Headlines
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Bleak economic indicators send crude oil down
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Profit taking weighs on gold
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No clear trend of base metals prices
Brent and Distillates
Oil prices fell on Monday, leading a broader retreat in commodity prices, as fresh economic indicators from China, Japan, the US and Europe showed a gloomy picture for the world economy. Oil prices dropped in spite of heavy snow and cold weather in Europe and signs that the OPEC oil cartel is delivering on its promised production cuts. This morning crude remains steady above 40$/b.
The International Monetary Fund January 28 cut its oil price forecasts for this year and next by 18 $/b to 50$/b in 2009 and 60$/b in 2010, citing "anemic" global growth and the consequent slump in global demand for oil and other commodities.
Japan's oil product sales in December dropped by 7.5%, y/y hitting their lowest level in 23 years for the month, government data showed, as energy demand continues to weaken with a deteriorating economy.
A decline in output of Russia's crude could provide a rare opportunity for foreign firms to gain more access to its energy sector, even though the previous experience still hurts. Speaking at the World Economic Forum in Davos, Prime Minister V. Putin surprised investors by calling for "mutual access" to energy assets to boost greater energy security. He added Russia should not revert to "isolationism".
Speaking in Davos, Mr El-Badri, secretary general of Opec, said that he would urge non-members of OPEC, such as Russia, to join forces with the cartel if previous supply cuts did not balance the market. Nevertheless, Norway is not considering joining any OPEC-led cut in oil production, Energy and Petroleum Minister Terje Riis-Johansen told on Friday.
Striking British oil refinery workers were sitting down Monday for talks with management, nearly a week after walking off the job in protest at the use of foreign workers. Union members at the Lindsey Oil Refinery in northwest England began their strike Wednesday, and workers at other sites across the country began unofficial "wildcat" strikes in support of them. The striking workers accuse Total, the oil company which owns the refinery, of discriminating against British workers by bringing in workers from other EU countries for a major construction project at the site.
Venezuela faces a growing risk of falling crude production in the coming months as oil service companies show signs they may halt key activities over a huge buildup in unpaid bills sparked by tumbling crude prices. A major oil sector slowdown would devastate the nation's economy and force cuts in billions of dollars in social programs that keep leftist President Hugo Chavez popular among Venezuela's poor majority.
ConocoPhillips said earlier this month it planned to slash its 2009 capital expenditure budget by 38%.
