Headlines
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Stronger dollar and weaker crude ease gold
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Base metals correct previous gains
Brent and Distillates
On Monday Brent slipped towards 40$/b and WTI below this level, as investors grew more pessimistic about energy demand on predictions that the world economy will slowdown sharply.
Russian cuts in gas to Europe via Ukraine have forced some of its neighbours to switch to burning fuel oil in power plants, but traders say even that has not revived an oversupplied European market for the product.
Saudi Arabia will deepen its supply cuts in February from January levels to Asian consumers to their lowest in almost five years, as it tries to support oil prices. The cut may reach up to 300 kb/d below its OPEC target. Several Asian buyers have confirmed that Saudi Arabia had informed them that less crude would be delivered in February than in January, with some of the cuts to customers rising to 15 %.
OPEC's most influential member has lowered supply this month to 8 mln.b/d, meeting its target under OPEC's pact to reduce overall production. But strict Saudi’s discipline has failed to boost oil prices--which at close to 40 $ are far from the 75 $/b named by Saudi King Abdullah as a fair price.
The average price for a gallon of gasoline in the U.S. has risen for the first time since early July, indicating the bottom has likely been hit, according to the nationwide Lundberg survey released on Sunday. The national average for self-serve, regular unleaded gasoline rose to 1.7793 $ on Jan. 9, up some 11.71 USc from the survey conducted three weeks earlier by the poll of 5,000 gas stations in metropolitan areas.
Top Chinese oil firm CNPC processed 125 mln.t of crude oil in 2008, i.e. 2.5 mln.b/d, an executive said last week. The 2.7 % annual increase was well off the 5.1% pace in 2007, when it processed 121.73 mln.t or 2.43 mln.b/d.
In January China's top refineries will reduce production to the lowest in 2.5 years after sizable cuts in the past two months, due to weak fuel demand during the economic slowdown. Twelve major plants accounting for more than a third of China's capacity, most of them on the eastern and southern seaboards, plan to process 2.24 mln.b/d of crude in January, the lowest since August 2006, as a Reuters poll showed. However, the country imported 14.37 mln.t of crude oil in December, i.e. 3.38 mln.b/d. The amount would be 11.6 % higher than a year earlier, and 4% higher than in November 2008 on a daily basis, according to a Reuters calculation.
China's net diesel exports rose to the highest in almost 3,5 years in January despite refineries producing at multi-year lows, as fuel demand suffered from the economic slowdown, trade estimates showed. The country is seen exporting some 210kt of diesel this month and skipping imports for the second month running, which will peg net exports at 50.5 kb/d.
Jet fuel inventories in independent oil storage in the Amsterdam-Rotterdam-Antwerp hub rose over the last week 2008 to their highest ever level due to an increase in imports amid lower demand from airlines. Jet fuel inventories totalled 822 kt, up from 685 kt in previous week.
