Iraq: Oil prices may drag budget lower

BAGHDAD – Iraq’s parliament pushed back voting Saturday on this year’s budget and could be forced to make further cuts because of falling oil prices.

The latest delay in trying to ratify the current $64 billion budget proposal highlights the financial squeeze facing Iraq as declining oil revenues cut into reconstruction plans such as new roads and improved utilities — which the Shiite-led government hopes to use as showcases in national elections later this year.

The pinch has also brought calls by Prime Minister Nouri al-Maliki for proposals to diversify Iraq’s oil-dependent economy with expansion of agriculture and other trade. But Iraq’s plans for this year have been dragged down along with the price of oil, which is now less than $45 a barrel after hitting highs last summer of $150 a barrel.

A Sunni lawmaker, Ayad al-Samarraie, predicted the budget will face more trimming after several previous cuts from its original $79 billion. The current budget is based on a $50 a barrel projection.

“We don’t expect that oil will reach this price,” said al-Samarraie, a member of the chamber’s financial committee.

He urged lawmakers to take a comprehensive look at all spending, suggesting that more money go to electricity and other public projects at the expense of deeper cuts in other areas.

Shatha al-Mousawi, the Shiite member of the finance committee, called for possible sharp reductions in the National Security Adviser office, which was established shortly after the fall of Saddam Hussein in 2003. She said it has 377 employees and suggested cutting it to just 16.

“The studies and reports show that the falling oil prices will continue for two or three years,” she said.

It was unclear when the budget could eventually come for a vote.

Army Lt. Gen. Frank Helmick, commander of Multi-National Security Transition Command, told The Associated Press that the budget crisis would force Iraq to make some very difficult decisions about how to grow its security forces.

“They are many, many hard decisions that they are going to have to make,” he said.

He said U.S. military advisers have been making recommendations to the Iraqi security officials on possible ways to deal with the shrunken budget. An example, Helmick said, could be reducing the number of Abrams tanks sought by Iraqi forces.

He said essential services such as Iraqi police and military payroll, electricity and water could not be cut.

In Diyala province northeast of Baghdad, Iraqi forces arrested 11 suspected insurgents including the so-called “oil minister” of the self-styled Islamic State of Iraq, a purported political faction linked to al-Qaida in Iraq.

An Interior Ministry statement said Ali Mahmoud Mohammed and 10 other suspected insurgents were arrested in a raid in a Diyala village. No other details were given.

An al-Qaida front group announced the formation of an “Islamic Cabinet” in April 2007 in a bid to challenge the Iraqi government. The Cabinet purportedly includes the leader of al-Qaida in Iraq as “war minister.”

Iraqi authorities accuse Mohammed of hijacking oil tanker trucks, kidnapping and killing the drivers and blowing up oil pipelines.

In Baghdad, the head of the Iraqi High Tribunal said a mid-April trial date is planned for the first war crimes trial of Iraqis since the U.S.-led invasion.

Two members of Saddam’s former Baath Party are accused of executing two British soldiers taken captive by a mob in southern Iraq in 2003. The exact trial date has not been set, said Aref al-Shaheen, the head of the Iraqi High Tribunal, which was set up to hear the cases against members of Saddam’s regime.

The trials of Saddam and others have been under charges of crimes against humanity.

“It is the first case of war crimes … The two wounded soldiers were killed instead of given medical treatment,” said al-Shaheen.

At least 15 U.S. troops died in Iraq in February, including 12 who were killed in combat, according to an Associated Press tally. That compared with nine U.S. combat deaths in January.

A report from Iraq’s Interior and Health ministries said 211 civilians were killed and 437 wounded in February — compared with 138 killed and 303 wounded in January. The figures were given by officials from the ministries who spoke in condition of anonymity because they were not authorized to release the information.

___

Associated Press writers Sameer N. Yacoub, Sinan Salaheddin and Chelsea J. Carter contributed to this report

source : news.yahoo.com

Blast damages NATO oil tanker in Pakistan: official

PESHAWAR: One person was killed and two wounded in northwest Pakistan on Saturday when a bomb exploded near a fuel tanker destined for NATO forces in Afghanistan, an official said.

The remote-controlled bomb was planted on the main highway linking Peshawar city with the Torkham border crossing, local official Fazle Akbar told by telephone.

The blast partially damaged the oil tanker, but its driver escaped injuries, Akbar said, adding a passer-by was killed and two local men were injured. A security official also confirmed the incident but gave no casualty figure.

The explosion occurred in the troubled tribal district of Khyber, where Taliban and Al-Qaeda-linked insurgents have carried out a series of attacks on NATO vehicles and terminals outside the northwestern city of Peshawar.

The NATO and US-led forces in landlocked Afghanistan are hugely dependent on Pakistan for their supplies and equipment, around 80 percent of which are transported through the neighbouring country. Militants earlier this month blew up a key bridge on the main supply route for NATO forces and torched several trucks bringing goods from the southern port of Karachi for forces battling a Taliban insurgency in Afghanistan.

source : jang.com.pk

Oil mixed in Asian trade

SINGAPORE: Oil prices were mixed in Asian trade Thursday ahead of a report expected to show a build-up in US crude inventories during the recession, dealers said.

New York’s main contract, light sweet crude for March delivery, eased a penny to 34.61 dollars a barrel, within sight of the 32.40 dollars hit on December 18, when prices hit their lowest point in nearly five years.

Brent North Sea crude for April delivery was 36 cents higher at 39.91 dollars.

source : jang.com.pk

Kuwait appoints new oil minister

KUWAIT CITY: Kuwait has appointed a new oil minister to fill a key position left vacant since the Cabinet resigned in November.

Kuwait’s official news agency says Sheik Ahmed Al Abdullah AlSabah was sworn in Monday. It did not elaborate. He formerly served as health minister.

The other Cabinet posts were filled last month. In the interim, the oil-rich country’s foreign minister had been handling the post.

The last Cabinet resigned in November to avoid an attempt by three lawmakers to question Prime Minister Sheik Nasser Al Mohammed Al Sabah about corruption allegations and deteriorating public services.

source : jang.com.pk

Oil prices steady in Asia

SINGAPORE: World oil traded steady in Asia on Monday after OPEC member Iraq predicted the cartel will announce further production cuts in a market struggling with weak demand.

New York’s main oil futures contract, light sweet crude for delivery in March, rose seven cents to 40.24 dollars a barrel in afternoon trade. Brent North Sea crude for March rose two cents to 46.23 dollars a barrel.

Iraq’s oil minister at the weekend predicted that the Organisation of the Petroleum Exporting Countries (OPEC) plans more output reductions.

“In March, OPEC will convene and there will be an intention for more production cuts to shore up prices and encourage production from non-OPEC members,” Hussein al-Shahristani said, according to his close adviser Falah al-Amiri.

OPEC recently signalled it would consider more output cuts in a bid to bolster prices. Since last July, when oil prices hit records above 147 dollars a barrel, prices have tumbled because of weaker demand in a slowing global economy, analysts say.

OPEC announced production cuts totalling 4.2 million barrels per day late last year but David Johnson, an oil analyst with Macquarie Securities, said 2.75 million barrels have so far been cut in practice. He said he does not see daily cuts exceeding four million barrels. “I don’t think they can do much more than that,” Johnson said.

Oil prices are stuck in the 40 to 45 dollar range, balanced between expectations of OPEC’s next moves and poor demand reflected in economic data such as Friday’s US unemployment figures, he said.

source : jang.com.pk

Oil dips below $42 as inventories swell

VIENNA: Rising crude inventories and a dismal global economic outlook dragged oil prices below $42 a barrel Thursday, despite some hope that a massive U.S. stimulus package will revive growth and consumer demand.

The U.S. House of Representatives’ $819 billion plan passed Wednesday night aims at spurring growth amid the worst recession in decades. The package, which includes tax cuts for individuals and businesses, should create or save more than 3 million jobs, President Barack Obama said after the vote. The Senate will begin debate on the bill next week.

But a fourth week of soaring oil inventories dampened expectations that the stimulus plan could spark crude demand.

Light, sweet crude for March delivery fell 70 cents to $41.46 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. The contract rose 58 cents overnight to settle at $42.16.

The U.S. Energy Department’s Energy Information Administration on Wednesday said commercial crude oil inventories jumped 6.2 million barrels from the previous week, almost twice what was expected.

Overall supplies jumped to a 45.9 million barrel surplus, representing a 16 percent increase since 2008.

“We’re seeing inventory numbers piling up, so that’s going to keep the price of crude capped,” said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore.

source : jang.com.pk

Oil firms towards $42 after sharp fall

LONDON: Oil edged higher towards $42 a barrel on Wednesday, recovering from a 9 percent plunge the previous day after more evidence of deepening recession in the United States raised the potential for further demand erosion.

Traders were awaiting weekly U.S. inventory data from the Energy Information Administration (EIA) due later in the day, which was expected to show still higher fuel stockpiles. U.S. crude rose 9 cents a barrel to $41.67 by 0941 GMT and London Brent crude climbed 62 cents to $44.35.

Oil gained slightly as some traders saw Tuesday’s sharp drop as a buying opportunity. World stock markets were also trading higher after reassuring corporate results on Wall Street. The global economic crisis has weakened crude demand, especially in developed economies, and knocked prices off peaks of over $147 a barrel hit in July. OPEC meets on March 15 to decide on output policy.

source : jang.com.pk

Oil spill in Russian Far East kills hundreds of birds: reports

MOSCOW: A fuel oil spill off Russia’s far eastern island of Sakhalin has killed hundreds of birds in a wildlife area of international importance, Russian news agencies reported Monday.

“Hundreds of birds have been killed, including ducks, guillemots and divers,” the local news agency quoted the head of the Sakhalin diving centre Vladimir Bardin as saying.

“The shore is covered for three kilometers (two miles) with birds stuck in the fuel oil. The local population are trying to rescue the birds that are still alive and wash them,” he said.

He added there was a risk that the stricken birds could attract the rare Steller’s Sea Eagle — one of the island’s foremost wildlife attractions — which could choke and die if it attempts to eat them.

The spill in Aniva Bay on the south of Sakhalin took place six kilometers from a major liquefied natural gas (LNG) plant being built by the international consortium exploiting its Sakhalin-2 reserves.

source : jang.com.pk

Govt. failed to get a slash in branded companies oil, ghee prices

KARACHI: All the branded companies are still selling their edible oil and ghee at Rs120-135 per kilo, despite government announcement of Rs3-5 per kilo reduction.

Karachi Retail Grocers Group said that the branded companies were selling edible oil and ghee at Rs120-135 in the local market, while the government had earlier in November 2008 fixed the oil and ghee prices at Rs98 per kilo, but the branded companies in brazen violation of the government writ continued selling their products at Rs135-140 per kilo. The government recently further announced a cut in oil and ghee prices by Rs3-5, but this time again it appeared that the branded companies are in no mood of abiding the government directives and the citizens are forced to buy oil and ghee at higher prices. Sugar price in the local market has also shot up by Rs6 per kilo during the last one month and it is being sold at Rs40 per kilo.

source : jang.com.pk

Oil hovers above $40 in Asia

SINGAPORE: Oil prices hovered above $40 a barrel Monday in Asia as investors looked to key U.S. corporate results this week for indications of the health of the world’s largest economy and demand for crude.

Light, sweet crude for February delivery was down 55 cents at$40.28 barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract on Friday fell 87 cents to settle at $40.83.

source : jang.com.pk

5 Somali pirates drown with ransom share

MOGADISHU, Somalia – Five of the Somali pirates who released a hijacked oil-laden Saudi supertanker drowned with their share of a reported $3 million ransom after their small boat capsized, a pirate and port town resident said Saturday.

Pirate Daud Nure says the boat with eight people on board overturned in a storm after dozens of pirates left the Sirius Star following a two-month standoff in the Gulf of Aden that ended Friday.

He said five people died and three people reached shore after swimming for several hours. Daud Nure was not part of the pirate operation but knew those involved.

Jamal Abdulle, a resident of the Somali coastal town of Haradhere, close to where the ship had been anchored, also confirmed that the boat sank and that the eight’s portion of the ransom money that had been shared among dozens of pirates was lost.

Saudi Arabian oil minister Ali Naimi said Saturday that the crew of the Sirius Star was safe and that the tanker had left Somali territorial waters and was on its way home.

A Saudi Oil Ministry official said the ship was headed for Dammam, on Saudi Arabia’s Gulf coast, but gave no estimated time of arrival. The official spoke on condition of anonymity because he was not authorized to speak to the press.

The Liberian-flagged ship is owned by Vela International Marine Ltd., a subsidiary of Saudi oil company Aramco. A spokesman for the Dubai-based Vela, Mihir Sapru, would not provide details of the ship’s destination or plans once in port.

“We are very relieved to know that all the crew members are safe and I am glad to say that they are all in good health and high spirits,” said a statement by Saleh K’aki, president and CEO of Vela. “This has been a very trying time for them and certainly for their families. We are very happy to report to their families that they will be on their way home soon.”

K’aki added that the “throughout this ordeal, our sole objective was the safe and timely release of the crew. That has been achieved today.”

U.S. Navy photos released Friday showed a parachute, carrying what was described as “an apparent payment,” floating toward the tanker. The Sirius Star and its 25-member crew had been held since Nov. 15. Its cargo of crude oil was valued at US$100 million at the time.

The capture was seen as a dramatic demonstration of the pirates’ ability to strike high value targets hundreds of miles offshore.

On the same day the Saudi ship was freed, pirates released a captured Iranian-chartered cargo ship, Iran’s state television reported Saturday. It said the ship Delight was carrying 36 tons of wheat when it was attacked in the Gulf of Aden Nov. 18 and seized by pirates. All 25 crew are in good health and the vessel is sailing toward Iran, the TV report said.

The pirate-infested Gulf of Aden is one of the world’s busiest shipping routes.

The U.S. Navy announced this week it will head a new anti-piracy task force after more than 100 ships were attacked last year. NATO and the European Union already have warships patrolling the Gulf of Aden and have intervened to prevent several ships from being captured.

More than a dozen ships with about 300 crew members are still being held by pirates off the coast of Somalia, including the weapons-laden Ukrainian cargo ship MV Faina, which was seized in September.

The multimillion dollar ransoms are one of the few ways to earn a living in the impoverished, war-ravaged country. Somalia has not had a functioning government since 1991 and nearly half of its population depends on aid.

___

Associated Press Writers Salad Duhul in Mogadishu, Somalia and Brian Murphy in Dubai, United Arab Emirates contributed to this report.

(This version CORRECTS name of Iranian ship to Delight, sted Daylight.)

source : news.yahoo.com

Oil prices decline on rising US stockpiles

LONDON: Oil prices slumped Wednesday as data revealed larger than expected gains for energy stockpiles in the United States, the world’s biggest crude consuming nation, dealers said.

New York’s main contract, light sweet crude for delivery in February, slid 3.24 dollars to 45.34 dollars a barrel.

Brent North Sea crude for February shed 2.13 dollars to 48.40 dollars a barrel on London’s Inter Continental Exchange.

The US government’s Department of Energy said that stockpiles of crude increased by 6.7 million barrels last week, far higher than analysts predictions of a gain totalling only 700,000 barrels.

Inventories of distillates which include heating fuel — currently in high demand during the ongoing US winter — meanwhile grew by 1.8 million barrels in the week to January 2, above market expectations of 800,000.

“The builds were much higher then expected,” said Sucden trader Robert Montefusco. Ahead of the data, oil prices had risen back above 50 dollars this week on supply worries owing to deepening political frictions in Europe and the oil-rich Middle East.

On Tuesday, the New York contract hit an intra-day peak of 50.47 dollars and Brent leapt to 52.21 — the highest level in more than a month.

Prices had rallied by more than two dollars on Monday after Israel sent soldiers into the Gaza Strip.

Along with the Israeli-Hamas conflict, prices had also risen because of a Russia-Ukraine gas row curtailing supplies to Europe. Shortages of natural gas have spread across Europe, reaching France and Italy.

In addition, freezing temperatures across Europe have also boosted demand for heating fuel.

On Wednesday meanwhile, Libya’s envoy to OPEC said the cartel was not considering holding an extraordinary meeting next month, contradicting Iran which said OPEC would meet in Kuwait in February.

source : jang.com.pk

Oil prices mixed as market focuses on soft demand

NEW YORK: Oil prices were mixed Tuesday as market concerns about soft demand eclipsed supply concerns amid rising geopolitical tensions in the oil-rich Middle East and a gas war between Russia and Ukraine.

New York’s main contract, light sweet crude for February, fell 23 cents a barrel to close at 48.58 dollars on the New York Mercantile Exchange.

In London, Brent North Sea crude for delivery in February rose 91 cents to settle at 50.53 dollars on the InterContinental Exchange.

“There was probably some profit taking, bolstered by the latest economic statistics which are negative. They highlighted the weakness of demand, while recently the market has been preoccupied by supply,” said Antoine Halff, an analyst at Newedge Group.

US data showed a moderating decline in the huge services sector and a continued fall in industrial orders.

Oil prices had found support above 50 dollars a barrel during the session on supply worries due to deepening geopolitical frictions, analysts said.

The New York futures contract hit an intra-day peak of 50.47 dollars and Brent leapt to 52.21 dollars, a level last seen on December 1.

Oil prices have firmed amid the Israel-Hamas conflict in the Gaza Strip and an escalating Russia-Ukraine gas war that is curbing supplies to Europe, analysts said.

source : jang.com.pk

Oil prices fall in Asia

SINGAPORE: World oil prices fell in Asian trade on Tuesday after rising sharply the previous day amid an intensification of Israel’s conflict with Hamas, analysts said.

New York’s main contract, light sweet crude for February delivery, was down 16 cents to 48.65 dollars a barrel, after rising 2.47 dollars to 48.81 dollars a barrel at the close of trading Monday on the New York Mercantile Exchange.

Brent North Sea crude for February delivery fell 32 cents to 49.30 dollars a barrel after closing 2.71 dollars higher at 49.62 dollars on Monday in London.

source : jang.com.pk

France foils two Somali pirate attacks, holds 19

PARIS: A French warship Sunday foiled attempts by Somalian pirates in the Gulf of Aden to seize two cargo vessels and intercepted 19 people, the French president’s office said.

“Three days after a French vessel thwarted an attack on a Panamanian cargo ship” the frigate Jean de Vienne conducted a “decisive action” against “two new attacks” it said in a statement.

“The 19 Somali pirates who tried to seize the two boats were intercepted,” it added, saying they carried weapons, ammunition and material for boarding ships.

“They will be transferred to the Somali authorities,” it added.

The French defence ministry said pirates attempted to attack a Croatian and a Panamanian ship and that French forces seized assault rifles, two rocket launchers, and more than 1,000 litres of oil.

source : jang.com.pk

KARACHI: Load-shedding continues

KARACHI: The load-shedding has been continued in metropolis, however, the duration has been reduced.

The Karachi Electric Supply Corporation (KESC) sources said they are trying to operate production units with full strength after increment of gas supply from Sui Southern Gas Company and purchase of furnace oil.

source : jang.com.pk

Private oil producer suspends production in Karachi

KARACHI: A private oil producer in Karachi has shut the production of oil on Thursday, Geo T.V reported.

Sources said the company suspended production for want of crude oil.

Oil prices slip below 40 dollars on weak demand

NEW YORK: Oil futures slipped below 40 dollars a barrel on Tuesday as the market focused on weak energy demand after hefty price gains a day earlier amid the Israel-Hamas conflict.

New York’s main contract, light sweet crude for February, closed 99 cents lower at 39.03 dollars a barrel.

In London, Brent North Sea crude for delivery in February slipped 40 cents to settle at 40.15 dollars a barrel.

Both benchmark contracts had spiked more than two dollars Monday on the third day of escalating violence between Israel and Hamas.

Israel unleashed a massive bombardment of Hamas targets in the Gaza Strip on Saturday in response to ongoing rocket fire from the territory.

Israel on Tuesday rejected world appeals for a truce and warned its deadly assault on Gaza could last for weeks as warplanes pummeled Hamas positions for a fourth day and tanks massed on the border.

Prices had been higher because of a “political risk premium” resulting from the violence in the Gaza Strip, said Jonathan Kornafel of trading group Hudson Capital Energy.

Kornafel said, however, that underlying weak demand for energy was now weighing on crude futures.

“Despite the reaction to the violence in Israel, oil traders have to wonder whether these moves, created in part by this conflict, are sustainable over the long run,” said Phil Flynn, an analyst at Alaron Trading.

The fighting has fueled fears of wider tensions in the oil-rich Middle East, while thin volumes amid the year-end holiday season also contributed to price volatility.

“It is probably not productive to search too deeply for the rationale behind market movements at this time of year because they are generally more expressive of accounting necessities than market sentiment,” said Mike Fitzpatrick at MF Global.

A sharp global downturn has slashed world demand, pulling oil down from record highs above 147 dollars a barrel in July. New York crude plunged earlier this month to below 33 dollars, its lowest point for almost five years.

source : jang.com.pk

Iran ready for gas deal with Pakistan, without India

TEHRAN: Iran will sign a deal with Pakistan to sell gas to the neighbouring country, even if India, a third party to the deal, walked out, a news agency reported Iran’s oil minister as saying on Monday.

India stayed away from talks in Tehran on a proposed $7 billion pipeline in September, saying it wanted to agree transit costs through Pakistan on a bilateral basis first.

Iran Oil Minister Gholamhossein Nozari said a delegation from Pakistan had arrived in Tehran for two days.

“Iran will sign a deal with Pakistan, if India does not take part in the project,” agency quoted Nozari as saying.

In July, Iran said India and Pakistan had accepted Iran’s demand for gas price reviews based on market changes, denying reports by some Indian newspapers that the pipeline talks had failed after Iran demanded a review every three years.

The pipeline would initially carry 60 million cubic metres of gas daily to Pakistan and India, half for each country. The pipeline’s capacity would later rise to 150 million cu metres.

Iran said it has completed 18 percent of the work for the pipeline to bring gas from its South Pars field to the Iran-Pakistan border.

Pakistan has yet to begin work on a 1,000 km (625 mile) stretch of the pipeline to link Iran with India.

Iran has the world’s second-largest gas reserves after Russia. But sanctions, politics and construction delays have slowed its gas development, and analysts say Iran is unlikely to become a major exporter for a decade.

source : jang.com.pk

Gaza tensions push oil prices above 40 dollars

NEW YORK: Oil prices breached 40 dollars a barrel Monday on rising unrest in the Middle East, bargain hunting and evidence that OPEC members have begun complying with agreed output cuts, traders said.

New York’s main contract, light sweet crude for February delivery, rose 2.31 dollars from Friday’s close to end at 40.02 dollars.

In London, Brent North Sea crude for delivery in February was up 2.18 dollars to 40.55 dollars a barrel on the InterContinental Exchange after earlier rocketing almost five dollars.

Prices rose as Israeli warplanes pounded Gaza for a third day Monday in an “all-out” war on Hamas that has killed at least 345 people and prompted rocket fire from the Palestinian enclave.

The fighting fueled fears of wider tensions in the oil-rich Middle East, traders said. Thin trade owing to the year-end holiday season also made for some price volatility.

“Military action by Israel is always a grave concern because of the uncertainty of where it might lead,” said Mike Fitzpatrick of MF Global.

“The region has been, and remains, a tinderbox and so it has the ability to erupt into a conflagration that could involve oil supplies,” he said.

But while oil prices remained sensitive to geopolitical developments, especially in the Middle East, he cited “the declining dollar, low volume and the return of bargain hunting Europeans” as other factors driving the market.

Traders were also monitoring a Gulf Cooperation Council (GCC) leaders meeting in Oman at which the Gaza turmoil was expected to dominate the talks among Saudi Arabia, the United Arab Emirates, Oman, Qatar, Bahrain and Kuwait, which together sit on 45 percent of global oil reserves.

source : jang.com.pk

More declines for oil on latest batch of bad news

Oil prices dipped below $38 a barrel Tuesday on fresh evidence of weakness in the U.S. housing market and a shrinking gross domestic product that suggests the recession may be worsening.

A report by the Commerce Department showed that sales of new homes fell in November to the slowest pace in nearly 18 years, while new home prices dropped by the biggest amount in eight months.

“The energy markets are reacting first and foremost to bad economic news, and it seems like they’re almost waiting for something bad to occur,” said oil analyst Peter Beutel of Cameron Hanover.

A steady outpouring of gloomy economic news has pushed to the background events that over the summer may have led to price spikes, like OPEC’s announcement this month of unprecedented production cuts, Beutel said.

Prices have fallen 73 percent since July, with massive job layoffs and weak consumer spending eating away at energy use.

“Boy, it really looks ugly for the start of 2009,” said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

“It’s really difficult to find something between now and inauguration time that says people are going to feel better, they’re going to drive more, they’re going to ship more packages,” Kloza said.

Light sweet crude for February delivery fell 93 cents to settle at $38.98 on the New York Mercantile Exchange after dipping to $37.79 earlier in the day.

Oil traders have grown increasingly pessimistic about the global economy, and thus demand for energy.

Economists now believe a small decline in economic activity in the third quarter has worsened significantly.

The Commerce Department said Tuesday that the gross domestic product, the broadest measure of economic health, declined at an annual rate of 0.5 percent in the July-September quarter. Corporate profits fell 1.2 percent.

Some economists believe the economy’s decline in the October-December period could be as large as 6 percent. If so, that would be the worst quarterly drop since 1982.

The pain appears to have spread through almost every level of the economy. On Tuesday, shares of card maker American Greetings Corp. sank to their lowest level in 21 years after the company reported it swung to a loss in its third quarter.

With at least 2 million jobs lost since the beginning of the year and an economy that continues to deteriorate, Americans have drastically cut down on gasoline purchases.

The Federal Highway Administration reported this month that Americans drove more than 100 billion fewer miles between November 2007 and October 2008, compared with the same period a year before.

Retail gasoline prices dropped for the 23rd week, reaching a national average of $1.653 a gallon as of Monday, according to the U.S. Energy Information Administration.

Gasoline futures on the Nymex tumbled as low as 82 cents a gallon Tuesday, the lowest levels in nearly five years.

“I’ve got no reason to buy in this market right now,” analyst and trader Stephen Schork said. “It all hinges on demand, and demand is rather lagging.”

Will consumers eventually see gas at $1 a gallon again?

“That seems remote,” Schork said. “You’d need to see crude below $20 (a barrel) before you could start talking about $1 a gallon at the pump.”

The wild swings in crude prices this year — from a record $147 a barrel to below $40 a barrel — has been especially hard on heating oil companies, small gas distributors and refiners that are selling fuel bought earlier this year when prices were high.

“They’re getting whipsawed in the market,” Schork said. “They don’t have the deep pockets to withstand the volatility.”

On Monday, Ogden, Utah-based oil company Flying J Inc. and two of its subsidiaries filed for Chapter 11 bankruptcy protection, citing a steep drop in oil prices and the lack of available financing due to the disruption in credit markets.

Flying J operates 250 travel plazas and fuel stations in 41 states and six Canadian provinces.

“They won’t be the last marketer or refiner that may have to go the bankruptcy route in the next year or so,” Kloza said. “It’s been pretty rugged out there.”

OPEC said last week it would slash production by 2.2 million barrels a day, its largest cutback ever, reducing the amount of oil produced each day by 4 million barrels in all when earlier cuts are included.

“It will take time for output cuts to flow through, but there’s some doubt about whether there will be full compliance,” said Toby Hassall, an analyst at investment firm Commodity Warrants Australia. “I wouldn’t be surprised if OPEC cut again in January or February. There’s been quite a significant demand side deterioration.”

Meanwhile, Iraq’s Oil Ministry announced it will open its second licensing round for developing its vast oil and gas fields. Iraq sits on more than 115 billion barrels of oil, but decades of war, U.N. sanctions, violence and sabotage have battered its oil industry.

On the Nymex Tuesday, gasoline futures fell less than a penny to settle at 86.6 cents a gallon. Heating oil fell 1.45 cents to settle at $1.327 a gallon while natural gas for January delivery jumped 44.3 cents to settle at $5.737 per 1,000 cubic feet.

In London, February Brent crude fell $1.09 to settle at $40.36 a barrel on the ICE Futures exchange.

____

Associated Press writers Martin Crutsinger, George Jahn and Alex Kennedy contributed to this report

source : news.yahoo.com

Nifty ends below 3K: Oil, CG, bank, metal tumble

The benchmark indices continued to reel under selling pressure for the second consecutive day and ended the day with sharp cut. Sell-off was seen across the board in today’s trade and even midcap and small cap stocks also followed the similar trend. There was some volatility at lower levels ahead of F&O expiry of December series.

Steep decline in Asian markets, due to slump in shares prices of energy companies, was another reason, which pushed the markets lower. Selling was mainly led by oil, banking, auto, capital goods, metal and technology stocks.

The Nifty had slipped below 3000 mark in early trade and remained below the same level for major part of the day. It has touched an intraday low of 2957.05, before closing the day at 2968.65, down 2.32% or 70.65 points from previous close. The Sensex shut shop with a loss of 241.60 points or 2.43% at 9,686.75, after hitting a low of 9,643.56.

Oil & gas stocks were the main laggards in today’s trade, especially oil exploration companies, as Crude fell to USD 39.2 a barrel on the NYMEX. BSE Oil & Gas Index fell 142.86 points or 2.29% to 6,106.34 (Also See : Top Losers). ONGC went down 3% and Reliance Industries down 1.92%. Oil marketing companies like BPCL was down 0.07 while IOC gained 1.18% and HPCL down 0.46%.

Realty index underperformed other indices, lost 4.84% or 122.26 points to 2,406.38. Unitech was down 7.54% and DLF fell 4.40%.

Banking was another sector, which helped this fall. Bankex tumbled 206.69 points or 3.76%, to settle at 5,285.09. ICICI Bank, PNB and HDFC Bank plummeted 4%. SBI fell 0.81%.

Selling was also seen in capital goods stocks like L&T lost 4.89% and BHEL went down 2.72%. Index fell 257 points or 3.61% to 6,868.03.

Jaiprakash Associates announced merger of Jaypee Hotels, JP Enterprises, JP Cement & Gujarat Anjan with self, the stock fell over 10%.

Metal Index was down 164.06 points or 3.07% at 5,188.42. Sterlite Industries, SAIL, Hindalco, JSL, Jindal Saw and Tata Steel lost 1.5-6%.

Auto stocks like Tata Motors, M&M, Bharat Forge and Maruti Suzuki fell 3-7%. Index ended with a loss of 62.69 points or 2.48% at 2,464.01.

IT Index plummeted 55.19 points or 2.36% at 2,279.55. HCL Tech, TCS and Wipro were down 1.5-6.4%. Infosys fell 0.41%.

Satyam plunged 13.55% and its volumes also increased a bit compared to 5-day average volumes. There was news that the World Bank has admitted to debarring Satyam for eight years due to data theft. The World Bank has said that Satyam was suspended in February from all businesses, the report added.

Pharma stocks like Dishman Pharma, Matrix Lab, Aurobindo Pharma, Ranbaxy Labs, Wockhardt, Sun Pharma, Dr Reddys Labs and Cipla lost 1.6-5%. BSE Healthcare Index slipped 56.26 points or 1.92% at 2,878.88.

Sell-off was also seen in power stocks; index fell 34.73 points or 1.88% at 1,814.99. Suzlon Energy, CESC, GVK Power, Torrent Power, Reliance Infrastructure, NTPC and Tata Power fell 1-5.8%.

Telecom stocks like Idea Cellular, Bharti Airtel, Tata Communication and Tata Teleservices tumbled 1-3%. However, Reliance Communication gained 1.24%.

FMCG Index was down 30.26 points or 1.47% at 2,028.27. United Spirits, Britannia, Tata Tea, United Breweries, HUL and ITC lost 1-8%.

Market breadth was weak due to negative broader indices; about 741 shares advanced while 1776 shares declined. Nearly 684 shares remained unchanged.

Among the broader indices, BSE Midcap Index lost 83.98 points or 2.58% at 3,175.81 and Small Cap Index fell 95.77 points or 2.56% at 3,639.18.

Among the midcap stocks, Motilal Oswal, Puravankara Projects, Binani Cement, GMDC and Tanla Solutions lost 9-10%.

Maytas Infra locked at 10% lower circuit for the fifth consecutive day. There were pending sell orders of 16,509 shares, with no buyers available.

In the small cap space, Spanco, Murli, Lloyd Electric, AP Paper Mills, Phoenix Lamps and Valecha Engg went down 9.5-14%.

Total traded turnover was at Rs 63,518.52 crore. This includes Rs 9,018.02 crore from NSE cash segment, Rs 51,132.48 crore from NSE F&O cash segment and the balance Rs 3,368.02 crore from BSE cash segment.

On the global front, Asian markets retreated for a third straight day after dollar appreciated. Shanghai tumbled 4.55%. Hang Seng, Kospi and Taiwan lost 2.75-3%. Straits Times fell 1.21%. Japan’s Nikkei was shut for a National holiday.

This fall was led by energy, auto & mining stocks. PetroChina, CNOOC and Sinopec fell 4-5%. China’s oil demand shrunk for first time in 3 years in November. Hyundai Motor fell 10% after Toyota predicted first operating loss in 71 years. Rio Tinto was down nearly 5% in Australia.

However, European markets were trading marginally higher. FTSE was up 39 points at 4,288. CAC rose 21 points to 3,171 and DAX up 16 points to 4,654, at 3:56 hours IST.

US futures were also mildly positive; Dow Jones was up by 34 points at 8,573 and Nasdaq up 1 point at 1,198.

UPDATE 1-OPEC may call extra talks if oil falls-Khelil

MOSCOW, Dec 23 (Reuters) – OPEC could decide in mid-January to hold an extraordinary meeting before March if it sees that global oil prices continue to slide because of weakening demand, OPEC’s President Chakib Khelil said on Tuesday.

Khelil said he expected OPEC members to fall in line quickly with the group’s latest round of production cuts and he rebuked Russia, calling on the world’s No. 2 exporter to stop merely benefiting from OPEC’s policies and contribute with output cuts of its own.

“We will review the market again and make a proper decision if we see that prices still continue sliding despite the compliance,” Khelil told Reuters in Moscow on the sidelines of a meeting of Gas Exporting Countries Forum (GECF).

Some OPEC ministers will attend an Arab economic summit scheduled for Jan. 19 in Kuwait which could be a forum for the group to look again at the oil market situation, Khelil said.

“By Jan. 12, if we see that prices are still going down, we will call the meeting and call non-Arab members like Venezuela, Angola and Ecuador to come to that meeting and make a decision when (to meet),” he said.

Last week, OPEC oil ministers agreed at a meeting in Algeria on their deepest output cut, of 2.2 million barrels per day, in a bid to balance supply with rapidly crumbling demand.

The move failed to impress the markets and the price of oil fell yet further to below $40.

“We have all opportunities to correct our decision. We are trying to catch up with the demand as best as we can estimate things. As long as the market doesn’t stabilise we will still keep running after catching up the demand,” he said.

Khelil said he expected the overall compliance of OPEC members to be good as otherwise prices could fall ever deeper.

“I think by February we should see at least (compliance of) 80 percent,” he said.

He said OPEC saw global demand falling by 200,000 bpd in the first quarter and by another 1.2 million bpd in the second quarter: “So I think all members are aware and I think there will be full compliance by March 15″.

OPEC repeatedly called on non-OPEC producers to join production cuts at its meeting in Oran, Algeria but only secured a pledge from Azerbaijan to commit 300,000 bpd. Russia refrained from making firm pledges despite saying previously that it could do so.

Khelil said OPEC was disappointed.

“Well, they (Russia at the meeting in Oran) proposed everything except for a reduction… And maybe the reaction of the market was negative because of that,” he said.

“But wait… If there were no OPEC reductions in September and October, I think we would have seen prices today at maybe $20 (per barrel). So it was because of OPEC that revenues for Russia were at $40 now not at $20…,” he said.

Oil prices higher in Asia

SINGAPORE: Oil prices rose in Asia on Wednesday as traders awaited an expected cut in output by the OPEC cartel desperate to stop a slide in prices, analysts said.

New York’s main futures contract, light sweet crude for January delivery, rose 59 cents to 44.19 dollars a barrel after dropping 91 cents to 43.60 at the close of trading Tuesday on the New York Mercantile Exchange.

Brent North Sea crude for February rose 82 cents to 47.47 dollars a barrel. The January Brent contract expired at the close of trading on Tuesday, down four cents at 44.56 in London.

source : jang.com.pk

Artificial shortage of oil will be investigated: Secretary

ISLAMABAD: Sufficient supplies of oil exist in the country, while the artificial shortage will be investigated.

In an exclusive talk with Geo News here, Ministry of Petroleum and Natural Resources (MP&NR) Secretary, G. A. Sabri told this. He said that the diesel stocks for 22 days and petrol stocks for 9 day exist in the country. He further said that Oil Companies Advisory Committee (OCAC) has already been given permission to import one lac tons of diesel. G. A. Sabri said that the government would retain reserves of petrol for at least 10 days from January 1.

Oil prices fall further

SINGAPORE: World oil prices fell further below 50 dollars on Friday at levels unseen in more than three years on growing fears that a worldwide recession could ravage energy demand, analysts said.

New York’s main futures contract, light sweet crude for January delivery, dropped 88 cents to 48.54 dollars a barrel.

The December contract plunged 4.00 dollars a barrel before ending at a closing price of 49.62 on the New York Mercantile Exchange Thursday, when it expired. The contract earlier hit an intraday low of 48.64, a level last seen in May 2005.

Brent North Sea crude also plunged through the psychological barrier of 50 dollars a barrel. On Friday the contract was 48 cents lower at 47.60 dollars a barrel. Brent settled down 3.64 dollars at 48.08 dollars in London on Thursday.

Oil refineries, distribution Cos’. profits decline

KARACHI: The profits of the oil refineries and distribution companies during the first quarter of the current fiscal year plummeted by 24 and 376 percent respectively.

According to the statistics available here, the profits of the oil refineries during July-September current fiscal year declining by 24 percent on annual basis stood at Rs18.60 billion, while the profit of the oil distribution companies as compared to the same period previous year plunging by 376 percent amounted to Rs8.79 billion.

Invest Capital analyst, Khurram Shahzad attributed oil sector plummeting profit mainly to the descending international market crude oil price and the depreciation of rupee against dollar. However, the profits of the oil and gas exploration companies during the same period increased annually by 55 percent.

Oil price slump below 53 dollars

LONDON: Oil prices sank under 53 dollars a barrel here on Wednesday, hitting the lowest level since January 2007, as traders worried about weaker demand for energy amid a gloomy economic outlook.

In afternoon London trade, Brent North Sea crude for delivery in December plunged to 52.88 dollars a barrel, a level last seen on January 22, 2007.

New York’s main contract, light sweet crude for December, dropped to 56.41 dollars a barrel, which was last witnessed on March 20, 2007.

Pirates hijack Nigeria oil ship, attack two others

LAGOS: Pirates in Nigeria attacked at least two oil vessels in the offshore waters of the Niger Delta on Saturday, briefly seizing a group of oil workers including seven French citizens, security sources said.

Gunmen early Saturday hijacked the vessel Bourbon Ajax in the oil-producing delta, also taking 10 Nigerians on board hostage, two private security sources said.

The boat and the captives were released a short time later. One security source said the boat was contracted by Canada’s Addax Petroleum.

A French embassy spokesman in Nigeria confirmed that the French workers were safe. A Nigerian military spokesman had no immediate comment.

Insecurity in the heart of Africa’s biggest oil and gas industry has shut down around a fifth of the OPEC member’s oil production since early 2006.

Security experts have said that Nigeria’s navy is ill-equipped to deal with militants and pirates, who use small fast-speed boats to navigate the delta’s narrow creeks, forcing oil firms to take their own additional security measures.

Addax’s CEO Jean Claude Gandur told Reuters last week that his firm had hired ex-U.S. military speed boats staffed by Nigerian navy personnel to protect its workers and oil facilities in the delta.

Foreign oil companies routinely hire private security contractors in southern Nigeria but are often cautious about explicit relationships with the military, whom militant and rights groups have in the past accused of human rights abuses.

Pirates also attacked a second oil vessel in the delta, but the ship managed to escape with only bullet holes to the hull, a security source said. The vessel is believed to be under contract with French oil major Total.

In a third incident, a security source said an unidentified vessel came under attack with pirates taking cellular phones, money and other valuables from the passengers on board.

Criminal gangs have taken advantage of the break down in law and order in the delta, funding themselves through a lucrative trade in stolen oil and frequently kidnapping expatriates, local businessmen and politicians for ransom.

Experts blame the delta’s insecurity and chronic federal funding shortfalls for the country’s inability to produce anywhere near its capacity of around 3 million barrels per day. Nigeria is currently pumping near 2 million bpd.

Dow Jones up 2%; oil rises to $73 a barrel

LONDON: Stocks rose around the globe on Monday as efforts to shore up banks inspired investors to buy beaten-down shares and energy shares surged as oil rose on expectations that OPEC may act this week to boost prices.

US Federal Reserve Chairman Ben Bernanke raised hopes for more spending to help the economy, helping push key Wall Street indexes up.

European and Japanese stocks vaulted more than 3% higher. The dollar extended gains versus the yen after Bernanke’s remarks. Underpinning the new-found relief, lending rates between banks — at the center of fears about the industry freezing up — fell significantly.

This suggested government efforts to provide support were finally bearing fruit. “This is unmitigated good news. However, the rates need to drop much further,” said T.J. Marta, fixed income strategist at RBC Capital Markets in New York.

London interbank offered rates, closely watched as a benchmark for the cost of financing throughout the private sector, fell for overnight dollars to a four-year low.

Perhaps more significantly, the three-month rate recorded its biggest drop since the Fed delivered an emergency interest rate cut last January.

A continued easing of financing for short-term loans for three months will take the pressure off companies, which have had to scramble for overnight cash as banks became reluctant to lend during the recent paralysis of credit markets. But unease over the economy continued to hang over some markets, and US government debt prices rose after Bernanke’s gloomy economic outlook spurred a safe-haven bid for Treasuries.

On Wall Street the Dow industrials and S&P 500 both rose more than 2%. Dow components Exxon Mobil and Chevron led the index higher after analysts at Oppenheimer & Co raised recommendations on the companies, as well as a raft of other energy companies. The Dow Jones industrial average was up 183.91 points, or 2.08%, at 9,036.13. The Standard & Poor’s 500 Index was up 21.78 points, or 2.32%, at 962.33.

The Nasdaq Composite Index was up 18.87 points, or 1.10%, at 1,730.16. The S&P energy index jumped 6.77%, with shares of both Exxon and Chevron rising over 6%. Shares of BlackBerry maker Research In Motion fell 8.9% on concerns about technology spending. In Europe, oil and bank shares drove gains. The FTSEurofirst index closed up 3.27%. Energy stocks were the top-weighted gainers on the FTSEurofirst 300, with BP and Royal Dutch Shell both soaring more than 10% and advancing 7.1% as crude prices rose.

Among banks, Royal Bank of Scotland added more than 23%, HSBC added 5.4% and Barclays put on more than 7%. European Central Bank President Jean-Claude Trichet added to the confidence-building over the weekend, pledging in a radio interview to do whatever it takes to restore confidence to financial markets. He said the ECB was working very closely with the US Federal Reserve to solve the financial crisis that has crippled equity markets for more than a year.

The benchmark 10-year US Treasury note was up 8/32, with the yield at 3.9029%. In Europe, benchmark bond futures were just a shade higher. Oil rose on expectations that OPEC may cut output this week to boost prices, which have fallen more than 50% in just three months from a record high above $147 a barrel. The president of OPEC, Chakib Khelil, said on Monday that non-OPEC producers like Russia, Norway and Mexico should contribute production cuts to help stabilize sagging prices. The gains in European and US stock markets also helped underpin crude. US light sweet crude oil rose $2.07 or 2.88%, to $73.92 per barrel.

Gold also gained on the back of bargain hunting as a 9% fall in prices last week and the recovery in oil prices helped boost buying. Spot gold prices rose $4.10, or 0.52%, to $785.80.

The dollar gained broadly, as reflected in its value against a basket of major currencies, which was up 0.87% at 83.185 from a previous session close of 82.466.

“This is more a story about flows. There is still some real money demand for dollars out there,” said Alan Ruskin, chief international strategist at RBS Global Banking in Greenwich, Connecticut.

Security clearance given for oil, gas exploration in Balochistan

QUETTA: Balochistan government has given security clearance for 15 blocks of the province for the exploration of oil and gas while the new petroleum policy envisages more facilities to the exploration companies.

According to sources, the exploration activities remained suspended in the above blocks due to security concerns. However, exploration work will now be resumed soon in these blocks as the Balochistan government has declared the law and order situation satisfactory and also given a security clearance in this regard.

Under the new petroleum policy more and more companies will be provided opportunities to undertake exploration activities so that the growing energy needs could be met by utilizing domestic resources.

The process of granting exploration license will be simplified besides giving other incentives to the companies.

Oil falls back under 90 dollars

SINGAPORE: World oil prices fell back under 90 dollars on Wednesday as traders fretted over the global financial crisis and the resultant fall in energy demand, dealers said.

New York’s main contract, light sweet crude for delivery in November, was down 40 cents at 89.66 dollars a barrel after climbing 2.25 dollars to 90.06 at the close of trading on the New York Mercantile Exchange on Tuesday.

Brent North Sea crude for November eased 26 cents to 84.40 dollars after rising 98 cents to 84.66 Tuesday in London.