Saudi extends oil production cut as Russia reduces exports

RIYADH, Saudi Arabia - Saudi Arabia said on Monday it was extending a voluntary oil production cut of one million barrels per day, and Russia said it was slashing exports by 500,000 bpd.

The moves were the latest attempts by major producers to stabilize markets rocked by factors including continued fallout from the Russian invasion of Ukraine and China's faltering economic recovery.

The cut by Saudi Arabia, the world's biggest crude exporter, was first announced after a June meeting of oil producers and took effect at the weekend.

Saudi Energy Minister Prince Abdulaziz bin Salman noted at the time that it was "extendable".

In a report on Monday announcing that the cut would continue through August, the official Saudi Press Agency said it "can be extended" further, citing an energy ministry source.

"The source confirmed that this additional voluntary cut comes to reinforce the precautionary efforts made by OPEC+ countries with the aim of supporting the stability and balance of oil markets," SPA said.

Monday's extension announcement leaves the kingdom's production at approximately nine million bpd.

Also on Monday, Russia unveiled its export cut of 500,000 bpd for August "as part of efforts to ensure that the oil market remains balanced".

The announcement by Alexander Novak, Russian deputy prime minister responsible for energy policy, came on the back of cuts to Russian oil production this year by the same volume as part of Moscow's response to Western sanctions levied over the conflict in Ukraine.

Since the beginning of large-scale hostilities in Ukraine last February, Moscow has pivoted energy exports from Europe to India and China.

The initial market reaction to Monday's announcements by Riyadh and Moscow was muted.

Brent was up 0.98 percent to $76.15 per barrel, and West Texas Intermediate was up 1.02 percent to $71.36 per barrel.

Recent efforts by OPEC+ to bolster prices by reducing output have not succeeded.

In April, several OPEC+ members opted to slash production voluntarily by more than one million bpd -- a surprise move that briefly raised prices but failed to bring about lasting recovery.

Brent is down 11 percent since the beginning of the year and WTI is down 7 percent, as a sluggish recovery in China and worries about the US economy weigh on demand forecasts.

Saudi Arabia is counting on high oil prices to fund an ambitious reform agenda that could shift its economy away from fossil fuels.

Oil giant Saudi Aramco, the jewel of the kingdom's economy, said it recorded profits totaling $161.1 billion last year, allowing Riyadh to notch up its first annual budget surplus in nearly a decade.

Analysts say the kingdom needs oil to be priced at $80 per barrel to balance its budget, which is well above recent averages.

Agence France-Presse

Russia sanctions ripple across world markets, rouble tanks

LONDON - World stocks slid, oil prices jumped and the rouble tanked to fresh record lows on Monday, as the West ramped up sanctions against Russia for its attack on Ukraine that included blocking banks from the SWIFT global payments system.

Russia's central bank raised its key interest rate to 20 percent from 9.5 percent in an emergency move, and authorities told export-focused companies to be ready to sell foreign currency as the rouble slid almost 30 percent to record lows versus the dollar. 

As an economic crisis loomed in Russia, the fallout of tougher sanctions from the West imposed over the weekend rippled out across financial markets.

European stocks slumped 2 percent. European banks most exposed to Russia, including Austria's Raiffeisen Bank, UniCredit and Societe Generale, dropped between 9 and 15 percent, while the wider euro zone banking index fell 7 percent.

US stock futures were deep in negative territory, although MSCI's broad gauge of Asia shares and Japan's Nikkei eked out small gains.

"The trading environment is highly dynamic, and we maintain a defensive stance as things could get a lot worse from here," said Peter Garnry, head of equity strategy at Saxo Bank.

Oil prices meanwhile surged after Russian President Vladimir Putin put nuclear-armed forces on high alert on Sunday, the fourth day of the biggest assault on a European state since World War Two. 

The ramp-up in tensions heightened fears that oil supplies from the world's second-largest producer could be disrupted, sending Brent crude futures up 5 percent to $102.86. US. West Texas Intermediate crude futures were up $4.62 or almost 5.0 percent at $96.24 a barrel.

"I am telling clients all we know for certain is that energy prices are going to be higher, and there are going to be some beneficiaries," said John Milroy, Ord Minnett financial advisor in Sydney.

"It's an old cliché, but it's true that uncertainty drives moves in both directions." 

SAFE-HAVENS SHINE

As uncertainty continued to grip markets, investors plumped for the safety of the dollar, Swiss franc and Japanese yen.

The euro slid 1 percent to $1.1168 and 0.9 percent to 129.08 yen, while the risk-sensitive Australian and New Zealand dollars fell 0.5 percent and 0.3 percent, respectively.

Sovereign bonds such as the US. Treasuries and German Bunds -- regarded as among the most safest assets to hold globally -- remained in strong demand.

The 10-year US. Treasury yield was down around 7 basis points to 1.90 percent in London trade, and equivalent German yields were down 6 basis points to 0.16 percent.

Money markets continued to push back rate hike expectations with investors now pricing roughly 30 basis points worth of tightening from the European Central Bank in total this year, down from 35 bps late last week. 

Gold was last up 0.61 percent to around $1,899.

Russia's rouble dived almost 30 percent to a record-low 120 per dollar, but recovered some ground to last trade at just over 100 to the dollar.

MSCI's Russia equity index slid 25 percent, while London and Frankfurt-listed Russian equity exchange traded funds (ETFs) tanked more than 35 percent as investors dumped Russian assets.

(Reporting by Dhara Ranasinghe; Additional reporting by Kevin Buckland in TOKYO; editing by Jason Neely)

-reuters

Saudi Aramco Q3 profits soar 158 percent on higher oil prices

RIYADH - Saudi Aramco's earnings rose 158 percent year-on-year in the third quarter on higher oil prices and volumes sold as the global economy recovered, it said on Sunday.

Aramco's net income was $30.4 billion in the third quarter, up from $11.8 billion in Q3 last year, with free cash flow more than doubling to $28.7 billion. Shareholders will receive $18.8 billion in dividends.

"The increase in net income was primarily the result of higher crude oil prices and volumes sold," the Saudi oil giant said in its earnings statement.

It also cited "stronger refining and chemicals margins in Q3, which were underpinned by rebounding global energy demand and increased economic activity in key markets".

The latest rise comes after profits nearly quadrupled in Q2 as the world economy bounced back from the Covid crisis, lifting demand and pushing oil prices back above $80 a barrel.

"Some headwinds still exist for the global economy, partly due to supply chain bottlenecks, but we are optimistic that energy demand will remain healthy for the foreseeable future," Aramco chief executive Amin Nasser said.

Agence France Presse 

Oil up as Kuwait revives hope for output freeze deal

SINGAPORE, Singapore—Oil prices climbed in Asia Wednesday after Kuwait said an agreement to freeze output during a producers’ meeting this month could still be reached despite conflicting statements by participants.

But analysts said the rebound would not likely last owing to a painful supply glut and weak demand caused by the slowing world economy.

At around 0430 GMT Wednesday, US benchmark West Texas Intermediate for delivery in May was up 97 cents, or 2.70 percent, at $36.86 and Brent crude for June was 68 cents, or 1.80 percent, higher at $38.55.

Both contracts eked out an increase on Tuesday, but prices are still well below the $40 level reached last month following a rally driven by hopes of an agreement during the April 17 producers’ meeting in Doha.

Prices dived after Saudi deputy crown prince Mohammed bin Salman said last week his country will only agree to limit output if rival producers such as Iran followed suit.

But Iran, which has been raising production since the West lifted nuclear-linked sanctions in January, has insisted it should not be the one to cut back.

Key OPEC member Kuwait, however, said a freeze deal can still be reached without Tehran, Bloomberg News reported.

It quoted Kuwait’s OPEC governor Nawal al-Fezaia as saying that major producers have no option but to reach an agreement and that a freeze could set a floor price.

Ric Spooner, chief market analyst at CMC Markets in Sydney, said traders are likely to wait for the results of the meeting before making big bets.

“Given the welter of statements… people are probably just going to ignore (the comments) until they get the results of the meeting,” Spooner told AFP by telephone.

Comments by International Monetary Fund chief Christine Lagarde that global economic recovery is still “too slow” and “too fragile” further added to the gloom in the saturated oil market as it is bad news for demand, analysts said.

source: business.inquirer.net

Cheap oil, good for consumers, is slamming stocks. Why?

NEW YORK — Wall Street is drowning in oil.

Stocks are having their worst start to a year in history in part because of a rapid plunge in the price of oil. The price of crude is down 28 percent this year already, which in turn has dragged down energy company shares in the Standard & Poor’s 500 index by 13 percent, which has helped pull the overall index down 9 percent.

This even though low oil prices — and the cheap prices for gasoline and other fuels that result — are wonderful for consumers and many companies.

“It seems ironic that in the run-up to the global financial crisis we were worried about oil prices being too high in 2007 and 2008. Now we’re worried about them being too low,” said Julian Jessop, head of commodities research with London-based researchers Capital Economics Ltd.

The drastic drop in oil and stock prices stands in contrast with a US economy that, on the whole, is doing pretty well. US employers created 292,000 jobs in December, and few economists see the economy sliding into recession.

Here’s what experts think is going on.

Why is oil so low?

Because there is so much of it.

A long run of high oil prices inspired drillers to develop new techniques and to go to new places to find more oil, and they succeeded. In the US improved oil drilling technologies known generally as fracking have added more oil to the global market than the total production of any other nation in OPEC other than Saudi Arabia.

Producers in the US and abroad haven’t cut back production very much, despite the low prices, and now the lifting of international sanctions against Iran could send more oil flowing into markets that are already awash in crude.

US stockpiles are at their highest level in at least 80 years, and the International Energy Agency predicts that during the first half of this year global oil supply could outstrip demand by 1.5 million barrels per day.

Demand for crude has been growing steadily, but that may not last because economic growth in China, the world’s second-largest oil consumer after the US, is slowing.

Why do low oil prices hurt the stock market?

Oil company profits are plummeting, so oil company shares are plummeting, and that is dragging down the whole market.

Analysts estimate that profit for all S&P 500 companies in total are on track to be down a recession-like 5.8 percent for 2015. But if energy companies were removed from that figure, S&P 500 profits would be up a very healthy 5.7 percent for the full year.

That profit drop directly leads to lower share prices that drag down entire indexes. Two of the biggest oil companies in the world, Exxon and Chevron, are part of the 30-member Dow Jones industrial average. Of the 20 biggest share price losers in the S&P 500 this year, 13 are energy companies.

Investors are also selling shares of companies that may have exposure to the oil industry, like certain banks. And the price of oil has now fallen so low that investors are also worried that it could mean global economic growth is much weaker than expected, which could hurt all companies.

Aren’t lower oil prices a good thing for the economy?

It depends on why prices are lower.

If they fall because new supplies have been found, it usually helps the broader economy, and markets held up fairly well during oil’s big slide from over $100 a barrel in 2014 to under $50 a barrel last year.

“In the long run, lower oil prices should be positive or at worst neutral for the world economy because all they’re really doing is transferring income from oil producers to oil consumers,” Jessop says.

But this latest plunge in prices to under $30 a barrel has investors worried that oil prices are falling because global growth is slowing, as businesses and consumers in many developing countries, particularly China, cut back on spending. Bruce Kasman, chief economist at JPMorgan Chase, says that steep drops in oil prices have historically been a sign of a weakening global economy.

Also, US consumers have remained cautious about spending the money they aren’t putting into their gas tanks, which limits the benefit to the broader economy. Americans saved 5.5 percent of their incomes in November, up nearly a full percentage point from a year earlier.

Kasman estimates that US spending grew at a tepid pace of just 1.5 percent in the final three months of last year. “There’s no doubt that the consumer spending growth figures for the US, Europe and Japan have disappointed,” he said.

Some of that likely reflected a temporary drag from warm weather, as Americans spent less on winter clothing and utilities. That could turn around in the first quarter, giving the economy a lift, Kasman said.

Delta Air Lines told investors this week that bookings for this spring are ahead of last year’s pace because cheaper gasoline means consumers have more money.

Could this lead to broader turmoil, the way the subprime mortgage crisis did?

It is already having some ripple effects, but the energy market isn’t nearly as big or far-reaching as the housing market.

When oil prices were high, lots of banks, including some of the biggest on Wall Street, made loans to energy companies to finance drilling in North Dakota, Texas and elsewhere. Dealogic estimates that the oil and gas industry has roughly $500 billion in outstanding debt. According to the Federal Reserve, there is $11 trillion in outstanding residential mortgage debt.

Still, some are feeling it. Oil company cash flow is slowing, and companies are finding it harder to repay their loans. Oil and gas company bankruptcies are rising, and the entire market for so-called junk bonds has been shaken as a result of energy company defaults.

JPMorgan Chase, Wells Fargo, Citigroup and Bank of America all had to write down the value of energy loans or set aside more money to cover losses. BofA executives told investors this week that energy loans were roughly 2 percent of its total loans. Smaller regional banks could to be more exposed relatively than the big Wall Street banks.

Is there an oil price that would be good for the market and consumers?

Jessop thinks that a price of about $60 a barrel would do the trick. “High enough to keep the main producers in business but low enough to provide a real boost to the incomes of consumers,” he says. He expects prices to return to that level by the end of next year as oil companies pare back exploration and the glut is worked off.

source: business.inquirer.net

Global stocks hammered as oil prices push further below $30

NEW YORK, United States—Stock markets around the world fell heavily Friday as investors reacted to new 12-year lows for oil prices and a big drop in Chinese equities.

A 3.6 percent drop in the Shanghai index pushed the Chinese market into an official bear market—defined as a 20 percent fall from a recent high—and sparked a wave of selling that extended from Frankfurt to Moscow to New York.

“Pervasive gloom,” read the title of a Barclays note.

Barclays slashed its forecast for oil prices due to a “worsening” macro outlook and predicted further European Central Bank stimulus in light of deflationary worries. On the positive side, the “pessimism about US growth is overdone in light of solid labor market momentum,” Barclays added.

“The markets are trapped in a vicious circle,” said Alexandre Baradez, an analyst at IG France.

“The session started off poorly with China, which set things off, leading to oil prices falling, then European markets and Wall Street dropping.”

Frankfurt fell 2.4 percent, Paris 2.3 percent and London 1.9 percent. The Dow in the US ended 2.4 percent lower after dropping more than 3.0 percent earlier in the session.

The leading Moscow index dropped 5.8 percent, while Brazil’s Ibovespa index lost 2.4 percent.

Global recession?

The widespread market losses over the start of 2016 has sparked talk of the potential for a global recession.

David Levy, portfolio manager at Kenjol Capital Management, said such a downturn would likely be less severe than in 2008 because fewer assets are overvalued.

“Even if we are in a global recession, I don’t think the damage will be nearly as significant as a 2008-type event,” Levy said.

“But certainly the evidence is giving us a higher probability of recession in 2016 and certainly the market is speaking that it believes that is a possibility.”

US oil benchmark West Texas Intermediate finished at $29.13 a barrel, taking the losses since the beginning of the year to more than 21 percent.

Industrial metals, including copper, also fell, but safe-haven gold gained.

“Investors are shifting funds into areas of perceived safety including gold and government bonds in hopes of protecting themselves,” said Jasper Lawler at CMC Markets UK.

Automakers skid lower
European auto stocks tumbled again, with Renault shedding an additional 3.4 percent after unions reported Thursday that anti-fraud investigators had raided several of the company’s sites.

Renault ended 10.3 percent lower on Thursday on the news, which raised fears of a Volkswagen-type scandal.

Shares in Peugeot, France’s biggest automaker ahead of Renault, fell 2.6 percent in Paris while Renault alliance partner Nissan’s stock closed 1.9 percent lower in Tokyo.

Daimler shares lost 1.9 percent, BMW 2.6 percent and Volkswagen 3.5 percent.

In the US, investors hammered banking shares after Citigroup set aside $250 million in reserves for its energy portfolio and warned of a deeper hit if oil prices fall further.

Citigroup tumbled 6.4 percent, while Wells Fargo, which also reported a higher hit from oil, lost 3.6 percent.

Petroleum and technology were two other weak sectors, while Disney tumbled 5.3 percent following a downgrade by Barclays due to worries about sports network ESPN’s prospects.

Key figures around 2200 GMT

New York – Dow: DOWN 2.4 percent at 15,988.08 (close)

New York – S&P 500: DOWN 2.2 percent at 1,880.29 (close)

New York – Nasdaq Composite: DOWN 3.1 percent at 4,488.42 (close)

London – FTSE 100: DOWN 1.9 percent at 5,804.10 points (close)

Frankfurt – DAX 30: DOWN 2.5 percent at 9, (close)

Paris – CAC 40: DOWN 2.4 percent at 4,210.16 (close)

EURO STOXX 50: DOWN 2.4 percent at 2,952.48 (close)

Tokyo – Nikkei 225: DOWN 0.5 percent at 17,147.11 (close)

Shanghai – Composite: DOWN 3.6 percent at 2,900.97 (close)

Euro/dollar: UP at $1.0916 from $1.0865 Thursday

Dollar/yen: DOWN at 116.96 yen from 118.06 yen

source: business.inquirer.net

Oil stays below $40 after OPEC decides against output cut

SINGAPORE, Singapore — Oil stayed below $40 a barrel in Asia Monday after the OPEC cartel decided against slashing high output levels and traders turned their focus to a US central bank meeting next week.

US benchmark West Texas Intermediate for delivery in January was down 37 cents at $39.60 and Brent crude for January was trading 12 cents lower at $42.88 a barrel at around 0210 GMT.

At a meeting in Vienna on Friday, the Organization of the Petroleum Exporting Countries (OPEC) decided against cutting its oil output to lift prices, its president and Nigerian oil minister Emmanuel Ibe Kachikwu said.

OPEC, whose members together pump out more than one third of world oil, is currently producing above its official target of 30 million barrels per day despite a global crude supply glut that has battered prices for more than a year.

“Crude oil were no doubt compressed by the lack of an agreement at the OPEC, signaling that the supply glut will persist longer,” Bernard Aw, market strategist at IG Markets in Singapore.

“WTI is trading below the key $40 (mark) and it looks set to remain there.”

Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at professional services firm EY, said market attention is now turned to a meeting of Federal Reserve policymakers and to the latest economic data from China, the world’s top energy consumer.

Traders are watching whether the Fed will raise interest rates, a move that will boost the dollar. A stronger US currency will make dollar-priced oil more expensive to holders of weaker units, denting demand and prices.

“While all eyes are now on the Federal Reserve as it meets next week for the last policy meeting this year to decide whether to raise its benchmark rate, economic data from China will set the tone of prices in the coming weeks,” Gupta said.

He said the dollar also got a boost from a strong US jobs report on Friday. The report strengthens the case for a Fed rate hike, analysts said.

source: business.inquirer.net

Oil slips again after IMF cuts global growth forecast

NEW YORK, United States – Crude oil prices slumped Tuesday after the International Monetary Fund (IMF) slashed its world economic growth forecast, stoking fresh fears about the strength of crude demand.

US benchmark West Texas Intermediate (WTI) for February sank $2.30, or 4.7 percent, to $46.39 a barrel, not far from its lowest level since March 2009.

Brent North Sea crude for delivery in March, the international benchmark, dropped to $47.99 a barrel in London, down 85 cents from Monday’s closing level.

“Crude oil prices remain under heavy pressure with WTI front-month futures retreating… following news that the IMF cut its global growth forecast by (the) most in three years,” said Sucden analyst Myrto Sokou.

The IMF reduced its global economic growth forecast for this year to 3.5 percent and 3.7 percent in 2017 on the back of weaker momentum in nearly all major economies except the United States.

Both estimates were 0.3 percentage point lower than in its October forecast.

Moody’s meanwhile lowered its 2015 average price estimates to $55 a barrel for Brent and $52 for WTI. It projected both contracts would rise in 2016, to $65 and  $62, respectively.

“We see no near-term catalysts that would change the supply/demand equation,” credit ratings firm Moody’s said in a market note.

source: business.inquirer.net

US stocks drop as oil hits new multi-year low

NEW YORK–US stocks on Monday opened a busy week of corporate earnings sharply lower as oil prices slumped to fresh multi-year lows.

The Dow Jones Industrial Average dropped 96.53 points (0.54 percent) to 17,640.84.

The broad-based S&P 500 sank 16.55 (0.81 percent) to 2,028.26, while the tech-rich Nasdaq Composite Index tumbled 39.36 (0.84 percent) to 4,664.71.

European benchmark Brent oil closed below $50 a barrel for the first time since April 2009 following a gloomy petroleum-market forecast from Goldman Sachs.

Energy equities fell sharply, including Dow member Chevron and Marathon Oil, by 2.2 percent and 5.1 percent, respectively.

“The market is nervous about lower energy prices and whether they are forecasting a slowdown in global economic growth, and not just a supply-demand imbalance,” said Sam Stovall, chief investment strategist at S&P Capital IQ.

NPS Pharmaceuticals bolted 8.2 percent higher after announcing plans to be bought by Ireland-based Shire for $5.2 billion.

Animal-health company MWI Veterinary Supply gained 8.2 percent on news it will be acquired by pharmaceutical distributor AmerisourceBergen for $2.5 billion. AmerisourceBergen lost 2.2 percent.

Drugmaker Bristol-Myers Squibb advanced 3.1 percent on news that a study for its Opdivo lung cancer drug was stopped because an independent panel found that the medicine succeeded in improving survival rates in patients.

Biotech company Celgene tacked on 2.9 percent as it projected 2015 sales of $9-$9.5 billion, a 22 percent increase from last year.

Jewelry chain Tiffany slumped 14.0 percent as it said sales during the key holiday period fell one percent from last year, with an especially weak performance in Japan. Chief Michael Kowalski characterized the results as “disappointing overall.”

SanDisk, which manufacturers data storage products in consumer electronics, lost 13.9 percent after announcing that it expects fourth-quarter sales of $1.73 billion, down from a previous forecast for $1.80-$1.85 billion.

Bond prices rose. The yield on the 10-year US Treasury fell to 1.91 percent from 1.96 percent Friday, while the 30-year declined to 2.49 percent from 2.54 percent. Bond prices and yields move inversely.

source: business.inquirer.net

Oil goes below $48 as Saudis defend stance

NEW YORK, United States – Oil prices tumbled Tuesday to fresh 5.5-year lows as Saudi Arabia blamed weak global economic growth and said it would stick to its guns on production policy.

US benchmark West Texas Intermediate for delivery in February sank $2.11 to $47.93 a barrel, a low last witnessed in late April 2009.

Brent North Sea crude for delivery in February dived $2.01 to $51.10 per barrel, the lowest level since early May 2009.

“The market is still worried that there are no signs that the supply glut will start falling,” Nordea Markets analyst Thina Margrethe Saltvedt told AFP.

James Williams of WTRG said the weakness in the market could take prices below $40 a barrel.

“Basically, there are continuing concerns about OPEC not cutting back, particularly Saudi Arabia, and US production continuing to grow,” he said.

Saudi Arabia’s Crown Prince Salman, in a speech on behalf of ailing King Abdullah Tuesday, said weak growth was to blame for the price fall, which has sliced deeply into the income of the world’s largest exporter.

“This development is not new in the oil market, and the kingdom has in the past dealt with it firmly and wisely,” he said, adding that Saudi Arabia will maintain its “same approach” towards the market.

That appeared to confirm Riyadh’s determination to defend its market share rather than reduce output, even if that pushes prices lower.

On Monday Saudi Arabia reportedly cut its European and US export prices in order to maintain market share.

source: business.inquirer.net

Oil prices fall amid weak China, German trade data

SINGAPORE – Oil prices fell in Asia Wednesday as dealers await the latest US supply report for clues about production levels, while weak Chinese and German trade data also weighed, analysts said.

US benchmark West Texas Intermediate for January delivery slipped 90 cents to $62.92 while Brent crude for January was down $1.01 at $65.83 in mid-morning trade.

“With the global supply glut, the main concern at the moment is the level of production in the US,” Daniel Ang, investment analyst at Phillip Futures in Singapore, told AFP.

“The US stockpiles report will be in focus to see if there is any change in production growth,” he said.

Analysts surveyed by the Wall Street Journal said they expected domestic inventories to have fallen by 2.7 million barrels in the week to December 5.

The American Petroleum Institute, an industry group, in its own survey however said stockpiles likely rose 4.4 million barrels.

It said refinery operations likely increased 1.6 percentage points to 94.6 percent of capacity.

The Department of Energy will release the official stockpiles report later Wednesday.

The department on Tuesday modestly reduced its 2015 US oil production forecast to 9.3 million barrels per day from the previous 9.4 million estimate.

Ang said German and Chinese trade data this week “have shown signs of dropping global demand and put pressure on oil prices”.

German exports slipped 0.5 percent month on month in October, while imports fell 3.1 percent. That came a day after China said exports grew just 4.7 percent year-on-year in November and imports dropped 6.7 percent.

Trade figures out of Germany and China, both major manufacturing giants, are closely watched for their impact on crude prices, especially the more internationally leveraged Brent contract.

source: business.inquirer.net

US stocks dip as oil pushes energy sector lower

NEW YORK—A slump in energy prices pushed the stock market back from record levels on Tuesday.

Energy stocks slid as the price of oil resumed its descent. Traders speculated that member nations of the oil-producing group OPEC would fail to agree on production cuts at an upcoming meeting in Vienna on Thursday. Oil has now dropped almost a third from a peak in June.

While lower oil prices are a long-term boon to consumers and industrial companies, they are a drag on stocks in the near term because energy companies account for about 10 percent of the overall market’s profits.

Despite the losses, the major indexes remain close to all-time highs.

Stocks have been drifting gradually higher this month, having rebounded sharply from a slump in October, as investors have grown more confident that actions from central banks around the world will help bolster the global economy. The gains are likely to continue for now, said Jim McDonald, chief investment strategist at Northern Trust.

“People’s sentiment is still pretty conservative,” McDonald said. “That means that the slow-and-steady market can continue longer than people anticipate.”

The Standard & Poor’s 500 index fell 2.38 points, or less than 0.1 percent, to 2,067.03. The Dow Jones industrial average dropped 2.96 points, or less than 0.1 percent, to 17,814.94. The Nasdaq composite gained 3.36 points, or 0.1 percent, to 4,758.25.

Stocks started the day with small gains after a report showed that the US economy grew at a solid 3.9 percent annual rate in the July-September period, faster than the 3.5 percent that was initially reported. The upward revision was due to higher estimates of spending by consumers and businesses, the Commerce Department said.

That positive report was tempered by news that US consumer confidence fell in November. The Conference Board says its consumer confidence index fell to 88.7, down from a seven-year high of 94.5 in October. The decline primarily reflected less optimism in the short-term outlook as consumers expressed less confidence in current business conditions.

Among individual stocks, Pall, a company that makes filters for the food and health care industries, was the leading gainer in the S&P 500. The company’s stock jumped $3.31, or 3.5 percent, to $98 after its earnings beat the expectations of Wall Street analysts.

Energy stocks slid along with oil prices following reports that the world’s biggest producers are unwilling to cut production to help stop a slump in the price of crude. The sector dropped 1.6 percent and is now down 3.2 percent for the year. It’s the only one of the 10 industry sectors in the S&P 500 that is down for the year.

Representatives from Venezuela, Saudi Arabia, Mexico and Russian state oil giant OAO Rosneft met Tuesday ahead of a meeting of the Organization of the Petroleum Exporting Countries in Vienna and didn’t announce any immediate plans to cut output, The Wall Street Journal reported.

Benchmark US crude fell $1.69 to close at $74.09 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many US refineries, fell $1.35 to close at $78.33 a barrel on the ICE Futures exchange in London.

In metals trading, the price of gold rose $1.40 to $1,197.10 an ounce. Silver rose 18 cents to $16.55 an ounce and copper fell four cents to $2.96 a pound.

US government bond prices rose. The yield on the 10-year Treasury note fell to 2.26 percent from 2.31 percent Monday. The dollar fell to 117.94 yen from 118.28 yen late Monday. The euro rose to $1.2472.

In other energy futures trading on the NYMEX:

— Wholesale gasoline fell 0.1 cent to close at $2.032 a gallon

— Heating oil fell 0.1 cent to close at $2.395 a gallon.

— Natural gas rose 13.1 cents to close at $4.282 per 1,000 cubic feet– Steve Rothwell

source: business.inquirer.net

Oil prices climb in Asian trade

SINGAPORE – Oil prices rose in Asian trade Monday as robust US jobs data boosted hopes for stronger energy demand in the world’s biggest economy.

New York’s main contract, West Texas Intermediate (WTI) for January delivery, was up 23 cents at $97.88 a barrel in mid-morning trade, while Brent North Sea crude for January rose 13 cents to $111.74.

Singapore’s United Overseas Bank said in a research note that prices were supported “by the outlook for increased demand after strong jobs data from the US, the world’s top oil consumer.”

The US government reported last week that the unemployment rate fell sharply to 7.0 percent in November from 7.3 percent in October.

The data, which pointed to further strength in the US economy, also saw a better-than-expected surge of 203,000 jobs generated.

As the world’s largest oil consuming nation, the health of the American economy has a major influence on the crude oil market.

source: business.inquirer.net

Oil prices drop after Iran nuclear deal

BANGKOK – Oil prices sank Monday as a nuclear deal between Iran and six world powers made it more likely that the sanctions choking Iranian oil exports will eventually be lifted.

Brent crude, a benchmark for international oils, was down $2.43 at $108.62 a barrel at midmorning Bangkok time in electronic trading on the ICE futures exchange in London.

Benchmark U.S. crude fell 85 cents to $93.99 on the New York Mercantile Exchange.


After marathon negotiations in Geneva, Iran on Sunday reached an agreement with the U.S., Britain, France, Russia, China and Germany to limit enrichment of uranium to 5 percent, far below the level needed for nuclear weapons.

Iran got limited relief from sanctions that have hobbled its economy, but an embargo on its oil exports remains in place while negotiations continue for a more enduring deal to ensure the country only uses nuclear technology for peaceful purposes such as power generation.

If Iranian oil returns to international markets, the additional supply is likely to make crude less expensive.

Benchmark U.S. crude is down from about $110 in October because of ample supplies and muted demand.

In other energy futures trading on Nymex:

— Wholesale gasoline dropped 4.6 cents to $2.665 gallon.

— Heating oil shed 4.8 cents to $2.991 a gallon.

— Natural gas added 7.7 cents to $3.845 per 1,000 cubic feet.

source: business.inquirer.net

Oil firms seen to hike fuel prices by 50¢

MANILA, Philippines—Domestic oil prices are going up again following weeks of softness as global output appears steady despite surging demand from growing economies such as China—leading to concerns of an oil supply squeeze.

Beginning Tuesday morning, oil firms are expected to hike fuel prices by an average of 50 centavos per liter, industry sources said.

The estimated price increases will range from 45 to 55 centavos per liter for diesel and from 25 to 55 centavos for gasoline.

Excluding expected adjustments this week, the year-to-date net increase for gasoline and diesel stand at 69 centavos per liter and P2.23 per liter, respectively.

But as of Monday afternoon, oil firms had yet to make official announcements on a price increase.

Amid the market buzz, transport groups have expressed concern over the price hikes this week.

In a statement, the militant transport group Piston said oil prices should remain low due to expected weakness in US demand as a budget standstill has prompted the world’s largest economy to suspend non-essential government services.

The Department of Energy’s Oil Monitor noted that supply concerns had eased over diplomatic developments in oil-producing Iran and the ongoing US government shutdown, which began on Oct. 1.

But China thirsts for more oil. Increasingly consumer-driven economic growth in the world’s No. 2 economy had it overtaking the United States as the largest oil buyer in the international market. As China’s industries and motorists demand more fuel for power and for transport, global supplies are in for a squeeze, according to analysts.

source: business.inquirer.net

Oil prices mixed in Asian trade

SINGAPORE—Oil prices were mixed in Asian trade Wednesday after climbing in New York as concerns over a US-led military strike on Syria returned.

New York’s main contract, West Texas Intermediate for delivery in October, eased 26 cents to $108.28 in mid-morning trade, while Brent North Sea crude for October gained 12 cents to $115.80.

Market jitters over Syria resurfaced after Republican House Speaker John Boehner and his right hand man Eric Cantor said they would support a strike against the Assad regime over its alleged use of chemical weapons.

The move was a rare gesture of unity in a divided Congress and left US President Barack Obama hopeful of securing a vote for action from lawmakers next week.

Investors fear US intervention could lead to a wider conflict in the politically volatile Middle East, a key source of the world’s crude oil supplies.

Oil prices have tumbled from multi-month highs after Obama said he would seek approval from Congress for military action. They had soared on speculation of imminent US strikes.

source: business.inquirer.net

Oil down as Obama seeks Congress approval on Syria

SINGAPORE – Oil prices fell in Asian trade Monday after US President Barack Obama’s announcement that he would seek approval from lawmakers for military action against Syria eased prospects of an imminent strike, analysts said.

New York’s main contract, West Texas Intermediate for delivery in October, was down $1.47 to $106.18 a barrel in mid-morning trade, while Brent North Sea crude for October fell $1.15 to $112.86.

US markets will be closed Monday for the Labor Day federal holiday.

“Investors are sitting back for now after President Obama’s decision to take the decision on a Syrian intervention to US lawmakers,” Desmond Chua, market analyst at CMC Markets in Singapore, told AFP.

After the announcement on Saturday, Obama launched an intense lobbying effort to sway sceptical lawmakers as they weigh whether to support military action against Syria for its alleged chemical weapon use, an official said Sunday.

Although Syria is not a major oil producer, traders are nervous about a broader conflict in the crude-rich Middle East region, including neighbouring Iraq, which is becoming a major exporter.

Obama’s surprise decision to hand the issue to the Congress effectively pushes military action back until at least September 9, when US lawmakers return from their summer recess.

It remains to be seen if a war-weary Congress will endorse Obama’s push for action.

Secretary of State John Kerry said Sunday that Washington has proof the Syrian regime used sarin gas in a deadly August 21 strike on a Damascus suburb.

Hair and blood samples given to the US by emergency workers who rushed to the scene of the attack showed signs of the powerful sarin nerve gas, he said.

Chua said all eyes will be on President Obama at a G20 summit in Russia later this week, where Syria is likely to top the agenda.

“There will be keen attention among investors on discussions about Syria at the G20 summit as well as the outcome of any direct meeting between President Obama and Russian President Putin,” he said.

source: business.inquirer.net

Survey: U.S. gasoline prices drop 7 cents

(CNN) -- The average price for a gallon of regular U.S. gasoline slipped almost 7 cents over the past two weeks, chasing a drop in crude oil prices, according to a nationwide survey published Sunday.

A gallon of regular now costs $3.85 on average, the Lundberg Survey found. In the past month, average prices have fallen more than 12 cents.

"The price decline comes from lower crude oil prices," said publisher Trilby Lundberg.

That's good news for consumers, but it comes from a negative place, she said.

"Oil prices themselves are down because the oil market sees economic weakness in Europe and the United States, which is a negative for oil demand," said Lundberg.

The survey tabulates prices every two weeks at thousands of gas stations nationwide.

The average price nationally one year ago was just shy of $4 -- some 15 cents under the current average, Lundberg said.

The city with the lowest average price per gallon was Tulsa, Oklahoma, at $3.40. The city with the highest average price was Chicago at $4.32.

Here are prices in some other cities:

-- Atlanta: $3.68

-- Boston: $3.90

-- Denver: $3.82

-- Houston: $3.74

-- San Francisco: $4.21

source: CNN

Oil prices up in Asia as US-British crude pact denied

Singapore - Oil prices rose in Asian trade Friday after the US and Britain denied reports that the two countries had agreed to release strategic reserves of crude, analysts said.

New York's main contract, light sweet crude for delivery in April up 36 cents to $105.47 while Brent North Sea crude for May delivery gained 37 cents to $122.97 on its first trading day.

The White House confirmed the issue was discussed by US President Barack Obama and British Prime Minister David Cameron, but denied that there was a pact.

"I can tell you that among the many topics of discussion that the British prime minister and the president had were energy issues. And the situation globally with the rise in the price of oil," said White House spokesman Jay Carney.

"But I can say very clearly that the report suggesting that any kind of an agreement was reached on a course of action with regard to those energy issues, that any agreement was reached with a timetable associated with it, that report is false. It is not accurate."

Victor Shum, senior principal of Purvin and Gertz energy consultants in Singapore, told AFP: "Oil has been rebounding since that denial."

Crude prices -- which have risen in recent month amid concerns over a stand-off between the West and Iran -- had fallen by more than $2 in New York and more than $4 in London before the denial. — AFP

source: gmanetwork.com

Survey: Gas prices up 12 cents in two weeks

(CNN) -- Gasoline prices have jumped another 12 cents over the past two weeks, according to a survey published Sunday.

The average price of a gallon of self-serve regular is now $3.81, the Lundberg Survey found.

It was less of a jump than the previous two weeks, when the price climbed 18 cents, said publisher Trilby Lundberg.

The average price found by the Lundberg Survey has jumped 30 cents in four weeks.

While crude oil is the biggest factor, events on the U.S. West Coast are helping keep retail prices up as well, she said.

Fortune: Why gas prices won't influence election


"Gasoline prices would like to peak soon because there is too much gasoline supply versus demand," Lundberg said, "except on the West Coast due to refinery maintenance projects.'

The higher prices on the West Coast "attract gallons from elsewhere in the country," impacting supply nationwide, she said. "So it creates a slightly tighter gasoline market for now."

"When those maintenance activities come to an end in the next few weeks, that will mean even greater gasoline supply versus demand," Lundberg said.

But the future of crude oil prices, the dominant factor in determining gas prices, remains unclear, she said.

"Of course, all of the real or perceived threats to Middle East oil continue to be in play, so it can't be known."

The gas price, a hot-button issue in the U.S. presidential race, is up 31 cents from the average a year ago, Lundberg said.

The Lundberg Survey tabulates prices at thousands of gas stations nationwide. It latest figures were collected Friday.

The city with the lowest average price in the latest survey was Denver, at $3.36. The highest was Los Angeles, at $4.35

Here are prices in some other cities:

-- Boston, $3.78

-- Philadelphia, $3.76

-- Atlanta, $3.72

-- Chicago, $4.08

-- Indianapolis, $3.77

-- Houston, $3.66

-- Las Vegas, $3.77

-- Seattle, $4.00

source: http://edition.cnn.com/2012/03/11/travel/gas-prices/index.html?hpt=us_c1