Showing posts with label oil. Show all posts
Showing posts with label oil. Show all posts
Friday, 23 July 2010
Sunday, 11 October 2009
Oil & gas sector ripe for upward re-rating
Oil & gas sector ripe for upward re-rating
Tags: Alam Maritim Resources Bhd | Barrow Island | Chevron Corp | enhanced oil recovery | EOR | Exxon Mobil Corp | Gorgon project | Handal Resources Bhd | Jason Yap | Kencana Petroleum Bhd | liquefied natural gas | LNG | O&G | oil and gas sector | OSK Research Sdn Bhd | Petra Group | Petroliam Nasional Bhd | Petronas | Royal Dutch Shell plc | Tanjung Offshore Bhd | Wah Seong Corp Bhd
Written by Chong Jin Hun
Tuesday, 06 October 2009 22:46
KUALA LUMPUR: The Malaysian oil and gas (O&G) sector could be ripe for an upward re-rating in anticipation of support services firms being awarded new contracts by oil majors as demand for crude oil recovers amid an improving global economic landscape.
Valuations for O&G support services firms are deemed attractive at current prices, according to OSK Research Sdn Bhd analyst Jason Yap. He noted that average sector valuations are trading below a price-to-earnings ratio (PER) of 10 times financial year 2010 earnings, compared with a historical PER of between 18 and 20 times.
"Once the tap is turned on and contracts start to flow, the future earnings of local supporting O&G companies would be upgraded and a fundamental upward re-rating on the sector would follow.
"There has been no major O&G contract award in the past one year and we believe these are due anytime now," Yap wrote in a note to clients yesterday.
Yap, who likes O&G firms like ALAM MARITIM RESOURCES BHD [], KENCANA PETROLEUM BHD [] and Wah Seong Corp Bhd, is retaining his outperform call on the sector.
The industry is deemed fairly valued at a higher PER of 11 times, an upgrade from the nine times estimated earlier. The upward revision is in anticipation of new jobs in the pipeline.
O&G support services include fabrication of O&G facilities, pipe coating, installation of pipeline and facilities, engineering, procurement and CONSTRUCTION [] and provision of offshore supply vessels (OSV).
Several global large-scale projects involving local companies are worth noting. These include Australia's Gorgon liquefied natural gas (LNG) project, which includes the construction of an LNG facility with an annual capacity of some 15 million tonnes on Barrow Island, off Western Australia.
The Gorgon LNG initiative, one of the world's largest, is a collaboration among three oil majors — Chevron Corp, Exxon Mobil Corp and Royal Dutch Shell plc. Based on news reports, the initial phase of the project is valued at some A$43 billion (RM132.69 billion).
Malaysian entities including process equipment maker KNM GROUP BHD [] and pipe-coating specialist Wah Seong are among bidders for the job, Yap said, quoting sources.
In Malaysia, Exxon Mobil and Petroliam Nasional Bhd (Petronas) had signed a production-sharing contract to develop seven existing oil fields off the peninsula. These include the Seligi, Guntong, Tapis, Semangkok, Irong Barat, Tabu and Palas fields, which are mostly off the coast of Terengganu.
Both parties had agreed to spend at least US$2.1 billion (RM7.22 billion) on major enhanced oil recovery (EOR) operations, rejuvenation of facilities and further development and drilling activities in the fields.
OSK said potential beneficiaries of the project included OSV players like Alam Maritim, Petra Group and TANJUNG OFFSHORE BHD [], besides crane manufacturer Handal Resources Bhd.
Oil sands projects, which involve companies like KNM, are an area to watch as oil prices gained momentum.
"With oil prices building a new base at US$70 a barrel, we believe it would be a matter of time before oil sands projects, which were previously abandoned owing to unfavourable oil price, are revived," said Yap.
Crude oil prices have more than doubled to US$70 a barrel from about US$30 a barrel early this year. The commodity almost touched US$150 a barrel in the middle of last year. OSK estimated that the commodity would be transacted at between US$70 and US$80 a barrel next year.
"We believe crude oil prices should go up in 2010 in line with a better global economic outlook and spur the award of new O&G projects," Yap said.
While a rise in crude oil prices was often associated with the weakness of the US dollar, Yap said the major driver of crude prices was an anticipation of a recovery in the global economy and higher demand for the hydrocarbon resource.
"Also, there is a very real possibility of a scarcity of oil supply starting from the next few years since most of the oil majors have been holding back the bulk of their capex on new O&G projects in the past one year," Yap said.
Tags: Alam Maritim Resources Bhd | Barrow Island | Chevron Corp | enhanced oil recovery | EOR | Exxon Mobil Corp | Gorgon project | Handal Resources Bhd | Jason Yap | Kencana Petroleum Bhd | liquefied natural gas | LNG | O&G | oil and gas sector | OSK Research Sdn Bhd | Petra Group | Petroliam Nasional Bhd | Petronas | Royal Dutch Shell plc | Tanjung Offshore Bhd | Wah Seong Corp Bhd
Written by Chong Jin Hun
Tuesday, 06 October 2009 22:46
KUALA LUMPUR: The Malaysian oil and gas (O&G) sector could be ripe for an upward re-rating in anticipation of support services firms being awarded new contracts by oil majors as demand for crude oil recovers amid an improving global economic landscape.
Valuations for O&G support services firms are deemed attractive at current prices, according to OSK Research Sdn Bhd analyst Jason Yap. He noted that average sector valuations are trading below a price-to-earnings ratio (PER) of 10 times financial year 2010 earnings, compared with a historical PER of between 18 and 20 times.
"Once the tap is turned on and contracts start to flow, the future earnings of local supporting O&G companies would be upgraded and a fundamental upward re-rating on the sector would follow.
"There has been no major O&G contract award in the past one year and we believe these are due anytime now," Yap wrote in a note to clients yesterday.
Yap, who likes O&G firms like ALAM MARITIM RESOURCES BHD [], KENCANA PETROLEUM BHD [] and Wah Seong Corp Bhd, is retaining his outperform call on the sector.
The industry is deemed fairly valued at a higher PER of 11 times, an upgrade from the nine times estimated earlier. The upward revision is in anticipation of new jobs in the pipeline.
O&G support services include fabrication of O&G facilities, pipe coating, installation of pipeline and facilities, engineering, procurement and CONSTRUCTION [] and provision of offshore supply vessels (OSV).
Several global large-scale projects involving local companies are worth noting. These include Australia's Gorgon liquefied natural gas (LNG) project, which includes the construction of an LNG facility with an annual capacity of some 15 million tonnes on Barrow Island, off Western Australia.
The Gorgon LNG initiative, one of the world's largest, is a collaboration among three oil majors — Chevron Corp, Exxon Mobil Corp and Royal Dutch Shell plc. Based on news reports, the initial phase of the project is valued at some A$43 billion (RM132.69 billion).
Malaysian entities including process equipment maker KNM GROUP BHD [] and pipe-coating specialist Wah Seong are among bidders for the job, Yap said, quoting sources.
In Malaysia, Exxon Mobil and Petroliam Nasional Bhd (Petronas) had signed a production-sharing contract to develop seven existing oil fields off the peninsula. These include the Seligi, Guntong, Tapis, Semangkok, Irong Barat, Tabu and Palas fields, which are mostly off the coast of Terengganu.
Both parties had agreed to spend at least US$2.1 billion (RM7.22 billion) on major enhanced oil recovery (EOR) operations, rejuvenation of facilities and further development and drilling activities in the fields.
OSK said potential beneficiaries of the project included OSV players like Alam Maritim, Petra Group and TANJUNG OFFSHORE BHD [], besides crane manufacturer Handal Resources Bhd.
Oil sands projects, which involve companies like KNM, are an area to watch as oil prices gained momentum.
"With oil prices building a new base at US$70 a barrel, we believe it would be a matter of time before oil sands projects, which were previously abandoned owing to unfavourable oil price, are revived," said Yap.
Crude oil prices have more than doubled to US$70 a barrel from about US$30 a barrel early this year. The commodity almost touched US$150 a barrel in the middle of last year. OSK estimated that the commodity would be transacted at between US$70 and US$80 a barrel next year.
"We believe crude oil prices should go up in 2010 in line with a better global economic outlook and spur the award of new O&G projects," Yap said.
While a rise in crude oil prices was often associated with the weakness of the US dollar, Yap said the major driver of crude prices was an anticipation of a recovery in the global economy and higher demand for the hydrocarbon resource.
"Also, there is a very real possibility of a scarcity of oil supply starting from the next few years since most of the oil majors have been holding back the bulk of their capex on new O&G projects in the past one year," Yap said.
Monday, 15 June 2009
CRB Index
While you can choose your own selection of commodities, it is probably easier to use an existing index. The most watched indicator index is known as the CRB index.
Future and options on the CRB index are traded on the New York Board of Trade. It is made up of different categories of commodities:
Because it covers such a diverse range of materials, its movements will mask moves in the individual components, and smooth out the supply problems. Obviously, there are many other commodities which are not included int he CRB index.
Alternative methods
As an alternative to trading an index on an exchange, there are a number of different ways to trade commodities - apart from keeping silos full of corn in your backyard.
Related posts:
Buying commodities. When?
Trade in a basket of commodities
CRB Index
Long periods of high growth and high inflation are rare
The recent commodity story has been all about China
Warning: Watch out for US dollar exposure in commodities trading
Future and options on the CRB index are traded on the New York Board of Trade. It is made up of different categories of commodities:
- Energy: crude oil, heating oil, natural gas
- Grains: corn, soybean, wheat
- Industrials: cotton, copper
- Livestock: cattle, hogs
- Precious metals: gold, platinum, silver
- Softs: cocoa, coffee, orange juice, sugar
Because it covers such a diverse range of materials, its movements will mask moves in the individual components, and smooth out the supply problems. Obviously, there are many other commodities which are not included int he CRB index.
Alternative methods
As an alternative to trading an index on an exchange, there are a number of different ways to trade commodities - apart from keeping silos full of corn in your backyard.
- You can also invest in companies, such as steel companies or oil companies, which you feel will benefit from higher prices of their products.
- Or you can even go a step bigger, and buy into the currencies of countries which have a lot of natural resources.
Related posts:
Buying commodities. When?
Trade in a basket of commodities
CRB Index
Long periods of high growth and high inflation are rare
The recent commodity story has been all about China
Warning: Watch out for US dollar exposure in commodities trading
Friday, 13 February 2009
Opportunity Knocks: Has the oil price bottomed?
Opportunity Knocks: Has the oil price bottomed?
Few areas have escaped the stock market down turn – some have performed worst than others. The price of oil has fallen from a peak of $147 to around the $40 mark which could be throwing up a buying opportunity.
By Paul Farrow
Last Updated: 9:44AM GMT 13 Feb 2009
The oil price has fallen from a peak of $147 to around $44 a barrel Photo: BLOOMBERG NEWS
The financial crisis has left many assets and sectors battered and bruised. The stock market is down by more than 30pc over the past year. The global economy is on its knees but history suggests that equity markets will begin their recovery before GDP figures start to show strength again.
Investors who will gain the most will be those with either the nous or the brass neck to get in early. There are some fund managers that reckon that the fall in the oil price could open such an opportunity. The question is whether those investing in the sector now are jumping the gun?
Oil reached a peak of just under $150 a barrel last year – today it stands at jaround $40. The demand that pushed the price to record highs has slumped as many global economies have slowed. Some analysts are reticent to suggest how long the global recession will last, but when the stimulus injected by central banks begins to filter through the demand for oil will pick up.
Several already believe that investors should start to look at oil – they do not say the price has bottomed or a spike in the price is imminent, but they reckon that a floor cannot be too far away.
Demand for oil has collapsed because of the very weak economic conditions, and the price of oil has fallen as a result. Production is also falling – non-OPEC production peaked last year and is now on the decline.
This week, crude fell after the US Energy Information Administration revised down its 2009 global oil demand forecast by 400,000 barrels per day from its previous outlook, predicting demand will fall by 1.17 million bpd this year from 2008 levels. US crude stands at around $34 a barrel. London Brent stands at $45 a barrel.
But Killik, the stockbrokers sent a note to investors reckoning the "momentum is negative and crude is approaching oversold levels – short-term traders should go long at current levels with a tight stop loss'.
Mick Gilligan, an analyst at Killik says the price of oil is wrong in the medium term and says that his clients are buying exchange traded funds to benefit from the low price – particularly US oil which is lower than the price of Brent crude.
Chris Wheaton, Director, RCM, the specialist equity company of Allianz Global Investors, says: "Oil has been included in the January sales. Even if oil is only $50/barrel in 2010 it makes for a great investment opportunity right now. Low prices are encouraging more energy use – for example, gasoline demand in the US is now at the same level it was last year despite all the talk of a weak US economy. Sometime in 2009 or early 2010 we expect oil demand across the world to start to grow again.
"The credit crunch and uncertainty over oil prices are causing investment in new oil fields to be put on hold. However the big trends, such as rising energy use across emerging markets and natural declines in existing oil production won't disappear and will continue to push oil prices higher. This means were certainly going to have $100/barrel oil again by 2013, and makes longer-term investments in energy at today's prices look very attractive."
Robin Batchelor manager of the Blackrock World Energy fund says that both oil and gas prices are trading below their marginal costs, which are unsustainable for any reasonable time frame – but he admits that economic woes do raise concerns on the demand side of the equation.
He says:"However, energy equities are trading at P/E multiples at a discount to the broader market and are generally supported by asset valuations. Almost all the companies in the portfolio are well-capitalised and generating cash. At some point in the relatively near future, we believe fundamental factors will regain their importance as investors again return to traditional valuation techniques."
Gary Dugan, Chief Investment Officer, EMEA, Merrill Lynch GWM, reckons that for those who want to trade oil, we are very close to buying levels – anything below $35 is a buying opportunity.
He says: "When the oil price starts to move towards $30 a barrel it starts to cost more to extract oil than producers can get by selling it, so production facilities get shut down as they become uncommercial. We expect the annual production of oil to fall by as much as 5pc a year over the next five years, which should create a floor for the oil price. We believe that oil will bottom out at around $30, and will average between $40 and $45 over the course of 2009, subsequently rising to around $55-60."
But before investors rush to get a piece of the action, there are some who are not so sure now is the time.
Ian Henderson, who manages the JPMorgan Natural Resources Fund, is not convinced that now is the ideal time to invest in oil related plays – mainly due to the uncertainty of the US, which he says will dictate sentiment. He continues to bet on gold which makes up the lionshare of his portfolio at this juncture.
"The long-term view remains in tact but there is so much global uncertainty. But there are dozens of cargo ships floating around refineries because demand for oil is weak -there is plenty of oil floating around – it could be that we will have to wait until that is through the system before the price rises," he says. "However, many oil companies have strong balance sheets having been buoyed by the high price in the past which makes some oil stocks a useful hold for those looking for dividends – although so too do the likes of Vodafone and Glaxo."
For investors wanting to take advantage of any future rises in the price of oil, there are a number of choices. You could invest directly in the shares of the oil majors and production and service companies. Other options include investing in funds that look at the oil sector (Guinness Global Energy, JPM Natural Resources, Investec Energy), or in an exchange-traded fund, which is an investment vehicle that holds assets such as stocks or bonds.
Oil shares do not move directly in line with the oil price because there are other factors at work such as management skill, debt and the costs of distribution. However, there is a correlation over the longer term and they are paying decent dividends.
Remember that oil stocks in the UK make up a significant chunk of the FTSE100 so any tracker fund or General UK Growth fund that does not veer too much away from the index will benefit from any pick up in demand for oil – and those bumper dividend payments.
http://www.telegraph.co.uk/finance/personalfinance/investing/4609834/Opportunity-Knocks-Has-the-oil-price-bottomed.html
Few areas have escaped the stock market down turn – some have performed worst than others. The price of oil has fallen from a peak of $147 to around the $40 mark which could be throwing up a buying opportunity.
By Paul Farrow
Last Updated: 9:44AM GMT 13 Feb 2009
The oil price has fallen from a peak of $147 to around $44 a barrel Photo: BLOOMBERG NEWS
The financial crisis has left many assets and sectors battered and bruised. The stock market is down by more than 30pc over the past year. The global economy is on its knees but history suggests that equity markets will begin their recovery before GDP figures start to show strength again.
Investors who will gain the most will be those with either the nous or the brass neck to get in early. There are some fund managers that reckon that the fall in the oil price could open such an opportunity. The question is whether those investing in the sector now are jumping the gun?
Oil reached a peak of just under $150 a barrel last year – today it stands at jaround $40. The demand that pushed the price to record highs has slumped as many global economies have slowed. Some analysts are reticent to suggest how long the global recession will last, but when the stimulus injected by central banks begins to filter through the demand for oil will pick up.
Several already believe that investors should start to look at oil – they do not say the price has bottomed or a spike in the price is imminent, but they reckon that a floor cannot be too far away.
Demand for oil has collapsed because of the very weak economic conditions, and the price of oil has fallen as a result. Production is also falling – non-OPEC production peaked last year and is now on the decline.
This week, crude fell after the US Energy Information Administration revised down its 2009 global oil demand forecast by 400,000 barrels per day from its previous outlook, predicting demand will fall by 1.17 million bpd this year from 2008 levels. US crude stands at around $34 a barrel. London Brent stands at $45 a barrel.
But Killik, the stockbrokers sent a note to investors reckoning the "momentum is negative and crude is approaching oversold levels – short-term traders should go long at current levels with a tight stop loss'.
Mick Gilligan, an analyst at Killik says the price of oil is wrong in the medium term and says that his clients are buying exchange traded funds to benefit from the low price – particularly US oil which is lower than the price of Brent crude.
Chris Wheaton, Director, RCM, the specialist equity company of Allianz Global Investors, says: "Oil has been included in the January sales. Even if oil is only $50/barrel in 2010 it makes for a great investment opportunity right now. Low prices are encouraging more energy use – for example, gasoline demand in the US is now at the same level it was last year despite all the talk of a weak US economy. Sometime in 2009 or early 2010 we expect oil demand across the world to start to grow again.
"The credit crunch and uncertainty over oil prices are causing investment in new oil fields to be put on hold. However the big trends, such as rising energy use across emerging markets and natural declines in existing oil production won't disappear and will continue to push oil prices higher. This means were certainly going to have $100/barrel oil again by 2013, and makes longer-term investments in energy at today's prices look very attractive."
Robin Batchelor manager of the Blackrock World Energy fund says that both oil and gas prices are trading below their marginal costs, which are unsustainable for any reasonable time frame – but he admits that economic woes do raise concerns on the demand side of the equation.
He says:"However, energy equities are trading at P/E multiples at a discount to the broader market and are generally supported by asset valuations. Almost all the companies in the portfolio are well-capitalised and generating cash. At some point in the relatively near future, we believe fundamental factors will regain their importance as investors again return to traditional valuation techniques."
Gary Dugan, Chief Investment Officer, EMEA, Merrill Lynch GWM, reckons that for those who want to trade oil, we are very close to buying levels – anything below $35 is a buying opportunity.
He says: "When the oil price starts to move towards $30 a barrel it starts to cost more to extract oil than producers can get by selling it, so production facilities get shut down as they become uncommercial. We expect the annual production of oil to fall by as much as 5pc a year over the next five years, which should create a floor for the oil price. We believe that oil will bottom out at around $30, and will average between $40 and $45 over the course of 2009, subsequently rising to around $55-60."
But before investors rush to get a piece of the action, there are some who are not so sure now is the time.
Ian Henderson, who manages the JPMorgan Natural Resources Fund, is not convinced that now is the ideal time to invest in oil related plays – mainly due to the uncertainty of the US, which he says will dictate sentiment. He continues to bet on gold which makes up the lionshare of his portfolio at this juncture.
"The long-term view remains in tact but there is so much global uncertainty. But there are dozens of cargo ships floating around refineries because demand for oil is weak -there is plenty of oil floating around – it could be that we will have to wait until that is through the system before the price rises," he says. "However, many oil companies have strong balance sheets having been buoyed by the high price in the past which makes some oil stocks a useful hold for those looking for dividends – although so too do the likes of Vodafone and Glaxo."
For investors wanting to take advantage of any future rises in the price of oil, there are a number of choices. You could invest directly in the shares of the oil majors and production and service companies. Other options include investing in funds that look at the oil sector (Guinness Global Energy, JPM Natural Resources, Investec Energy), or in an exchange-traded fund, which is an investment vehicle that holds assets such as stocks or bonds.
Oil shares do not move directly in line with the oil price because there are other factors at work such as management skill, debt and the costs of distribution. However, there is a correlation over the longer term and they are paying decent dividends.
Remember that oil stocks in the UK make up a significant chunk of the FTSE100 so any tracker fund or General UK Growth fund that does not veer too much away from the index will benefit from any pick up in demand for oil – and those bumper dividend payments.
http://www.telegraph.co.uk/finance/personalfinance/investing/4609834/Opportunity-Knocks-Has-the-oil-price-bottomed.html
Wednesday, 11 February 2009
World oil demand forecast cut
Feb 11, 2009
World oil demand forecast cut
PARIS - THE International Energy Agency cut its forecast again for global oil demand this year on Wednesday, but warned about a future supply crunch because of current low investment levels.
The energy watchdog for industrialised nations forecast that global oil demand would measure 84.7 million barrels per day (bpd) on average in 2009 - 570,000 bpd less than its last forecast made in January.
At this level, demand would be 1.1 percent or 1.0 million bpd less than in 2008, when demand also fell compared with the year earlier.
'Not only will the two-year contraction in oil demand be the first since the early 1980s, but 2009's decline will also be the largest since 1982,' the IEA said in its monthly oil report.
The watchdog, which has been revising down its once-buoyant forecasts for oil demand steadily since the end of last year, said its revisions were based on new economic growth forecasts from the International Monetary Fund.
The IMF slashed its global growth forecast for 2009 at the end of January, saying the financial crisis and spreading economic problems would result in expansion of just 0.5 per cent, its lowest rate since World War II.
The bleak economic environment has pushed oil prices down to below US$40 (S$60) a barrel in recent weeks, far from their peaks of nearly $150 last year, despite production cuts by OPEC oil producers.
The Organisation of Petroleum Exporting Countries (OPEC) has slashed its output in successive decisions to try to support the plunging market.
The IEA, echoing warnings from industry insiders and OPEC members, warned that one of the effects of low prices would be a delay in investment in future capacity which will be needed once global growth picks up again.
'Ultimately, low prices sow the seeds of their own destruction, and only clear signs of a recovering global economy will spur investment in new oil supply,' the report said.
'The danger is that if too much investment slips now, the scale of the price response to resurgent demand could again destabilise the global economy,' it added.
The secretary general of OPE, Abdalla Salem El-Badri, said on Monday that members of the cartel had already postponed 35 oil drilling projects because of low crude prices.
He has said that OPEC members need a price above $50 per barrel for their exports to encourage investment and balance their government budgets.
Many expensive oil projects have been called off in the last 12 months, particularly in Canada's high-cost tar sands, but news that OPEC countries are also reducing investment has sounded an alarm for analysts. -- AFP
http://www.straitstimes.com/Breaking%2BNews/Money/Story/STIStory_337003.html
World oil demand forecast cut
PARIS - THE International Energy Agency cut its forecast again for global oil demand this year on Wednesday, but warned about a future supply crunch because of current low investment levels.
The energy watchdog for industrialised nations forecast that global oil demand would measure 84.7 million barrels per day (bpd) on average in 2009 - 570,000 bpd less than its last forecast made in January.
At this level, demand would be 1.1 percent or 1.0 million bpd less than in 2008, when demand also fell compared with the year earlier.
'Not only will the two-year contraction in oil demand be the first since the early 1980s, but 2009's decline will also be the largest since 1982,' the IEA said in its monthly oil report.
The watchdog, which has been revising down its once-buoyant forecasts for oil demand steadily since the end of last year, said its revisions were based on new economic growth forecasts from the International Monetary Fund.
The IMF slashed its global growth forecast for 2009 at the end of January, saying the financial crisis and spreading economic problems would result in expansion of just 0.5 per cent, its lowest rate since World War II.
The bleak economic environment has pushed oil prices down to below US$40 (S$60) a barrel in recent weeks, far from their peaks of nearly $150 last year, despite production cuts by OPEC oil producers.
The Organisation of Petroleum Exporting Countries (OPEC) has slashed its output in successive decisions to try to support the plunging market.
The IEA, echoing warnings from industry insiders and OPEC members, warned that one of the effects of low prices would be a delay in investment in future capacity which will be needed once global growth picks up again.
'Ultimately, low prices sow the seeds of their own destruction, and only clear signs of a recovering global economy will spur investment in new oil supply,' the report said.
'The danger is that if too much investment slips now, the scale of the price response to resurgent demand could again destabilise the global economy,' it added.
The secretary general of OPE, Abdalla Salem El-Badri, said on Monday that members of the cartel had already postponed 35 oil drilling projects because of low crude prices.
He has said that OPEC members need a price above $50 per barrel for their exports to encourage investment and balance their government budgets.
Many expensive oil projects have been called off in the last 12 months, particularly in Canada's high-cost tar sands, but news that OPEC countries are also reducing investment has sounded an alarm for analysts. -- AFP
http://www.straitstimes.com/Breaking%2BNews/Money/Story/STIStory_337003.html
Sunday, 18 January 2009
Oil prices: The complete Q&A
Oil prices: The complete Q&A
Last Updated: 12:39AM BST 29 May 2008
This article was released at the time when oil price was US $130 a barrel.
http://www.telegraph.co.uk/finance/newsbysector/energy/2790667/Oil-prices-The-complete-QandampA.html
Paul Mortimer Lee, global head of market economics at BNP, and strategist Dominic Bryant explains why the oil price matters to us all.
Oil price Q&A:
Who are the winners and losers?
Who consumes all the oil?
Why is the oil price spiking now?
Where is the oil price going?
Is there really a shortage of supply?
What are oil futures and how are they traded?
Who are the winners and losers?
Who consumes all the oil?
Why is the oil price spiking now?
Where is the oil price going?
Is there really a shortage of supply?
What are oil futures and how are they traded?
Oil price comment:
Alan Duncan: Asking Opec to solve the oil crisis misses the burning point
Liam Halligan: $100-plus oil will be here for years as China motors ahead
Louise Armitstead: Slick investors strike riches as they cash in on peak oil
Mark Kleinman: Credit crisis was crude compared with this oil price surge
Dan Roberts: Cheap oil is history. But why?
Alan Duncan: Asking Opec to solve the oil crisis misses the burning point
Liam Halligan: $100-plus oil will be here for years as China motors ahead
Louise Armitstead: Slick investors strike riches as they cash in on peak oil
Mark Kleinman: Credit crisis was crude compared with this oil price surge
Dan Roberts: Cheap oil is history. But why?
Monday, 17 November 2008
World oil prices sink below 60 dollars on recession fears
Agence France-Presse - 11/7/2008 2:48 AM GMT
World oil prices sink below 60 dollars on recession fears
World oil prices sank below 60 dollars in Asian trade Friday, with the market gripped by worries energy demand would be hit by a global economic downturn, dealers said.
New York's main contract, light sweet crude for December delivery briefly traded below the 60-dollar level at 59.97 dollars, its lowest level since March 2007, but later regained some ground to trade at 60.52 dollars.
The New York contract closed Thursday 4.53 dollars lower at 60.77 dollars.
Brent North Sea crude for December delivery was off 81 cents to 56.62 dollars a barrel from Thursday's close of 57.43 dollars.
Fears of a sharp global downturn intensified after the International Monetary Fund said Thursday that advanced economies would contract in 2009 for the first time since World War II.
In sharp downward revisions to its last economic projections made less than a month ago, the IMF said advanced economies would now shrink by 0.3 percent in 2009. The organisation had previously predicted a 0.5 percent growth.
Oil prices have plunged from record highs above 147 dollars a barrel in July on worries that slowing global growth, especially in the United States, would hit energy demand.
The United States is the world's biggest energy user.
"The big issue that remains a drag on investor sentiment is the parlous state of the global economy," said analysts from State Street Global Markets, the investment research and trading arm of US financial services provider State Street Corporation.
"This slowdown will spare no part of the globe," they said in a report.
On Thursday, the European Central Bank (ECB) and the Bank of England (BoE) were the latest to slash interest rates in a bid to shore up flagging economies following similar moves by Asian central banks and the US Federal Reserve.
The ECB cut its main lending rate by half a percentage point to 3.25 percent while the Boe slashed its key lending rate by a record 1.5 percentage points to 3.0 percent -- the lowest level in more than half a century -- as Britain heads towards recession.
Analysts said the sharp interest rate cuts by the BoE could indicate things were even worse than previously thought.
"The fear is now that the situation could be much more dire than first perceived," said Joshua Raymond, market strategist at City Index.
The British economy is on the verge of a recession after contracting in the third quarter for the first time since 1992. The European Commission forecast this week a similar fate awaited the 27-nation European Union by year's end.
Meanwhile, the International Energy Agency said Wednesday that it expected the price of oil to rebound above 100 dollars and eventually reach 200 dollars by 2030.
In a report on the global energy outlook, the agency said the price would average 100 dollars a barrel from 2008 to 2015.
burs-bh
http://news.my.msn.com/regional/article.aspx?cp-documentid=1774126
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Agence France-Presse - 11/6/2008 6:35 AM GMT
World oil prices extend losses on demand worries
World oil prices extended losses in Asian trade Thursday on concerns that demand is weakening in the United States, the world's biggest energy user, dealers said.
New York's main contract, light sweet crude for December delivery was off 74 cents to 64.56 dollars from its close of 65.30 dollars in the United States Wednesday. The contract fell 5.23 dollars Wednesday.
Brent North Sea crude for December delivery eased 73 cents to 61.14 dollars a barrel from 61.87 dollars. It dropped 4.57 dollars Wednesday.
Latest data released Wednesday by the US Department of Energy (DoE) showed US gasoline stockpiles jumped 1.1 million barrels in the week ended October 31, confounding market expectations for a drop of 600,000 barrels.
The DoE said crude reserves held steady instead of rising the 1.2 million barrels forecast by analysts.
US energy demand continued to decline. Americans consumed 6.7 percent less crude in the past four weeks compared with the same period a year ago, the government data showed.
"It's very difficult to sustain price rallies, especially since the demand deterioration theory is still intact," Jim Ritterbusch, president of the oil trading advisory firm Ritterbusch and Associates, was quoted as saying by Dow Jones Newswires.
Crude prices have more than halved since hitting record levels of above 147 dollars in July on concerns about the faltering global economy.
Members of the Organisation of Petroleum Exporting Countries, which pumps about 40 percent of the world's oil, have started to cut output in November as part of the cartel's plans to shore up prices.
The cartel announced in an emergency meeting last month it would cut output by 1.5 million barrels a day to 27.3 million bpd from November.
burs-bh/jw
http://news.my.msn.com/regional/article.aspx?cp-documentid=1742238
World oil prices sink below 60 dollars on recession fears
World oil prices sank below 60 dollars in Asian trade Friday, with the market gripped by worries energy demand would be hit by a global economic downturn, dealers said.
New York's main contract, light sweet crude for December delivery briefly traded below the 60-dollar level at 59.97 dollars, its lowest level since March 2007, but later regained some ground to trade at 60.52 dollars.
The New York contract closed Thursday 4.53 dollars lower at 60.77 dollars.
Brent North Sea crude for December delivery was off 81 cents to 56.62 dollars a barrel from Thursday's close of 57.43 dollars.
Fears of a sharp global downturn intensified after the International Monetary Fund said Thursday that advanced economies would contract in 2009 for the first time since World War II.
In sharp downward revisions to its last economic projections made less than a month ago, the IMF said advanced economies would now shrink by 0.3 percent in 2009. The organisation had previously predicted a 0.5 percent growth.
Oil prices have plunged from record highs above 147 dollars a barrel in July on worries that slowing global growth, especially in the United States, would hit energy demand.
The United States is the world's biggest energy user.
"The big issue that remains a drag on investor sentiment is the parlous state of the global economy," said analysts from State Street Global Markets, the investment research and trading arm of US financial services provider State Street Corporation.
"This slowdown will spare no part of the globe," they said in a report.
On Thursday, the European Central Bank (ECB) and the Bank of England (BoE) were the latest to slash interest rates in a bid to shore up flagging economies following similar moves by Asian central banks and the US Federal Reserve.
The ECB cut its main lending rate by half a percentage point to 3.25 percent while the Boe slashed its key lending rate by a record 1.5 percentage points to 3.0 percent -- the lowest level in more than half a century -- as Britain heads towards recession.
Analysts said the sharp interest rate cuts by the BoE could indicate things were even worse than previously thought.
"The fear is now that the situation could be much more dire than first perceived," said Joshua Raymond, market strategist at City Index.
The British economy is on the verge of a recession after contracting in the third quarter for the first time since 1992. The European Commission forecast this week a similar fate awaited the 27-nation European Union by year's end.
Meanwhile, the International Energy Agency said Wednesday that it expected the price of oil to rebound above 100 dollars and eventually reach 200 dollars by 2030.
In a report on the global energy outlook, the agency said the price would average 100 dollars a barrel from 2008 to 2015.
burs-bh
http://news.my.msn.com/regional/article.aspx?cp-documentid=1774126
--------
Agence France-Presse - 11/6/2008 6:35 AM GMT
World oil prices extend losses on demand worries
World oil prices extended losses in Asian trade Thursday on concerns that demand is weakening in the United States, the world's biggest energy user, dealers said.
New York's main contract, light sweet crude for December delivery was off 74 cents to 64.56 dollars from its close of 65.30 dollars in the United States Wednesday. The contract fell 5.23 dollars Wednesday.
Brent North Sea crude for December delivery eased 73 cents to 61.14 dollars a barrel from 61.87 dollars. It dropped 4.57 dollars Wednesday.
Latest data released Wednesday by the US Department of Energy (DoE) showed US gasoline stockpiles jumped 1.1 million barrels in the week ended October 31, confounding market expectations for a drop of 600,000 barrels.
The DoE said crude reserves held steady instead of rising the 1.2 million barrels forecast by analysts.
US energy demand continued to decline. Americans consumed 6.7 percent less crude in the past four weeks compared with the same period a year ago, the government data showed.
"It's very difficult to sustain price rallies, especially since the demand deterioration theory is still intact," Jim Ritterbusch, president of the oil trading advisory firm Ritterbusch and Associates, was quoted as saying by Dow Jones Newswires.
Crude prices have more than halved since hitting record levels of above 147 dollars in July on concerns about the faltering global economy.
Members of the Organisation of Petroleum Exporting Countries, which pumps about 40 percent of the world's oil, have started to cut output in November as part of the cartel's plans to shore up prices.
The cartel announced in an emergency meeting last month it would cut output by 1.5 million barrels a day to 27.3 million bpd from November.
burs-bh/jw
http://news.my.msn.com/regional/article.aspx?cp-documentid=1742238
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