Dialogue with the Libyan regime must continue, the premier said today in a speech to his party in parliament. Turkey has doubts over whether military intervention is justified, he said.
NATO Debate
Both Britain and Italy supported giving leadership to NATO, which requires unanimous approval from its member countries, including Turkey. The Italian Foreign Ministry said in a statement yesterday that NATO should “take on the command and control” of military operations.
Complicating matters, Arab League countries, who called for the no-fly zone, may not want to operate under NATO’s leadership, U.S. Defense Secretary Robert Gates said at a news conference March 20.
U.S. Vice Admiral Bill Gortney said Spain, Belgium, Denmark and Qatar have joined the coalition. The U.S., the U.K., France, Italy and Canada have at least 25 ships off the coast of Libya, including the French aircraft carrier Charles de Gaulle and the Italian carrier Giuseppe Garibaldi
The U.K. and U.S. were angered by France’s decision to launch the first attack March 20 without fully consulting its allies, the London-based Financial Times reported today, citing unidentified diplomats.
March 22, 2011, 8:34 AM EDT
(Updates with oil prices in fifth paragraph, Erdogan in seventh, Turkish offer in 13th. For more on Middle East turmoil, see EXTRA and MET.)
March 22 (Bloomberg) -- Allied forces expanded their air campaign over Libya to thwart Muammar Qaddafi’s fighters and enable rebels to regain control of cities, as leaders debated who should be in overall control of the operation.
Aerial strikes enabled rebel forces to push out from their eastern stronghold of Benghazi as the United States Africa Command indicated that an F-15E jet crashed because of technical difficulties. At the same time, Norway is keeping its fighters grounded until there is clarity on the chain of command as France, the U.K. and allies including Turkey and the Arab states struggle to agree on whether NATO should guide the operation.
“The biggest obstacle to the Libyan intervention right now isn’t the Arab world but rather differences among France, the U.K. and the U.S. about who’s in charge,” Jan Techau, director of the Carnegie Endowment for International Peace in Brussels and former NATO defense analyst, said by telephone.
The conflict, which began in February in Benghazi, is the bloodiest in a series of uprisings that have spread across the Middle East this year and ousted the leaders of Egypt and Tunisia. Five members of the UN Security Council abstained from last week’s resolution that authorized the military operation, which is intended to limit civilian casualties.
Oil Markets
Oil traded near the highest price in more than a week as the airstrikes threatened to prolong a supply disruption. Crude for April delivery on the New York Mercantile Exchange was at $102 a barrel, down 33 cents, at 11 a.m. London time, after rising as high as $102.67. Yesterday, it gained $1.26 to $102.33, the highest settlement since March 10. Tension in the region is adding a risk premium of $15 to $20 a barrel to Brent oil prices, according to Societe Generale SA.
Libyan rebels in Benghazi said they have created a new national oil company to replace the corporation controlled by Qaddafi. Its assets were frozen by the United Nations Security Council. Libya has the largest oil reserves of any country in Africa, according to the BP Statistical Review of World Energy.
The option of the North Atlantic Treaty Organization taking charge of military operations may hinge in part on the extent of reservations expressed by Turkish Prime Minister Recep Tayyip Erdogan. Dialogue with the Libyan regime must continue, the premier said today in a speech to his party in parliament. Turkey has doubts over whether military intervention is justified, he said.
NATO Debate
Both Britain and Italy supported giving leadership to NATO, which requires unanimous approval from its member countries, including Turkey. The Italian Foreign Ministry said in a statement yesterday that NATO should “take on the command and control” of military operations.
Complicating matters, Arab League countries, who called for the no-fly zone, may not want to operate under NATO’s leadership, U.S. Defense Secretary Robert Gates said at a news conference March 20.
U.S. Vice Admiral Bill Gortney said Spain, Belgium, Denmark and Qatar have joined the coalition. The U.S., the U.K., France, Italy and Canada have at least 25 ships off the coast of Libya, including the French aircraft carrier Charles de Gaulle and the Italian carrier Giuseppe Garibaldi
The U.K. and U.S. were angered by France’s decision to launch the first attack March 20 without fully consulting its allies, the London-based Financial Times reported today, citing unidentified diplomats.
[Oil and Gas Post] - Oil Slips From Two-Week High on Speculation Mideast Risk Limited to Libya
Oil Slips From Two-Week High on Speculation Mideast Risk Limited to Libya
By - Mar 22, 2011 4:22 PM GMT+0700
Crude oil retreated from its highest price in almost two weeks amid speculation that supply disruptions from political unrest in North African and the Middle East may be confined to Libya.
Futures slipped after climbing as much as 0.3 percent as demonstrators in Yemen spent the night on streets to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt. Tension in the region is adding a risk premium of $15 to $20 a barrel to Brent oil prices, according to Societe Generale SA.
“The unrest in Libya seems to be priced in almost completely by now,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said in an interview with Bloomberg television. “The price will stay at elevated levels of around $110 to $120 for several months and will drop back to $90 by the year-end.”
Crude for April delivery on the New York Mercantile Exchange was at $102.05 a barrel, down 28 cents, at 9:15 a.m. London time, after rising as high as $102.67. Yesterday, it gained $1.26 to $102.33, the highest settlement since March 10. The April contract expires today. The more-actively traded May futures were down 22 cents at $102.87 a barrel. Brent oil for May settlement was at $114.65, down 31 cents, on the ICE Futures Europe exchange in London after rising as much as 0.5 percent. The spread between the two May contracts narrowed to $11.80 a barrel from $11.87 yesterday.
Regional Unrest
Regional turmoil has toppled the leaders of Tunisia and Egypt and reached Yemen, Bahrain and Syria. Societe Generale raised its forecast for Brent by $11 to average $109 a barrel this year as political risks increased, analysts led by Michael Wittner said in a report dated yesterday.
Allied forces are expanding their air campaign over Libya in an effort to thwart Muammar Qaddafi’s fighters and enable rebels to control cities, such as the opposition capital of Benghazi, which had been under attack by troops loyal to the regime. The Libyan leader denounced the coalition allied against him, which includes the U.S., the U.K. and France, as “the party of Satan.”
Libyan output has fallen to fewer than 400,000 barrels a day, Shokri Ghanem, chairman of Libya’s National Oil Co., said on March 19. The country produced 1.59 million barrels a day in January, according to estimates compiled by Bloomberg. Exports may be halted for “many months” because of sanctions and damage to facilities, the International Energy Agency said.
Libyan oil production is likely to remain disrupted for the rest of this year, said Lawrence Eagles, head of commodities research at JPMorgan Chase & Co. in New York.
Protest in Yemen
Thousands of Yemenis spent the night on streets across the country to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt by army leaders, ministers and diplomats. Yemen produced about 298,000 barrels of oil daily in 2009, according to BP Plc data.
Military officers including Ali Muhsin al-Ahmar, commander of the first armored division, and Mohammed Ali Muhssein, commander of the eastern region, abandoned the regime yesterday. Their move was a result of the crackdown three days ago that left dozens dead, said Mohammed al-Sabri, an opposition leader.
Bahrain’s government declared a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to help in quelling more than a month of protests.
Japan is delivering more relief supplies in areas hardest hit by the March 11 earthquake as workers restored power to two reactors at a crippled Fukushima Dai-Ichi nuclear power plant yesterday, prompting Prime Minister Naoto Kan to say there was “light at the end of the tunnel.”
Short-Term Drop
“The recent tragic events in Japan will result in a sharp short-term drop in economic activity but is likely to be followed by a strong recovery driven by reconstruction and replacement of durables which would boost the demand for many commodities,” Societe Generale’s analysts said.
Japan was responsible for 5.2 percent of global oil demand in 2009, according to BP, which publishes its Statistical Review of World Energy each June. Japan is the third-biggest crude- consuming country, after the U.S. and China.
To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
Link
http://www.bloomberg.com/
By - Mar 22, 2011 4:22 PM GMT+0700
Crude oil retreated from its highest price in almost two weeks amid speculation that supply disruptions from political unrest in North African and the Middle East may be confined to Libya.
Futures slipped after climbing as much as 0.3 percent as demonstrators in Yemen spent the night on streets to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt. Tension in the region is adding a risk premium of $15 to $20 a barrel to Brent oil prices, according to Societe Generale SA.
“The unrest in Libya seems to be priced in almost completely by now,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, said in an interview with Bloomberg television. “The price will stay at elevated levels of around $110 to $120 for several months and will drop back to $90 by the year-end.”
Crude for April delivery on the New York Mercantile Exchange was at $102.05 a barrel, down 28 cents, at 9:15 a.m. London time, after rising as high as $102.67. Yesterday, it gained $1.26 to $102.33, the highest settlement since March 10. The April contract expires today. The more-actively traded May futures were down 22 cents at $102.87 a barrel. Brent oil for May settlement was at $114.65, down 31 cents, on the ICE Futures Europe exchange in London after rising as much as 0.5 percent. The spread between the two May contracts narrowed to $11.80 a barrel from $11.87 yesterday.
Regional Unrest
Regional turmoil has toppled the leaders of Tunisia and Egypt and reached Yemen, Bahrain and Syria. Societe Generale raised its forecast for Brent by $11 to average $109 a barrel this year as political risks increased, analysts led by Michael Wittner said in a report dated yesterday.
Allied forces are expanding their air campaign over Libya in an effort to thwart Muammar Qaddafi’s fighters and enable rebels to control cities, such as the opposition capital of Benghazi, which had been under attack by troops loyal to the regime. The Libyan leader denounced the coalition allied against him, which includes the U.S., the U.K. and France, as “the party of Satan.”
Libyan output has fallen to fewer than 400,000 barrels a day, Shokri Ghanem, chairman of Libya’s National Oil Co., said on March 19. The country produced 1.59 million barrels a day in January, according to estimates compiled by Bloomberg. Exports may be halted for “many months” because of sanctions and damage to facilities, the International Energy Agency said.
Libyan oil production is likely to remain disrupted for the rest of this year, said Lawrence Eagles, head of commodities research at JPMorgan Chase & Co. in New York.
Protest in Yemen
Thousands of Yemenis spent the night on streets across the country to maintain pressure on President Ali Abdullah Saleh, who is facing a growing internal revolt by army leaders, ministers and diplomats. Yemen produced about 298,000 barrels of oil daily in 2009, according to BP Plc data.
Military officers including Ali Muhsin al-Ahmar, commander of the first armored division, and Mohammed Ali Muhssein, commander of the eastern region, abandoned the regime yesterday. Their move was a result of the crackdown three days ago that left dozens dead, said Mohammed al-Sabri, an opposition leader.
Bahrain’s government declared a three-month state of emergency on March 15 after troops from Saudi Arabia and other Arab Gulf states arrived to help in quelling more than a month of protests.
Japan is delivering more relief supplies in areas hardest hit by the March 11 earthquake as workers restored power to two reactors at a crippled Fukushima Dai-Ichi nuclear power plant yesterday, prompting Prime Minister Naoto Kan to say there was “light at the end of the tunnel.”
Short-Term Drop
“The recent tragic events in Japan will result in a sharp short-term drop in economic activity but is likely to be followed by a strong recovery driven by reconstruction and replacement of durables which would boost the demand for many commodities,” Societe Generale’s analysts said.
Japan was responsible for 5.2 percent of global oil demand in 2009, according to BP, which publishes its Statistical Review of World Energy each June. Japan is the third-biggest crude- consuming country, after the U.S. and China.
To contact the reporters on this story: Ann Koh in Singapore at akoh15@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
Link
http://www.bloomberg.com/
Subscribe to:
Posts (Atom)