World of Oil

UPDATE 10-Oil up on Bernanke leaving stimulus door open

2012-07-17T22:58:00.001+01:00

* Bernanke offers few clues on likelihood of QE3
* China seen boosting crude imports from Iran-report
* U.S. crude stocks drop, distillates up-API
* Coming up: EIA oil data 10:30 a.m. EDT Wednesday (Recasts, adds API data in paragraphs 16-21)

By Robert Gibbons
NEW YORK, July 17 (Reuters) - Oil prices rose a fifth straight session on Tuesday, after U.S. Federal Reserve Chairman Ben Bernanke left the door open for more monetary stimulus but gave no signal on whether the Fed was closer to such a move.
Investors had hoped for signs that the Fed was nearing a third round of bond purchases, also known as quantitative easing or QE3, to boost a wavering economy.
After the first of two days of congressional testimony by Bernanke sent oil prices lower, both Brent and U.S. crude bounced back, with prices supported by tensions involving Iran's dispute with the West over Tehran's nuclear program, along with recent North Sea supply interruptions.
Bernanke repeated the Fed's pledge to act if needed, even while offering no new clues on when or how the central bank might offer extra support to the U.S. economy.
"It's post-Bernanke buying because, while he was not explicit about doing something, the door is clearly open," said John Kilduff, partner at Again Capital LLC in New York.
The euro recovered from losses against the dollar and U.S. stocks ended higher after both fell back when Bernanke's testimony before a Senate committee quelled hopes for quick Fed action after recent moves by central banks in China and Europe to bolster a sputtering global economy.
Brent September crude rose 63 cents to settle at $104 a barrel, swinging from $102.77 to $104.75.
U.S. August crude pushed up 79 cents to settle at$89.22 a barrel, having fallen to $87.41 before reaching the $89.46 intraday peak after the initial Bernanke-induced slump.
August crude options expire on Tuesday ahead of the August contract going off the board on Friday.
"The Iranian uncertainty and the North Sea problems are keeping oil supported, but I don't think those factors will last that long," said Mark Waggoner, president at Excel Futures Inc in Bend, Oregon.
Total crude trading volumes for U.S. futures matched the 30-day average, but Brent turnover lagged its 30-day average.
U.S. heating oil futures bounced back up along with crude futures. But U.S. gasoline futures ended nearly a penny lower at $2.8450 a gallon, having retreated after testing above the 200-day moving average of $2.8675.
Returning refinery units expected to improve supply and lower differentials in the New York Harbor market helped keep gasoline futures from rallying back, traders said.
SUPPLY TIGHTNESS
Production problems last week in the Buzzard field and an earlier strike by Norwegian oil workers are expected to push North Sea exports for 12 key grades to a 2012 low in August.
OPEC-member Angola's crude oil exports in September are set to fall by 300,000 barrels per day (bpd) to the lowest since June 2011, a preliminary loading schedule showed.
U.S. crude stocks fell 2.0 million barrels last week, industry group the American Petroleum Institute said in its weekly report.
Gasoline stocks were little changed, off 116,000 barrels, while distillate stocks rose 3.4 million barrels, the API said.
Ahead of the API report, U.S. crude stockpiles were expected to be down 1.2 million barrels, a Reuters poll of analysts showed. Gasoline stocks were seen up 1.2 million barrels and distillate stocks up 1.5 million barrels.
Crude stocks fell substantially in the week to July 6, by 4.7 million barrels, according to the U.S. Energy Information Administration (EIA).
The weekly report from the EIA is due at 10:30 a.m. EDT (1430 GMT) on Wednesday.
IRAN WILD CARD
With the European Union's embargo and tightening U.S.-led sanctions hampering exports and depriving Iran of revenue, China is increasing oil imports to a record high to help Tehran arrest its export slide, according to what Geneva-based consultancy Petrologistics said was a preliminary report.
U.S. Secretary of State Hillary Clinton said on Monday the United States and Israel were "on the same page" in their determination to prevent Iran from achieving what the West fears is its goal of building a nuclear weapon.
World powers and Iran have had several rounds of talks attempting to resolve the dispute.
Oil prices jumped on Monday in reaction to news that a U.S. Navy vessel off the United Arab Emirates fired on a fishing boat that did not heed warnings, reminding investors just how volatile the situation in the region can be. (Additional reporting by Christopher Johnson in London and Manash Goswami in Singapore; Editing by Andrew Hay, Jim Marshall and David Gregorio)

Oil Advances in New York, Reversing Earlier 1.2% Decline

2012-07-17T22:57:00.004+01:00

Oil rose to a seven-week high on speculation that inventories fell and as a report showed U.S. industrial production increased in June.
Prices advanced as supplies probably dropped 1.3 million barrels last week, a Bloomberg survey of analysts showed. Industrial output rose 0.4 percent. Prices fell earlier as Federal Reserve Chairman Ben S. Bernanke refrained from pledging new stimulus policies, then rebounded with equities as Bernanke said the central bank is ready to act to boost growth if labor markets don’t improve.

“The economic data is pretty good and it’s painting a better picture for oil demand,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “The market is getting prepared for tomorrow’s inventory report.”
Crude for August delivery increased 79 cents, or 0.9 percent, to $89.22 a barrel on the New York Mercantile Exchange, the highest settlement since May 29. Prices have declined 9.7 percent this year. The five-day streak of gains is the longest since April 27.
Prices were little changed after the American Petroleum Institute said oil inventories fell 2.01 million barrels to 379.9 million last week. The August contract gained 61 cents to $89.04 a barrel at 4:32 p.m. in electronic trading in New York. Oil was at $89.09 before the API report’s release at 4:30 p.m.
Brent oil for September settlement advanced 63 cents, or 0.6 percent, to $104 a barrel on the London-based ICE Futures Europe exchange.

Crude Inventories

U.S. oil supplies probably fell to 376.9 million in the week ended July 13 as refineries processed more crude into gasoline, the Bloomberg survey showed. Analysts also predicted gains of 1.2 million barrels in gasoline stockpiles and 1.3 million in distillate. The refinery utilization rate increased to 93 percent of capacity, which would be a five-year high.
Crude inventories dropped 4.7 million barrels in the week ended July 6 to 378.2 million, the lowest level since April 27, the Energy Department reported last week.
“While traders may react to what Bernanke says, there is a completely independent, physical fundamental story,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The demand-supply balance is going to be significantly tighter in the third quarter than it was in the second.”
The International Energy Agency on July 12 forecast that world oil demand will increase next year by 1 million barrels a day to 90.9 million a day. Consumption in emerging economies will surpass developed nations for the first time ever in 2013, the Paris-based agency said.

Industrial Output

The increase in June industrial production was bigger than the 0.3 percent forecast by economists surveyed by Bloomberg. The Fed also revised May data to show a 0.2 percent decline that was larger than first reported.
Oil also rose as confidence among homebuilders climbed in July to the highest level in five years and U.S. equities advanced. Crude, which reached an intraday high of $89.46, settled above the 50-day moving average for a second day.
“As we start breaking out above $90, the trend followers are starting to get long,” said Rich Ilczyszyn, chief market strategist and founder of Iitrader.com in Chicago. “That’s very bullish for oil.”
Oil fell as much as 1.2 percent in intraday trading after Bernanke said progress in reducing unemployment is likely to be “frustratingly slow” and refrained from discussing specific monetary actions to spur the economy.
Bernanke said in testimony to the Senate Banking Committee that economic growth slowed during the first half of this year. Equities advanced after Bernanke said he doesn’t view inflation as a hindrance to providing more stimulus.

‘A Disappointment’

“Bernanke’s testimony is a disappointment to those hoping that we get another affirmative step in terms of stimulus,” said John Kilduff, a partner at Again Capital LLC, a New York- based hedge fund that focuses on energy. “He acknowledged a slowing economy but he didn’t come across with anything substantive as to what the Fed is going to do about it.”
Bernanke and his colleagues on the Federal Open Market Committee are considering whether the economy will need more stimulus to reduce a jobless rate stuck above 8 percent since February 2009. Last month, they decided to extend Operation Twist, which lengthens maturities of assets on the Fed’s balance sheet, to the end of the year.
Electronic trading volume on the Nymex was 555,204 contracts as of 4:32 p.m. in New York. Volume totaled 503,009 contracts yesterday, 10 percent below the three-month average. Open interest was 1.44 million.a

Oil hovers above $88 on stimulus hopes

2012-07-17T22:57:00.000+01:00

Oil hovered above $88 a barrel Tuesday amid hopes China and the U.S. will take new steps to bolster their economies.

By early afternoon in Europe, benchmark crude was up 15 cents at $88.58 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.33 to end at $88.43 in New York on Monday.
In London, Brent crude was up $1.10 at $104.03 a barrel on the ICE Futures exchange.
Oil was underpinned by expectations that U.S. and China will do more to prop up slowing economic growth. The two countries are the world's biggest and second-biggest crude consumers. As consumers spend more and the economy strengthens, demand for oil is likely to rise.

Some analysts believe Federal Reserve Chairman Ben Bernanke will talk about additional stimulus when addresses Congress on Tuesday and Wednesday.
Expectations of possible Chinese stimulus measures rose after Premier Wen Jiabao's weekend promise of tax breaks and other aid to struggling small businesses. China's second-quarter growth fell to a three-year low of 7.6 percent but analysts said a rebound might be in sight.
"The latest statements ... by Chinese Prime Minister Wen Jiabao, coupled with renewed speculation that Fed chairman Bernanke may announce the possibility of further quantitative easing of U.S. monetary policy at his testimony before the U.S. Congress today, are currently giving buoyancy to crude oil prices," said analysts at Commerzbank in Frankfurt. "Apart from the supply risks and the hope of further stimulus measures, there are currently only few arguments which would justify the latest rise in the price of crude."
The main supply risk at the moment is judged to be the rising tension between the United States and Iran.
Oil prices were boosted Monday after U.S. Navy gunners aboard a refueling ship opened fire on a small boat racing toward them in broad daylight near Dubai. One person was killed and three were injured. All were Indian nationals and India's ambassador to the United Arab Emirates said Tuesday that the fishermen aboard the boat said they were given no warning before being fired upon.
The incident took place not far from approaches to the Strait of Hormuz, a key route for oil tankers which Iran has threatened to block in response to Western sanctions against Tehran's oil exports.
Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending July 13 is expected to show a draw of 1.4 million barrels in crude oil stocks and a build of 700,000 barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration — the market benchmark — will be out on Wednesday.
In other futures trading, heating oil was up 2.3 cents at $2.8480 a gallon and gasoline rose 2.18 cents to $2.8765 a gallon. Natural gas was down 1 cent at $2.79 per 1,000 cubic feet.

Oil up on Bernanke leaving stimulus door open

2012-07-17T22:56:00.001+01:00

By Robert Gibbons
NEW YORK | Tue Jul 17, 2012 5:31pm EDT

(Reuters) - Oil prices rose a fifth straight session on Tuesday, after U.S. Federal Reserve Chairman Ben Bernanke left the door open for more monetary stimulus but gave no signal on whether the Fed was closer to such a move.

Investors had hoped for signs that the Fed was nearing a third round of bond purchases, also known as quantitative easing or QE3, to boost a wavering economy.
After the first of two days of congressional testimony by Bernanke sent oil prices lower, both Brent and U.S. crude bounced back, with prices supported by tensions involving Iran's dispute with the West over Tehran's nuclear program, along with recent North Sea supply interruptions.
Bernanke repeated the Fed's pledge to act if needed, even while offering no new clues on when or how the central bank might offer extra support to the U.S. economy.
"It's post-Bernanke buying because, while he was not explicit about doing something, the door is clearly open," said John Kilduff, partner at Again Capital LLC in New York.
The euro recovered from losses against the dollar and U.S. stocks ended higher after both fell back when Bernanke's testimony before a Senate committee quelled hopes for quick Fed action after recent moves by central banks in China and Europe to bolster a sputtering global economy. .N
Brent September crude rose 63 cents to settle at $104 a barrel, swinging from $102.77 to $104.75.
U.S. August crude pushed up 79 cents to settle at$89.22 a barrel, having fallen to $87.41 before reaching the $89.46 intraday peak after the initial Bernanke-induced slump.
August crude options expire on Tuesday ahead of the August contract going off the board on Friday.
"The Iranian uncertainty and the North Sea problems are keeping oil supported, but I don't think those factors will last that long," said Mark Waggoner, president at Excel Futures Inc in Bend, Oregon.
Total crude trading volumes for U.S. futures matched the 30-day average, but Brent turnover lagged its 30-day average.
U.S. heating oil futures bounced back up along with crude futures. But U.S. gasoline futures ended nearly a penny lower at $2.8450 a gallon, having retreated after testing above the 200-day moving average of $2.8675.
Returning refinery units expected to improve supply and lower differentials in the New York Harbor market helped keep gasoline futures from rallying back, traders said.
SUPPLY TIGHTNESS
Production problems last week in the Buzzard field and an earlier strike by Norwegian oil workers are expected to push North Sea exports for 12 key grades to a 2012 low in August.
OPEC-member Angola's crude oil exports in September are set to fall by 300,000 barrels per day (bpd) to the lowest since June 2011, a preliminary loading schedule showed.
U.S. crude stocks fell 2.0 million barrels last week, industry group the American Petroleum Institute said in its weekly report.
Gasoline stocks were little changed, off 116,000 barrels, while distillate stocks rose 3.4 million barrels, the API said.
Ahead of the API report, U.S. crude stockpiles were expected to be down 1.2 million barrels, a Reuters poll of analysts showed. Gasoline stocks were seen up 1.2 million barrels and distillate stocks up 1.5 million barrels.
Crude stocks fell substantially in the week to July 6, by 4.7 million barrels, according to the U.S. Energy Information Administration (EIA).
The weekly report from the EIA is due at 10:30 a.m. EDT (1430 GMT) on Wednesday.
IRAN WILD CARD
With the European Union's embargo and tightening U.S.-led sanctions hampering exports and depriving Iran of revenue, China is increasing oil imports to a record high to help Tehran arrest its export slide, according to what Geneva-based consultancy Petrologistics said was a preliminary report.
U.S. Secretary of State Hillary Clinton said on Monday the United States and Israel were "on the same page" in their determination to prevent Iran from achieving what the West fears is its goal of building a nuclear weapon.
World powers and Iran have had several rounds of talks attempting to resolve the dispute.
Oil prices jumped on Monday in reaction to news that a U.S. Navy vessel off the United Arab Emirates fired on a fishing boat that did not heed warnings, reminding investors just how volatile the situation in the region can be.

2 years later, fish sick near BP oil spill site

2012-04-20T16:57:00.003+00:00

ARATARIA BAY, La. (AP) — Open sores. Parasitic infections. Chewed-up-looking fins. Gashes. Mysterious black streaks. Two years after the drilling-rig explosion that touched off the biggest offshore oil spill in U.S. history, scientists are beginning to suspect that fish in the Gulf of Mexico are suffering the effects of the petroleum.

The evidence is nowhere near conclusive. But if those susp

icions prove correct, it could mean that the environmental damage to the Gulf from the BP disaster is still unfolding and the picture isn't as rosy as it might have seemed just a year ago.
And the damage may extend well beyond fish. In the past year, research has emerged showing deep-water coral, seaweed beds, dolphins, mangroves and other species of plants and animals are suffering.
"There is lots of circumstantial evidence that something is still awry," said Christopher D'Elia, dean of Louisiana State University's School of the Coast and Environment. "On the whole, it is not as much environmental damage as originally projected. Doesn't mean there is none."
Reports of strange things with fish began emerging when fishermen returned to the Gulf weeks after BP's gushing oil well was capped during the summer of 2010. They started catching grouper and red snapper with large open sores and strange black streaks, lesions they said they had never seen. They promptly blamed the spill.

The illnesses are not believed to pose any health threat to humans. But the problems could be devastating to some prized types of fish and to the people who make their living catching them.
There's no saying for sure what's causing the diseases in what is still a relatively small percentage of the fish. The Gulf is assaulted with all kinds of contaminants every day. Moreover, scientists have no baseline data on sick fish in the Gulf from before the spill. The first comprehensive research may be years from publication.
Still, it's clear to fishermen and researchers alike that something's amiss.
— A recent batch of test results revealed the presence of oil in the bile extracted from fish caught in August 2011, nearly 15 months after the well blew out on April 20, 2010, in a disaster that killed 11 men.
"Bile tells you what a fish's last meal was," said Steve Murawski, a marine biologist with the University of South Florida and former chief science adviser for the National Marine Fisheries Service. "There was as late as August of last year an oil source out there that some of those animals were consuming."
Bile in red snapper, yellow-edge grouper and a few other species contained on average 125 parts per million of naphthalene, a compound in crude oil, Murawski said. Scientists expect to find almost none of the substance in fish captured in the open ocean.
— Last summer, a federally funded team of scientists conducted what experts say is the most extensive study yet of sick fish in shallow and deep Gulf waters. Over seven cruises in July and August, the scientists caught about 4,000 fish, from Florida's Dry Tortugas to Louisiana.
About 3 percent of the fish had gashes, ulcers and parasites symptomatic of environmental contamination, according to Murawski, the lead researcher. The number of sick fish rose as scientists moved west away from the relatively clean waters of Florida, and also as they pushed into deeper waters off Alabama, Mississippi and especially Louisiana, near where the Deepwater Horizon rig sank.
About 10 percent of mud-dwelling tile fish caught in the DeSoto Canyon, to the northeast of the well, showed signs of sickness.
"The closer to the oil rig, the higher the frequency was" of sick fish, Murawski said.
Past studies off the Atlantic Seaboard found about 1 percent of fish suffering from diseases, Murawski said. But he said that figure cannot really be used for comparisons with the Gulf, whose warmer waters serve as an incubator for bacteria and parasites that can cause lesions and other illnesses.
— Laboratory work over the past winter on the USF samples indicates the immune systems of the fish were impaired by an unknown environmental stress or contamination. Other researchers say they have come to similar conclusions.
"Some of the things I've seen over the past year or so I've never seen before," said Will Patterson, a marine biologist at the University of South Alabama and at the Dauphin Island Sea Lab. "Things like fin rot, large open sores on fish, those were some of the more disturbing types of things we saw. Different changes in pigment, red snapper with large black streaks on them."
Teasing out what might have been caused by the spill and what is normal will be tricky, and that's the challenge scientists now face. Deformities, diseases and sudden shifts in fish numbers are regular occurrences in nature. For example, scientists are not sure what to make of reports from fishermen of eyeless or otherwise deformed shrimp and crabs.
"I've heard everything but shrimp with two heads," said Jerald Horst, a marine biologist retired from LSU AgCenter who writes books about the Gulf. "I listen respectfully. Reports can be useful but are not proof in themselves of cause and effect."
Even if oil were pinpointed as the cause, it could be difficult to definitively tie the problem to the BP spill. The Gulf is strewn with wells, pipelines, natural oil leaks from the seafloor, and pollution from passing ships. And muddy, contaminant-laden water flows constantly into the Gulf from the Mississippi River.
Still, the more scientists look — thanks to millions of dollars in research money, much of it coming from a fund set up by BP for independent research — the more they're finding that may be off-kilter.
For example, last year scientists with the University of Louisiana at Lafayette took cruises in search of crabs, lobsters and seaweed they had been studying in the waters not far from the BP well. They found a surprising lack of diversity.
There saw less seaweed and fewer crabs, lobsters and other forms of life. Also, crustaceans they pulled up had lesions, lost appendages and black gunk on their gills, said Darryl Felder, a biologist at ULL. He said the black coating may be associated with the large amounts of drilling mud used to try to plug the leaking well.
In Barataria Bay, which was hit hard by the spill, scientists say they found dolphins that were anemic and showing signs of liver and lung disease. Those problems have not been linked to the spill. But in the same bay, scientists say they have linked oil contamination to genetic changes in bait fish known as killifish.
Near the BP well, scientists have found a dying community of deep-sea coral. The scientists recently published findings linking its demise to oil that was chemically fingerprinted as having come from the BP well.
Last year, the National Oceanic and Atmospheric Administration advised fishermen to throw suspicious-looking fish back, and fishermen say they have been doing that. At the same time, the Food and Drug Administration and state agencies say they have tested Gulf seafood extensively and found no problems, and researchers agree there is little cause for concern.
"It's not a people issue, and people should not be concerned about fish entering the market," Murawski said.
For the second year, fishermen like Wayne Werner, who catches red snapper commercially, are calling in with reports of lesions. He and others said they want to get to the bottom of the problem, which is forcing them to take longer trips to fishing spots outside the spill zone and making them fear for their livelihoods.

Oil Declines as U.S. Jobless Claims, Home Sales Miss Esti

2012-04-20T16:54:00.005+00:00

Oil declined in New York as more Americans than forecast filed applications for unemployment benefits and sales of previously owned homes fell, adding to concern that the U.S. recovery is stalling.

Futures dropped 0.4 percent after the Labor Department said jobless claims decreased by 2,000 to 386,000 last week. The median forecast of 47 economists surveyed by Bloomberg called for 370,000. Purchases fell 2.6 percent to a 4.48 million annual rate from 4.6 million in February, the National Association of Realtors reported in Washington.
“The jobless claims combined with the housing numbers are evidence that the economy is still struggling a bit,” said Phil Flynn, vice president of research at futures brokerage PFGBest in Chicago. “The economy is growing but it’s very uneven.”
Crude oil for May delivery declined 40 cents to $102.27 a barrel on the New York Mercantile Exchange, the lowest settlement since April 10. Prices are down 5.4 percent from a year ago.
Brent oil for June settlement increased 3 cents to end the session at $118 a barrel on the London-based ICE Futures Europe exchange.
The European benchmark contract’s front-month premium to New York-traded West Texas Intermediate for June delivery widened for a second day, reaching $15.28. The spread narrowed to $14.14 on April 17 based on settlement prices, the lowest level since Feb. 1.

Jobless Claims

The Labor Department revised the previous week’s jobless claims figure to 388,000 from 380,000. Employers added 120,000 jobs in March, half as many as in February and the fewest in five months, according to payrolls figures released on April 6. The jobless rate fell to 8.2 percent, a three-year low.
The Standard & Poor’s 500 Index and the Dow Jones Industrial Average were both down 0.6 percent at 3:51 p.m. in New York.
“The crude oil market tends to interpret economic data through the lens of the S&P,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “If the S&P is down, chances are crude will be as well.”
Brent oil climbed earlier as Spain and France met their maximum targets by selling 13.05 billion euros ($17 billion) in debt, and a projection of German economic growth increased.
“You are seeing greater strength in Brent than WTI because of the Spanish debt auction,” said Chris Dillman, an analyst and broker at Tradition Energy in Stamford, Connecticut.

European Crisis

Oil prices have moved for more than two years on the latest developments in the euro region’s debt crisis and its projected impact on the continent’s energy demand. The crisis that began in Greece has spread to Ireland, Portugal, Italy and Spain.
The U.S. was responsible for 21 percent of global oil demand in 2010, according to BP Plc (BP/)’s Statistical Review of World Energy released in June. The 17 countries using the euro accounted for about 12 percent of world use.
Oil in New York reached $110.55 on March 1, the highest intraday level since May 4, amid speculation that Western sanctions aimed at halting Iran’s nuclear program will disrupt Middle East shipments. Prices have dropped 7.5 percent since that peak as tensions have eased.
The first international talks in 15 months on Iran’s nuclear program, held April 14 in Istanbul, were called “constructive” by both Catherine Ashton, the European Union’s foreign policy chief, and Iran’s lead negotiator, Saeed Jalili. The United Nations’ five permanent Security Council members plus Germany will are scheduled to meet Iranian delegates on May 23.
“The oil market is in a bearish trend,” said Stephen Schork, president of the Schork Group in Villanova, Pennsylvania. “Prices surged above $110 not long ago on fears about a conflict with Iran. We’re now seeing the Iran premium slowly bleed away.”

Gasoline Market

Gasoline dropped to a seven-week low today on speculation that a slowing economy will reduce motor-fuel demand. The drop helped pull crude oil lower. An Energy Department report yesterday showed that consumption of the fuel last week was down 3.2 percent from a year earlier.
“All the action is in gasoline today,” Evans said. “There are concerns that demand won’t pick up.”
Gasoline for May delivery decreased 4.86 cents, or 1.5 percent, to $3.1541 a gallon in New York, the lowest settlement since Feb. 29. Futures climbed to $3.4166 on March 26, the highest level since April 29, 2011.
Electronic trading volume of crude oil on the Nymex was 456,804 contracts as of 3:51 p.m. in New York. Volume totaled 632,816 contracts yesterday, 1.1 percent below the three-month average. Open interest was 1.56 million.

Iran oil minister warns of new sale cuts to Europe Read more: http://www.foxnews.com/world/2012/04/19/iran-oil-minister-warns-new-sale-cuts-to-europe/#ixzz1sbHQbrp1

2012-04-20T16:54:00.002+00:00

TEHRAN, Iran – Iran's oil minister on Thursday raised the prospect of more cutoffs in oil sales to the European Union if the bloc failed to show some flexibility toward Iran ahead of a second round of nuclear talks next month.
Oil Minister Rostam Ghasemi said that while Iran has cut sales to Britain and France, it continues selling crude to "other countries" in the world. The remarks were likely to stir up confusion since they appeared to contradict earlier government statements that Tehran had also cut exports to Greece and Spain.

Iran first imposed the oil embargoes on Britain and France in February and in April, it said oil sales were cut to Greece and Spain as well. The measures were meant as pre-emptive retaliation ahead of an EU oil embargo that is due to go into effect in July.
The EU imposed the ban because of Iran's refusal to halt its controversial nuclear program. The bloc imports some 18 percent of total 2.2 million barrels of Iran's daily oil production.
Ghasemi said that if sanctions imposed by the 27-nation bloc were not lifted by the next round of nuclear talks between Tehran and world powers, then "we will surely cut oil to Europe."
"We are hopeful that they will lift sanctions on Iran's oil," said Ghasemi. "What we have officially cut is crude export to Britain and France. The oil sale to other countries has continued."
The West suspects Tehran's nuclear program is geared toward nuclear weapons. Iran denies the charge, saying its nuclear activities are only for peaceful purposes such as power generation and cancer treatment.
Iran, the second largest OPEC producer, earns some $80 billion annually, some 80 percent of its foreign revenue. The European measures included an immediate embargo on new contracts for crude oil and petroleum products, but existing contracts with Iran were allowed to run until July.
In December, the United States enacted new sanctions targeting Iran's central bank and its ability to sell petroleum abroad, but it delayed implementing the sanctions for at least six months out of worry about sending the price of oil higher while the global economy struggles.
Ghasemi's comments indicated that Iran is hoping the West will become flexible following the nuclear talks with the five U.N. Security Council members and Germany in Istanbul last week. Both sides praised the meetings as positive and decided to continue the talks. A second round is planned in Baghdad later in May.
After Istanbul, Iranian officials urged the West to start taking steps to lift sanctions imposed by the U.S. and the EU.

Texas oil and gas boom may help ease state budget crunch

2012-04-08T20:05:00.002+00:00

The combined forces of high oil prices and improved drilling technology have produced a gush of unexpected tax dollars from oil and gas wells across Texas.
Six months into the state's budget year, taxes paid on natural gas production are up 73 percent over the same period last year, while revenue from the oil production tax is up 49 percent.
Together, oil and gas taxes so far have brought in a total of $1.8 billion. That amounts to $684 million more than in the first half of last year, which was a blockbuster year in itself with $2.6 billion in oil and gas tax revenues.

And the state's most important source of revenue — sales tax collections — has been far exceeding projections, due in part to oil and gas companies' heavy spending on equipment, supplies and services needed to drill new wells.
That money is sparking hope that Texas will be able to plug at least some of the $4 billion budget hole that lawmakers left last year.
"The boom is great. It's not going to solve all of our fiscal problems, but it is one heck of a down payment," said Dale Craymer, president of the business-backed Texas Taxpayers and Research Association.
Industry insiders say the upswing in production and revenue is sustainable because technology rather than price speculation is driving the change.
Wary state officials are still taking a cautious approach because they know far too well the volatile nature of the oil and gas industry.
"If there is one thing that has been true in my experience in the oil business, it is that it is never a steady thing. It is either boom or bust," said oilman and retiring Senate Finance Committee Chairman Steve Ogden, R-Bryan. "We ought to enjoy the windfall, but don't count on it indefinitely."
Money set aside
Oil and gas once fueled much of the Texas budget.
Thirty years ago, the production taxes paid by oil and gas operators amounted to about 24 percent of state tax collections.
A price crash in the early 1980s sent Texas into a deep recession and a downward fiscal spiral that forced state lawmakers in 1987 to enact sizable budget cuts and tax increases.
That same year, they also proposed creating an Economic Stabilization Fund — and voters later authorized it — to be filled mostly by excess oil and gas production taxes.
The original intent of that rainy day fund was to smooth out the effects of big fluctuations in the economy by socking away money from when times were good to spend when times were tough.
The reliance on oil and gas taxes for state operations has since diminished in large part because the economy is less tied to the industry.
Setting aside tax dollars in the rainy day fund also helped to wean the state off that money for ongoing expenses. Last year, those taxes accounted for just 6.6 percent of the $39 billion in tax collections.
The rainy day fund has grown fat as historically high oil and gas prices in 2007 and 2008 spurred a huge increase in production. The fund ended 2005 with $6.9 million. Five years, later it had $7.7 billion.
Legislators tapped the fund to close a $3.2 billion budget deficit last year but left about $6 billion untouched.
It is expected to plump up even more because of soaring production in West Texas' long-established oil patch as well as a relatively new play in South Texas, the Eagle Ford Shale.
Technology opens supply
The Eagle Ford Shale had long tempted oil and gas companies, but they lacked a cost-effective way to access the vast reservoir of natural gas until 2005, said Brian Sullivan, a petroleum engineer and lawyer in Austin.
Technological innovations perfected in the Barnett Shale of North Texas changed the equation so companies could drill in Eagle Ford and make money, he said.
Across the country, it became economical to drill in areas that were previously considered unproductive because horizontal drilling meant wells could be bent to reach the deposits and hydraulic fracturing could be used to loosen up the oil and gas by injecting water, sand and chemicals into a well under high pressure.
The vast new supply of natural gas has driven the price into the cellar while oil prices have hovered around $100 a barrel. Those prices have historically moved in tandem, with oil generally 10 times that of gas. Today, oil is about 50 times the gas price, Sullivan said.
Even so, companies have continued to invest heavily in the Eagle Ford because many of the wells are producing something other than the low-price "dry gas" used to light your stove. The "wet gas" includes light oil called condensate and other natural gas liquids that can be sold at prices near that of oil.

Texas oil and gas boom may help ease state budget crunch

2012-04-08T20:04:00.002+00:00

The big picture: Oil tax reform justified by information at hand Read more: Fairbanks Daily News-Miner - The big picture Oil tax reform justified by information at hand

2012-04-08T20:03:00.002+00:00

The Alaska Legislature does not need a better microscope to see what’s wrong with the state’s oil tax system. The problem is best seen with the numerous wide-angle lenses already available.

During recent debates in Juneau, some legislators noted that the state Department of Revenue has not completed highly detailed, final audits of oil company tax payments from the past few years. Without that information, they assert, the state should not lower oil taxes in an effort to attract more reinvestment in Alaska’s oil patch.

But a tax rewrite clearly is justified by the information already available.

It’s true that the state still lacks final audits that detail how the state has fared under its current tax system, Alaska’s Clear and Equitable Share, which was enacted in 2007. The state doesn’t possess completed full audits yet because of the complexity of the current tax system and the failure of the administration and Legislature to give the Department of Revenue the manpower and tools to do the analysis quickly.

So Revenue Commissioner Bryan Butcher was taken to task at a March 26 hearing of the Senate Finance Committee regarding the absence of comprehensive audits of oil company tax returns.

But no such comprehensive audits were used during the debates leading up to passage of ACES in 2007, the commissioner noted. Nor were they used in the debate on creation of the system in place prior to ACES, he said in comments to the Daily News-Miner.

Commissioner Butcher said his department can confidently assess the ACES tax rates using what are called “desk audits,” monthly and slimmed-down tax return audits performed in advance of the comprehensive audits. Desk audits, he said, give the department “an accurate read of the companies’ tax returns.” A company must pay a hefty penalty if the comprehensive audit later shows it underpaid its taxes.

These audits give policymakers sufficient aggregated information about tax payments, credits and deductions to know that something needs to change. While work in oil-producing regions across the globe has boomed in recent years, Alaska has been left behind.

One of the most forceful critics of the state’s lack of final audits has been Sen. Bert Stedman, R-Sitka and co-chairman of the Senate Finance Committee. However, he has not let his concerns about the audits blind him to the broader problem. Stedman’s committee last week was busily amending the Senate’s reform bill, and — surprise — the legislation offers reduced oil tax rates. While the Senate bill still doesn’t reduce rates as much as advocated by the industry and Gov. Sean Parnell, the point here is that even Stedman apparently considers final audits to be a unnecessary prerequisite for corrective action on oil taxes.

We don’t need those audits to know that Alaska’s tax structure is not competitive with most other oil regions. Some legislators remain unconvinced of that fact, despite hearing from numerous consultants who have delivered the same message.

One of those consultants last year explained the risk of delaying action and seeking ever more analysis of where Alaska’s tax structure places it in the global competition for reinvestment of the billions being raked in by oil companies.

“Any production losses that are occurring now with the current tax system will continue to accumulate,” wrote Roger Marks of the firm Logsdon & Associates in a report prepared for the Legislative Budget and Audit Committee. Marks, who previously worked many years for the state as a petroleum economist, added that “the question is how much more useful the information is beyond what we have now.”

Alaska is at a pivotal moment, and its leaders have the information they need to more forward. They’ve heard from the consultants, from the administration, from the oil industry and from the supporting businesses that rely on the oil industry to keep thousands of Alaskans employed.

Changes on the scale of those proposed by the governor and adopted last year by the House are the best hope for seeing greater oil production, and putting more Alaskans back to work, even though it will cost Alaska some significant revenue in the near-term.

Alaska can’t afford to sit, to continually seek more information, as the flow of oil continues to decline.

Read more: Fairbanks Daily News-Miner - The big picture Oil tax reform justified by information at hand

Iran’s Yadavaran Oil Field to Begin Early Output, Shana Reports

2012-04-08T20:02:00.001+00:00

Iran will start early production from its Yadavaran oil field in “days,” the Oil Ministry’s website reported, citing Naji Sadouni, managing director of Iran’s Petroleum Engineering & Development Co.
The oil field will start with a production of 20,000 barrels of oil a day, Sadouni said, according to Shana.
Yadavaran’s development plan comes in three phases with an output of 85,000 oil barrels a day upon completion of the first phase, and 180,000 and 300,000 in the second and third phases respectively, he said.

Kenya: Tullow Oil in Second Stage of Exploration

2012-04-08T20:00:00.005+00:00

Kenyans should not rejoice yet as the oil prospecting at Ngamia 1 is still at its second stage-exploration.
Tullow Oil which announced last month that they have discovered oil in Turkana told reporters on Thursday that the exploration process was still far from being conclusive. "We are excited by the prospects but we will only be definite when we reach 2,700metres after which the results will be further analysed and the well be tested," said Tullow general manager for Kenya Martin Mbogo at the site in Lokichar during a media tour.

By yesterday, Tullow had drilled 1,515metres at block 10BB at Ngamia Rig site. Mbogo said they expect to reach their primary drilling of 2,700metres in 35 days. The drilling is being done by Weatherford International using Rig 804. Martin Mwaisakenyi, commissioner for petroleum energy at the Ministry of Energy said it was still early to determined whether Ngamia 1 was viable for commercial production. "Now we are speculating we cannot say for sure if the oil will be enough for production but this is the most promising well since we started oil exploration in 1960," he said.
The Ngamia well was initially drilled to a depth of 1,041metres and movable oil was found. The oil discovered in the area has similar properties to the the light waxy crude discovered in Uganda. Forty wells have been sunk in Uganda to date and 1.1 billion barrels have been discovered. Commenting on the rising tension by locals who claims they were not consulted, Mbogo said they have had a number of stakeholders meetings with the locals. "We have a very good working relation with the government and the locals have benefited too, especially in infrastructure development," Mbogo said.
In 2011, Tullow spent Sh30 million to help in education, health and infrastructure development in the area. There are five stages in oil production and Ngamia well is at the second stage, called exploration. After exploration which entails detailed survey to identify a suitable project, it moves to appraisal stage. If a prospect is discovered appraisals wells are used to check flow rate of the hydrocarbon (oil). This is the stage that Ngamia well is headed to.
The third stage is the development stage where Tullow Oil will asses the commercial viability of the find which is followed by drilling of wells in preparation of oil production. Uganda is at this stage. The final stage is the production by extracting and selling the oil. Mbogo said the project may take up to three years if oil is found in the Ngamia well. The company has already started prospecting for oil at Block 10A (Paipai-1) in Marsabit. Other blocks are in Baringo, Turkana and Kisumu.

Iran oil development fund could reach $55 billion: President

2012-04-08T20:00:00.003+00:00

Iran's President Mahmoud Ahmadinejad said on Saturday the country's sovereign wealth fund could reach $55 billion by March next year if oil prices kept high, in an apparent bid to defend his economic record in the face of increasing isolation.

Washington and the European Union have stepped up sanctions on the Islamic Republic, alarmed by its disputed nuclear programme.

Iran earned up to $100 billion in oil revenue last year but an EU embargo set to come into force in July could put a major dent in future income.

The president has also faced criticism inside Iran for his handling of the economy, particularly over his withdrawal of generous food and energy subsidies in favour of cash handouts - a move that critics say has fuelled inflation and increased hardship.

Iran's National Development Fund - which is currently valued at around $35 billion - was set up by Ahmadinejad's government last year to collect some of the proceeds from the country's oil and gas industries for the benefit of future generations.

A minimum of 20 per cent of its reserves is supposed to be invested abroad.

"Taking into the account the upward movement of oil prices, Iran's National Development Fund could reach 55 billion by the end of the [Persian] year [March 2013]," The Iranian state news agency quoted the president as saying during a visit to north-eastern Iran.

"For the first time in history ... [the] government has been able to save a proportion of its oil revenues while previous governments spent all revenues every year," Ahmadinejad said.

Ahmadinejad added the 20 per cent of oil revenues set aside in the past would increase to 23 and 26 per cent in the following two years.

Previous governments had contributed to the Oil Stabilisation Fund which was created in the year 2000 to support the national budget during oil price fluctuations. Its funds have been transferred to the National Development Fund.

Sanctions against Iran aim to hurt Iran's energy industry and its financial sector, forcing oil companies to choose between buying Iran crude or continuing business in the United States. Companies that want to continue trading with Iran have encountered increasing difficulties in meeting oil payments.

The International Energy Agency recently said that the wide-ranging sanctions against Iran could reduce its oil exports by as much as 1 million barrels per day, or 40 per cent, from the middle of the year.

Western powers have ratcheted up sanctions to force Tehran to abandon uranium enrichment which they suspect is part of a programme to development nuclear weapons. Iran has repeatedly denied the accusations.

Iran is due to hold further negotiations with Western powers next week in an effort to find a solution but the time and date of the talks have still not be finalised.

Firefighters train for oil and gas emergencies

2012-04-08T20:00:00.000+00:00

Chances of an emergency are slim, but it's better to be over-prepared than caught off guard, said Rhonda Reda, Ohio Oil and Gas Energy Education Program executive director, which has been hosting the training for about 12 years.
"It's just another way that Ohio is ahead of the curve ... I'm proud, as an industry person, that Ohio is considered a model in many of our safety programs," Reda said. "I think people should be proud to know that."

Each session costs about $20,000 to host -- OOGEEP will host five this year -- but it is all paid for by donations from oil and gas companies, Reda said. There is no cost for firefighters to attend.

Improving skills

The sessions are at the Wayne County Fire and Rescue Training Facility. The campus is like "Disneyland for firefighters," Reda said. They can improve their rescue skills in a life-sized maze, or they can simulate mass emergencies in a miniature city that fills up with smoke.
The oil field training culminated with firefighters gathered around a 100-barrel oil tank. The tank was filled with crude oil and water, and there were four lines continuously pumping gas to the tank.
Firefighters used a torch to set the tank ablaze, then took turns battling the flames in teams, learning how to push back the fire and heat using a fog spray, which is more fanned out than a direct stream.
At the end of the training, firefighters doused the tank with class B foam, which knocked down the flames in about five minutes.
New Concord Fire Department Chief Brent Gates has been an instructor for the oil field emergency training for six years. The three biggest lessons he tries to pass on to trainees are to use teamwork, including multiple firefighters on a single hose; to work with surrounding agencies to bring in as much manpower as possible; and to use caution, he said.
Gates tells firefighters to treat oil field emergencies like hazardous chemical situations.
"We very honestly stress the teamwork," he said. "Listen to the oil companies; they're the experts."
A drilling-rig fire isn't very likely, Gates said. In fact, he thinks he's more likely to be called to a rig for something like a worker having a heart attack or falling off a ladder.
It can't hurt to be ready for all kinds of situations, he said.
"I have to be prepared, and I have to understand the equipment, even going in on an EMS call," he said. "This class here gives the opportunity for people to do that. They walk away with a lot of knowledge, a lot of resources and a lot of information."
Cambridge firefighter Matt Stiffler was at the training with a group of four co-workers. Stiffler has been a firefighter for 19 years, he said, including four at Cambridge. A lot of the training material was review for him, but it was good to have it reinforced, he said.
"The more guys we can get trained at our station, the better it's going to be for us and the community," he said. "We all have limited experience with the rigs and things like that, but to actually be up close and personal, that's a plus."
Stiffler's co-firefighter, Scott Elliott, has been at the Cambridge Fire Department more than than 11 years, he said. Along with the firefighting tips, Elliott also learned a lot about the drilling process, he said, so he now feels better prepared to help educate the public about controversial issues such as hydraulic fracturing.

A rare scenario

There are 65,000 active wells in Ohio and the oil and gas industry produced more than 70 billion cubic feet of natural gas in 2011, Reda said, but even with those numbers, emergencies are rare, she said.
That's because of training sessions such as this past weekend's and because Ohio has some of the most stringent drilling laws in the country, she said.
"It's really about the industry being good corporate stewards," she said. "Again, it's about being proactive instead of reactive."
OOGEEP doesn't have a way to quantify the number of oil and gas emergencies in Ohio per year because too many situations are lumped together -- for example, a rig fire, a gasoline-station fire and a natural-gas leak in a private home all would be lumped in the same category, Reda said. But if she had to guess, Reda would say there are fewer than five oil and gas emergencies per year, she said.
The No. 1 cause for emergencies is vandalism, she said, with lightning strikes taking the No. 2 slot.
Aside from handling emergencies, the training sessions also teach firefighters about oil field equipment in order to distinguish between emergencies and non-emergencies, Reda said.
For example, sometimes drilling equipment makes loud noises, and people call the fire department. Or they see bright lights on a rig at night and call the fire department. Firefighters need to understand how the equipment works so they know what is and isn't normal, Reda said. That way, a department isn't rushing all its resources to a drilling site to check on "equipment doing exactly what it's supposed to be doing."

Nothing new

OOGEEP started its oil field emergency workshops about 12 years ago, partially in response to a tank fire. Lightning hit the tank, starting a small fire, Reda said, and when firefighters arrived they saw red and immediately started blasting water.
The water only flooded the tank and surrounding dike, however, shooting a stream of flaming oil out into the field.
What firefighters should have done is applied some coolant and allowed oil and gas personnel to shut off the gas flow, Reda said. But, in their defense, they had no way of knowing that, she said.
So, industry leaders decided it was time to launch a training program, and it has been going strong ever since, Reda said. To date, more than 800 firefighters have been trained through the program, from 36 Ohio counties as well as seven other states: Indiana, Illinois, North Dakota, West Virginia, Pennsylvania, Texas and Kansas.
OOGEEP had to increase the number of sessions to five this year because of increased Utica Shale interest, Reda said, but the training itself is nothing new.

N. Dakota oil, brought here, could help gas prices

2012-04-08T19:58:00.001+00:00

Something curious is happening here in the heart of California oil country.
A 26,000 barrel-a-day refinery on East Panama Lane is buying large amounts of crude from North Dakota and paying to have it hauled by train to Bakersfield, where it's turned into mostly gasoline and diesel for the California market.
That's like selling coals to Newcastle, as the British say. Surely the refinery could find raw material closer to home.
The ingenious part of Kern Oil & Refining Co.'s strategy is, the company turns a bigger profit using midcontinent crude than if it were buying roughly the same grade oil strictly in Kern County.
Strange though this may seem -- and people in the industry admit the situation is more than a little odd -- there's every reason to believe other refineries will soon follow Kern Oil & Refining's lead.
Oil marketer Bob Devine said more California refiners are gearing up to bring in midcontinent crude.

"I know that there are a number of people looking at it and looking at making arrangements," he said.
Depending how widespread the trend becomes, it could push down barrel prices for Kern County oil producers, and potentially lower prices at the pump. It could also reduce California's growing dependence on oil imported from the Middle East and South America.
A better price
Simple math is the driving force behind the shift, which appears to have begun in 2010. Math, that is, and a technology-fueled oil boom that has outpaced pipeline companies' ability to deliver oil to refining hubs.
Widespread use of hydraulic fracturing and directional drilling in what is called the Bakken formation have opened up vast oil reserves in and around North Dakota. The state's oil production has shot up to about 550,000 barrels a day, more than four times the volume achieved just five years ago, bringing it roughly even with California's production rate.
But while California's 2 million-barrel-a-day refining industry thirsts for oil, North Dakota is awash in it. Pipeline companies caught off guard by the boom are estimated to be at least a few years away from connecting Gulf coast refineries with the midcontinent.
In the meantime, a glut of Bakken crude has contributed to a historic price imbalance. At the end of March, oil from the Bakken was selling at about $92 a barrel. Heavy Kern County crude, meanwhile, was going for about $112 a barrel.
The $20 a barrel price difference presents opportunities for companies like Kern Oil & Refining that have been able to reengineer their plants to make efficient use of light North Dakota crude. That's assuming, of course, they spend less money on getting it to the refinery than what they save on buying it.
Kern Oil & Refining did not return calls requesting comment. But industry insiders estimate the company's rail costs at no higher than $18 a barrel, and perhaps less than $15 a barrel.
Not all of the refinery's crude is coming from North Dakota; probably most of its feedstock is locally produced, say consultants and others familiar with the company. But it's still a large amount.
Late last month, railroad watchers who share their observations on trainorders.com tracked the movement of a train carrying about 60 tankers of Bakken crude into Kern Oil & Refining. That amounts to more than 40,000 barrels of oil in a single shipment.
Refinery consultant Dave Hackett recently examined the economics of shipping midcontinent crude to California on his blog at stillwaterassociates.com. He said Kern Oil & Refining has a strong financial incentive to bring in large volumes of Bakken oil.
"My guess is they're running as much as they can get," he said.
At least one large West Coast refinery is looking at doing the same. In July, Tesoro Corp. announced it was spending $50 million to build new rail loading and unloading facilities at its 120,000-barrel-a-day refinery in Anacortes, Wash. The upgrade would allow it to receive up to 30,000 barrels a day of North Dakota crude -- up from 1,000 to 2,000 barrels a day now.
But for how long?
It is unclear how long oil prices will continue to favor midcontinent crude.
Refiners have historically shunned railroads when sending crude over long distances. They prefer to use pipelines, which cost a lot less to operate, or they buy locally.
Industry consultant Horace Hobbs, with Muse, Stancil & Co., said one reason why it makes sense lately to ship crude from North Dakota to California is the high price of oil. If barrel prices fall, so does the price margin, which leaves less room for transportation costs.
Even so, Hobbs predicted that Bakken oil will pencil out in California for a while yet.
"I certainly wouldn't be surprised if this goes on, at least intermittently, for a number of years," he said.
Not all refineries can process Bakken crude, either because they are engineered to run on other grades of oil or because they produce asphalts and other goods not suited to it.
For instance, San Joaquin Refining Co. Inc.'s 15,000-barrel-a-day plant in Bakersfield might like to run Bakken crude to save money, but it can't because it was designed to run on heavy oil produced in the San Joaquin Valley.
"This puts San Joaquin Refining in the position of having to refine the higher priced local crude while some of our competitors enjoy purchasing less expensive crude oil," Mark Del Papa, the refinery's vice president of supply and distribution, wrote in an email.
With more attention being focused on midcontinent oil, some in the industry see implications for local oil producers.
Although California prices tend to reflect global demand, Hackett said purchases of Kern County crude could slip as a result of Bakken deliveries, and that could put downtown pressure on prices.
"If you're a producer," he said, "then you need to know that the boys are looking for alternatives. They're looking for cheaper crude. And it's likely to happen."
There's still no reason to worry, said Tupper Hull, vice president of the Western States Petroleum Association. He said oil prices will find equilibrium as refiners establish new transportation patterns.

Whales sensed Deepwater Horizon oil rig disaster

2012-04-08T19:53:00.003+00:00

A technique that monitors whales through the sounds they emit has answered a key issue raised by the explosion of the Deepwater Horizon oil rig in the Gulf of Mexico two years ago this month.
The sound-monitoring technique revealed that sperm whales retreated from the immediate area around the spill caused by the explosion.

"There's obvious evidence of relocation," said team member Azmy Ackleh, professor and head of mathematics at the University of Louisiana at Lafayette.
The discovery is important because it provides information about a species almost hunted to extinction for its valuable oil in the 19th century.
Sperm whales are listed as endangered under the terms of the United States Endangered Species Act, and estimates of their population vary between 200,000 and 1.5 million worldwide.
However, said Vassili Papastavrou, lead whale biologist for the International Fund for Animal Welfare who did not work on the study, "sperm whales are difficult animals to count, because they spend so much of their lives beneath the surface. The overall population estimates are so uncertain that it is not possible to determine trends."
The discovery of their relocation also indicates the value of "passive" acoustic technology, which quietly listens for things instead of actively bouncing sounds off objects to find them. This approach, first tried in the 1980s, uses hydrophones mounted on buoys to detect "clicks," the powerful sounds emitted by the sperm whales. The University of Louisiana team, led by Natalia Sidorovskaia, associate professor and chair of the physics department, has extended the technology to localize and track sperm whales and to estimate their populations, and to do the same for other marine mammals, including other types of whales and dolphins.
Traditionally, zoologists have measured the location and size of whale populations by spotting them from boats or tagging individual whales with radio transmitters. While visual surveys are often inaccurate, tagging is very expensive.
The use of sound overcomes both problems.
"The usefulness of passive acoustics is generally under-appreciated, and the effort to develop it as a long-term monitor tool is timely," said Donald Baltz, professor and chair of the department of oceanography and coastal sciences at Louisiana State University, who was not involved with the study.
"As long as we can hear the whales, we can count them," Sidorovskaia said. "Passive acoustic measurements are not dependent on weather or light conditions and are much cheaper."
Sperm whales transmit three types of sound, Sidorovskaia said. An echolocation signal is used in the way humans use radar, which helps the whales locate the ocean bottom and identify prey. A second signal serves as communication between whales. And the third is a short-range echolocation signal emitted when they are very close to their prey. Sidorovskaia said it's probably "for more accurate short-range prey tracking."
The range of frequencies in the sound signals, otherwise known as bandwidth, differentiates sperm whales from other whales, in much the same way that different cell-phone providers use different parts of the radio-frequency spectrum for managing communications.
"Each animal has a particular bandwidth," Ackleh explained. "It's a low bandwidth for sperm whales."
By using enough hydrophones, the team can determine more than the density of sperm whales in any part of the sea.
"We can determine the range and depth of the whales," Sidorovskaia said. "We can even track whales' diving patterns based on the signals they produce."
The team used passive acoustics to monitor a "resident population" of female sperm whales and their calves off the Louisiana coast in 2001, 2002 and 2007.
After the Deepwater Horizon explosion and spill, team members realized that the hydrophones they used for those recordings had been placed nine, 25, and 50 miles from the ill-fated oil rig.
So they set up fresh hydrophones in the same locations, collected acoustic signals characteristic of sperm whales, and applied statistical methods to compare the species' population before and after the spill.
"A comparison of the 2007 and the 2010 recordings shows a decrease in acoustic activity and abundance of sperm whales at the nine-mile site by a factor of two, whereas acoustic activity and abundance at the 25-mile site has clearly increased," the team wrote in the Journal of the Acoustical Society of America.
Just why the sperm whales moved away from the site is unclear. One possibility is that they followed their food sources out of the spill area. Sperm whales feed on giant squid, for which they dive about half a mile below the sea surface. They are also known to follow fishing boats and snag fish off their lines.
The team has garnered other firsts in applying passive acoustics. For example, it is building a library of whales' "voiceprints" based on the sounds they make, which they can then use to locate and track single whales.
"This is very new," Sidorovskaia asserted. "Our group would claim the initial idea."
Other research involves listening for beaked whales and refining the technology for more precise location of marine mammals.
"We're looking at a two-dimensional circle in the water now," Ackleh said. "We hope eventually to detect animals in three-dimensional spheres."

Brent Oil’s Premium to Dubai at Three-Week High: Asia Crude

2012-03-28T11:48:00.002+00:00

Brent crude, the benchmark European oil contract, traded at the highest premium in more than three weeks against Dubai, the Mideast grade.
The May Brent-Dubai (PVMMDBSP) exchange for swaps, which measures the European marker grade’s premium against the Middle East oil, rose 10 cents to $4.10 a barrel, the highest since March 5, according to data from PVM Oil Associates Ltd., a London-based brokerage. The June EFS climbed 9 cents to $4.12.
PT Pertamina (PERT), Indonesia’s state oil company, bought 700,000 barrels of Sokol crude for June delivery to the company’s Balikpapan refinery, according to a company official who declined to be identified, citing company policy.

Refinery profit margins in Singapore have averaged $1.51 a barrel over the last five days, according to data compiled by Bloomberg, the lowest since November.
Dubai crude’s backwardation, when the price for delivery now is greater than that for later, fell by 3 cents. Swaps for April were $1.90 a barrel more than June, according to data from PVM Oil Associates Ltd., a London-based broker.
Oman crude for May fell 11 cents to $123.37 on the Dubai Mercantile Exchange at 5:33 p.m. Singapore time, with 1,608 contracts traded. The contract settled at $123.33 at 12:30 p.m. Dubai time.
Nineteen partial cargoes of Dubai crude were sold today in the Platts pricing window, according to a survey of traders who monitor the market.

Oil falls below $107 in Asia as traders eye Iran nuclear talks

2012-03-28T11:46:00.003+00:00

Rising crude inventories in developed countries and quickening inflation and weaker consumer demand caused by soaring fuel costs could also bring oil prices lower, Morgan Stanley said.
“With crude reaching record levels in many currencies, catalysts are finally emerging for weaker prices in the second quarter,” the bank said in a report. “Fundamentals warrant a modest price correction.”

Other analysts expect worries about Iran will keep oil prices elevated. Iran is the world’s third-largest crude exporter, and reports last week said its oil sales abroad fell sharply last month, suggesting sanctions imposed by Western powers have begun to hurt Iran’s economy.
Saudi Arabia has pledged to increase production to replace Iran’s lost output, but that would leave little global spare capacity, Citigroup said.
“This has left markets extremely jittery,” Citigroup said in a report. “The inflammatory rhetoric between the U.S., Israel and Iran shows no sign of abating, and prices are likely to remain under pressure.”
Oil traders brushed off a jump in global stock markets. Federal Reserve Chairman Ben Bernanke suggested Monday that the U.S. central bank would continue its policy of low interest rates to help spur job creation and economic growth.
The Dow Jones industrial average rose 1.2 percent Monday and Asian stock markets advanced Tuesday.
Traders will be closely watching the latest data on housing and consumer confidence later Tuesday for clues about the strength of the U.S. economy.
In other energy trading, heating oil was down 0.6 cent at $3.24 per gallon and gasoline futures fell 0.9 cent at $3.39 per gallon. Natural gas slid 1.8 cents at $2.21 per 1,000 cubic feet.

South Sudan Says Sudan Bombed Oil Field as Bashir Cancels Summit

2012-03-28T11:45:00.004+00:00

South Sudan said Sudanese planes bombed an oil field in Unity state as a meeting between the two countries’ leaders was canceled following border clashes.

There was no apparent damage to the oil field, Unity state’s information minister, Gideon Gatpan, said today by phone. Al-Sawarami Khaled, a spokesman for Sudan’s army, had his phone switched off when called seeking comment.
Sudanese President Umar al-Bashir called off a planned April 3 meeting with his South Sudanese counterpart, Salva Kiir, Foreign Ministry spokesman al-Obeid Murawih said today by phone from Khartoum, because of the violence. They were due to meet in newly independent South Sudan’s capital, Juba, to sign agreements on protecting the rights of citizens in both countries and on border demarcation.
“I think it’s possible that there is a split in Khartoum,” Jonah Leff, an analyst with the Geneva-based Small Arms Survey, said in an emailed response to questions. “However, Bashir was never comfortable with the idea of arriving on Juba soil, so I doubt he thought twice about canceling the trip.”
South Sudan yesterday accused Sudan’s military of bombing its forces in the disputed area of Jaw along the border between Unity state and the north’s Southern Kordofan state. South Sudan’s army spokesman, Philip Aguer, also reported fighting around the oil-rich area of Heglig.
Sudanese army spokesman Khaled yesterday denied his forces attacked Jaw and reported “minor clashes” between the armies.

Bashir Still Welcome

South Sudan’s government spokesman, Barnaba Marial Benjamin, said Sudan has not yet informed the authorities in Juba of its intention to cancel the summit. Bashir was still welcome, he said.
Benjamin told reporters in Juba today that “hawks” within Sudan’s government were responsible for inciting attacks in order to derail the peace process and prevent Bashir from visiting South Sudan to meet with Kiir.
The countries have been embroiled in disputes over oil, borders and citizenship rights since the south gained independence in July, assuming control of three-quarters of the formerly united country’s crude output of 490,000 barrels a day.
The crude is pumped mainly by China National Petroleum Corp. (CNPZ), Malaysia’s Petroliam Nasional Bhd. (PET) and India’s ONGC Videsh Ltd.
Members of al-Bashir’s ruling National Congress Party (NCP) are probably bitter about losing control of the oil, said Leff.

Borderland Riches

“I can imagine that a large proportion of the NCP do not want to negotiate over the riches that they once controlled,” he said. “I would expect for them to continue using aggressive means to recapture the borderlands.”
One of the two accords the presidents had agreed to sign would have required the formation of a joint committee and technical team to manage and implement border demarcation.
Pagan Amum, the south’s chief negotiator, told reporters in Juba on March 25 that the meeting could open the way for a deal to resume crude production, which South Sudan halted in late January after accusing Khartoum of stealing its oil.
Khartoum said it confiscated the crude to make up for fees owed by the landlocked south for use of a pipeline and processing facilities in its territory.
Sudan and South Sudan signed a non-aggression pact last month aimed at easing border tensions and stopping support to militia groups on either side of the border. The agreement has failed to prevent border clashes, and both sides claimed rebel militia groups took part in yesterday’s attacks.
“What this latest episode does show is the continued fragility of the North-South relationship, and once more demonstrates that even with formal agreements in place, volatile situations can deteriorate very rapidly,” Aly Verjee, a senior researcher with the Nairobi-based Rift Valley Institute, said in an e-mailed response to questions.

South Sudan official says Sudan bombs oil field

2012-03-28T11:45:00.000+00:00

Sudan's military bombed an oil field in South Sudan on Tuesday, a South Sudan official said, as a dangerous flare-up in border violence appeared to scuttle plans for a presidential summit between the two countries.
Unity State Minister of Information Gideon Gatpan said Sudan dropped at least three bombs near oil fields in the town of Bentiu. Gatpan said the extent of any damage wasn't immediately known.
The attack comes one day after Sudan and South Sudan clashed in the disputed border town of Jau, prompting Sudan to cancel President Omar al-Bashir's trip to meet with South Sudan President Salva Kiir next week.
South Sudan broke away from Sudan last year, but tensions between the longtime foes have remained high.

Among the unresolved issues is the demarcation of the border and an agreement to share oil revenue. South Sudan earlier this year stopped pumping oil because it said Sudan - which owns the pipelines the south's oil must travel through - was stealing its oil.
Despite the increased violence, South Sudan held out hope the presidential meeting could still happen. South Sudan Minister of Information Barnaba Benjamin Marial said the south still expects al-Bashir to attend the meeting next week, saying South Sudan had not received an official cancellation from Khartoum.
Marial said the south believes that "forces of war" in Khartoum were trying to derail the peace process, but not al-Bashir himself. He said the south would not take the bait.
"Our president has said clearly we will not be dragged into a senseless war," Marial said. "We will not be dragged into a conflict with Sudan."
In a statement, the White House urged the two sides to "exert the greatest restraint" and said it is "critical" that they proceed with the presidential summit and other meetings.
"Only through direct contact and negotiations over fundamental issues of security and border management ... can Sudan and South Sudan avoid further fighting, achieve vitally needed economic cooperation, and coexist in peace," the statement said.
The two countries disputed which side was the aggressor in Monday's clash in Jau.
Marial said that Sudanese troops "without any provocation" bombed Jau on Monday afternoon before Sudanese ground forces and militia fighters moved in. Marial said that South Sudan troops repulsed the "invading forces" back to the town of Heglig, Sudan. Marial had no information on troop numbers involved or casualty figures.
Sudanese authorities say South Sudan started the fight.
"These attacks are the responsibility of the SPLA and the South Sudanese government," Sudanese Second Vice President Alhaj Adam Yousif said during an address on Sudanese state television late Monday. "The SPLA attacks have targeted our oil and our army." The SPLA is an acronym for South Sudan's military.
Sudan said that the Darfur-based rebel group Justice and Equality Movement, or JEM, fought alongside the SPLA during Monday's clash.
The border violence continued into Tuesday near Benitu, Gatpan said.
"They are hovering and dropping over the northern part of town in the oil fields, the main Unity oil fields," Gatpan said. He said teams were being sent to the oil fields to assess the damage.
Yousif said that given Monday's violence, the presidential visit to sign agreements recently reached in Ethiopia would not happen.
"The visit of President Bashir was tied to good neighborly relations," said Yousif. "There is no way for this summit to take place now."
The cancellation of the summit effectively halts momentum in negotiations between the two countries on issues leftover from a 2005 peace deal that saw South Sudan separate from Sudan last July.
Oil has been the biggest disagreement. The row prompted South Sudan to shut down its oil production in late January, depriving both countries of a critical revenue stream.
Talks were stalled until two weeks ago when the two sides reached an agreement on citizenship and border demarcation. The agreements - meant to be signed next Tuesday - were seen as positive steps.
But there were early signs the deal might not hold. Both countries have accused each other of supporting rebel groups on either side of the border, though both sides deny the allegations.
Sudan's Minister of Defense Abdel-Rahim Mohamed Hussein recently said that any rebel activity in Sudan's South Kordofan state could cancel the agreements. Sudan is battling the rebel SPLM-North, which until South Sudan's secession was linked to the south's ruling party - the SPLA. The south has said it is not supporting the SPLM-North.
The cancellation of the presidential summit will set north-south relations back, said Aly Verjee, an analyst for the Rift Valley Institute.
"The new fighting unfortunately trumps progress made in recent negotiations. It is unsurprising that talks have been canceled given those events," he said.
Marial said South Sudan is still committed to the presidential summit.
"Our invitation still stands as it is. These are forces within the (ruling) NCP party which don't want this process to continue," he said.
The U.N. refugee agency said Tuesday that it fears for the safety of refugees who have fled the fighting in South Sudan after the violence flared up in recent days. Spokeswoman Melissa Fleming said more than 16,000 people who have fled the Nuba mountains in Sudan are currently living in South Sudan's Yida settlement.
She said the agency wants to move the refugees away from the border where the fighting is taking place.

UPDATE 11-Brent dips; potential oil reserve release weighs

2012-03-28T11:44:00.000+00:00

* Shut Total North Sea platform curbs Forties supply
* Possible U.S. strategic oil release weighs on prices
* Coming up: EIA oil data 10:30 a.m. EDT Wednesday (Adds gasoline, heating oil, trading volume paragraphs 9-10)
By Robert Gibbons
NEW YORK, March 27 (Reuters) - Brent crude prices dipped on Tuesday in tug-of-war trading as market players factored concerns over disrupted supply against the likelihood of a release of U.S. strategic oil reserves to cap rising fuel costs.

U.S. crude futures also saw choppy trading before ending slightly higher.
In early trade, prices for both crude contracts edged higher on reports of production problems in the North Sea and South Sudan. These added to persistent fears about potential disruption of supply from Iran as Tehran and the West spar over the OPEC nation's nuclear program.
Oil prices then turned negative after a Bloomberg report quoted Charles McConnell, assistant secretary for fossil energy at the U.S. Energy Department, as saying a release from reserves "is being considered."
A U.S. government official told Reuters the Obama administration had not changed its stance on tapping the reserves or other options under consideration to help cool fuel prices.
Rising gasoline prices have become a focus of the U.S. presidential race, prompting the White House to seek ways to ease bottlenecks in the U.S. oil network in hopes of lowering pump prices.
Brent May crude slipped 11 cents to settle at $125.54 a barrel, having swung from $124.91 to $126.18.
U.S. crude rose 30 cents to settle at $107.33 a barrel, having moved from $106.52 to $107.73.
U.S. gasoline and heating oil futures ended lower.
Total Brent crude trading volume outpaced U.S. crude turnover, with Brent's just above half million lots traded. Brent dealings were near the 30-day average, but U.S. volume lagged its 30-day average by 41 percent.
Oil prices have jumped more than 15 percent this year on concerns about the potential loss of supply from No. 2 OPEC exporter Iran as the West implemented sanctions aimed at curtailing Tehran's nuclear ambitions.
Brent has stayed mostly in a range between $121 and $127 a barrel since late February, with traders waiting for news that would alter their recent outlook.
"The factors that drove us over $100 are still underpinning the market," said Gene McGillian, analyst for Tradition Energy in Stamford, Connecticut, adding that prices seemed to be consolidating around current levels and could be poised for another move to the upside.
"There seems to be more violence in Sudan, but Iran is probably the primary reason behind the geopolitical price premium in the market."
South Sudan said the air force of neighboring Sudan bombed key oilfields in a cross-border raid on Tuesday, adding to global production fears.
Providing additional support for Brent was news that oil flows through the BP-operated Forties pipeline had been curbed by the shutdown of Total's Elgin platform.
Total shut oil and gas production from its North Sea Elgin platform on Sunday following a gas leak.
U.S. OIL INVENTORIES
U.S. crude stocks rose 3.6 million barrels last week, the American Petroleum Institute (API) said in a weekly report on Tuesday. The increase was more than expected.
U.S. crude futures prices turned slightly lower in post-settlement trading after the API report.
Gasoline inventories rose 1.3 million barrels and distillate stocks fell 1.4 million barrels, the API said.
Crude stocks were expected to have increased by just 2.6 million barrels last week, according to a Reuters survey of analysts ahead of the weekly inventory reports.
Distillate stocks were expected to be near flat, down only 100,000 barrels, and gasoline stocks down 1.3 million barrels, the survey showed.
U.S. average gasoline demand fell 1.5 percent in the week to March 23, from the previous week, MasterCard said in its separate weekly Spending Pulse report. Demand was off 7 percent from the year-ago period, the report said.

Oil falls to near $106 after US crude supply jump

2012-03-28T11:42:00.000+00:00

GAPORE (AP) — Oil prices fell to near $106 a barrel Wednesday in Asia after a report showed a larger-than-expected jump in U.S. crude supplies, suggesting demand remains weak.
Benchmark oil for May delivery was down 84 cents to $106.49 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract was up 30 cents to settle at $107.33 per barrel in New York on Tuesday.

Brent crude for May delivery was down 93 cents at $124.61 per barrel in London.
The American Petroleum Institute said late Tuesday that crude inventories rose 3.6 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 2.8 million barrels.
Inventories of gasoline increased 1.3 million barrels last week while distillates tumbled 1.4 million barrels, the API said.
The Energy Department's Energy Information Administration reports its weekly supply data later Wednesday.
Crude has jumped from $75 in October as signs of an improving U.S. economy bolstered investor confidence. However, crude demand hasn't picked up yet and economists expect consumption could remain tepid with U.S. gasoline prices nearing $4.00 a gallon.
Some analysts forecast weaker economic growth and demand from China, the world's second largest economy, will pull oil prices lower. Capital Economics expects Brent crude to fall to below $100 by the end of the year.
"Perhaps the biggest concerns are the signs of weakness in China," Capital Economics said in a report. "The years of sustained double-digit growth in China's economy are now ancient history and the risks over the next several years, both to growth and commodity demand, lie overwhelmingly on the downside."
In other energy trading, heating oil was down 1.8 cents at $3.22 per gallon and gasoline futures fell 3.6 cents at $3.35 per gallon. Natural gas slid 3.6 cents at $2.17 per 1,000 cubic feet.

UPDATE 2-Oil above $125, supply concerns support

2012-03-28T11:39:00.000+00:00

* U.S. crude inventories expected to rise in weekly reports
* Bernanke comments indicate easy monetary policy to continue (Previous SINGAPORE, updates prices)
By Alex Lawler
LONDON, March 27 (Reuters) - Oil held above $125 a barrel on Tuesday, boosted by supply concerns amid tightening Western sanctions on Iran although expectations for an increase in U.S. crude inventories dampened sentiment.
Tension over Iran and supply disruptions in Syria, South Sudan and Yemen have supported oil prices this year.

On Tuesday, South Sudan said neighbouring Sudan's air force had bombed the main oilfields in Unity state as violence between the two escalated.
Brent crude eased by 11 cents to $125.54 by 1006 GMT after rising as high as $125.88 earlier in the session. U.S. crude was up 19 cents to $107.22.
"The price of oil is likely to continue to find it hard to exceed the $126-a-barrel mark," said Carsten Fritsch, oil analyst at Commerzbank. "This increases the potential for correction if financial investors see themselves forced to take profits. That said, any significant price slump is unlikely in view of the risks to supply."
Oil and other risk assets drew support from comments by the U.S. Federal Reserve on Monday indicating easy monetary policy would remain in place for some time.
Fed Chairman Ben Bernanke said the U.S. economy needs to grow more quickly if it is to produce enough jobs to bring down the unemployment rate and this process can be supported by continued accommodative policies.
Brent crude has risen about 17 percent so far this year on concern about supply disruptions from Iran as well as the actual outages in Syria, South Sudan and Yemen.
Diplomatic sources said on Tuesday Iran and six world powers are expected to resume in the next few weeks long-stalled talks about the Islamic state's disputed nuclear programme.
Closer to home for Brent, Total shut down oil and gas production from its North Sea Elgin platform on Sunday following a gas leak. Oil from the field is exported through the Forties pipeline.
Forties is the largest crude stream underpinning Brent futures and two oil trading sources said Total's Elgin-Franklin site has been providing about 60,000 barrels per day (bpd) to Forties.
Supply reports this week are expected to show a rise in U.S. crude stocks. The first report is due later on Tuesday from the American Petroleum Institute.
A Reuters survey of five analysts produced an average forecast of a 2.8-million-barrel increase. All five forecast a rise in stockpiles. (Additional reporting by Florence Tan and Francis Kan; editing by Jason Neely)

Crude edges up eyeing supply disruptions

2012-03-28T11:37:00.003+00:00

(Reuters) - Crude futures edged higher on Tuesday in tug-of-war trading as investors factored increasing concerns about supply disruptions against the likelihood of a release of strategic oil reserves to cap rising fuel costs.

Prices for both U.S. and Brent crude edged higher on reports of production problems in the North Sea and South Sudan. This added to persistent fears about potential disruption of supply from Iran as Tehran and the West spar over the OPEC nation's nuclear program.
Crude prices turned negative after a Bloomberg report quoted Charles McConnell, assistant secretary for fossil energy at the U.S. Energy Department, as saying a release from reserves "is being considered."
A U.S. government official told Reuters the Obama administration had not changed its stance on tapping the reserves or other options under consideration to help cool fuel prices.
U.S. crude stocks rose 3.6 million barrels last week, the American Petroleum Institute (API) said in a weekly report released after crude prices settled on Tuesday. The increase was more than expected.
Gasoline inventories rose 1.3 million barrels and distillate stocks fell 1.4 million barrels, the API said.
Crude stocks were expected to have increased last week, but only by 2.6 million barrels, according to a Reuters survey of analysts ahead of the weekly inventory reports.
Distillate stocks were expected to be near flat, down only 100,000 barrels, and gasoline stocks down 1.3 million barrels, the survey showed.
FUNDAMENTALS
* On the New York Mercantile Exchange, May crude rose 30 cents, or 0.28 percent, to settle at $107.33 a barrel, having traded from $106.52 to $107.73. Prices dipped in post-settlement trading after the API data.
* U.S. single-family home prices were unchanged in January, suggesting the battered housing market continues to crawl along the bottom, the S&P Case-Shiller survey said.
* Enbridge Inc (ENB.TO) and Enterprise Products Partners LP (EPD.N) will more than double the capacity of the Seaway Pipeline, adding 450,000 barrels per day (bpd) of capacity to the Seaway system and raising its capacity to 850,000 bpd by mid-2014.
* Enbridge also plans to increase the size of its Flanagan South Pipeline from Flanagan, Illinois to Cushing, Oklahoma, to a 36-inch diameter line with an initial capacity of 585,000 bpd.
* India's local oil product sales in February rose an annual 7.3 percent, highest since November, as growth in demand for industrial fuels surged during the month, government data showed. Oil product sales, a proxy for oil demand, totaled 12.34 million tonnes in February.
MARKETS NEWS
* U.S. stocks retreated from near four-year peaks, while a batch of large-cap shares hit new highs, with the help of portfolio managers snapping up top performers near the end of the quarter. .N
* London copper prices ended modestly higher in thinner conditions, failing to build strongly on the prior day's 2-percent rally, as worries about slowing Chinese demand continued to cap bullish sentiment.
UPCOMING DATA/EVENTS
* U.S. Energy Information Administration oil inventory data due at 10:30 a.m. EDT (1430 GMT) on Wednesday.
* U.S. initial jobless claims weekly data due at 8:30 a.m. EDT (1230 GMT) on Thursday.
* U.S. Energy Information Administration natural gas storage data due at 10:30 a.m. EDT (1430 GMT) on Thursday.
SETTLE NET PCT LOW HIGH CURRENT DAY AGO
CHNG CHNG VOL VOL CLc1 107.33 0.30 0.3% 106.52 107.73 196,511 162,276 CLc2 107.85 0.30 0.3% 107.03 108.22 50,298 41,171 LCOc1 125.54 -0.11 -0.1% 124.91 126.18 199,660 128,771 RBc1 3.4056 -0.0110 -0.3% 3.3870 3.4189 18,972 33,183 RBc2 3.3864 -0.0123 -0.4% 3.3689 3.3999 48,107 48,771 HOc1 3.2186 -0.0102 -0.3% 3.2030 3.236 18,814 38,818 HOc2 3.2360 -0.0105 -0.3% 3.2196 3.2526 46,792 55,415
TOTAL MARKET VOLUME OPEN INTEREST
CURRENT Mar 26 30D AVG Mar 26 NET CHNG
CRUDE 381,642 279,275 652,725 1,549,905 1,757
RBOB 132,790 142,811 143,998 380,676 -4,991
HO 116,973 142,809 142,045 290,696 -714

Oil May Drop Next Week on Iran Talks, Survey Shows

2012-03-17T06:25:00.002+00:00

Oil may decrease next week on speculation that strategic crude reserves may be released if prices climb and that talks may ease tension between Iran and the West, a Bloomberg News survey showed.

Seventeen of 32 analysts, or 53 percent, forecast oil will fall through March 23. Eleven respondents, or 34 percent, predicted prices will rise and four estimated there will be little change. Last week, 50 percent of surveyed analysts expected a decline.

President Barack Obama discussed tapping emergency stockpiles with U.K. Prime Minister David Cameron on March 14, Jay Carney, the White House press secretary, said yesterday. The leaders reached no agreement, according to Carney. Oil fell as much as 1.6 percent yesterday after Reuters reported that two people it didn’t name said the countries had decided to cooperate on a supply release.

“The potential of a strategic reserve release is going to remain in traders’ minds for a while, putting a lid on prices,” said John Kilduff, a partner at Again Capital LLC, a New York- based hedge fund that focuses on energy. “We’re in a diplomatic mode at the moment. It looks like the Iran tensions will be reduced in the near term.”

Catherine Ashton, the European Union’s foreign policy chief, said March 6 that world powers are ready to resume talks with Iran over its disputed atomic work. China, France, Germany, Russia, the U.K. and the U.S. said last week that they wanted sustained talks with the Persian Gulf nation.