Headlines
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Gold rallies as alternative investment today
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Weak Japanese GDP weights on base metals price
Brent and Distillates
Brent oil hung below 44$/b and WTI returned to 37$/b on Monday as bleak economic indicators in Asia returned focus to the worldwide oil demand slump and investors sought further directions ahead of the signing of a U.S. stimulus package this week.
OPEC said February 13 its latest crude output cuts appeared to have halted the steep decline in oil prices but warned that growing consumer and industry stockpiles were likely to keep markets unstable, especially as demand for oil continues to weaken in the second quarter. The oil cartel gave conflicting clues in its latest Monthly Oil Market Report as to whether a new cut might be on the cards when ministers meet on March 15 in Vienna. On the one hand, its estimates of January production at 28.71 mln. b/d are below the 29.2 mln. b/d it sees as the call on OPEC oil for 2009 as a whole and in line with the 28.75 mln.b/d for the second quarter call. But OPEC also expressed deep concern about rising inventories, including oil held in floating storage.
IEA warned that the global oil market could face another “serious supply crunch” from 2010 as oil producers have delayed investment projects due to the current weak state of demand. IEA also added that the collapse in oil prices and global economic recession were slowing investment in alternative energy sources such as renewables and nuclear.
China aims to produce 192 mln.t of crude oil in 2009, up 1.2 % from last year, the China Petroleum Daily said on Monday. The paper also said that in addition to the 2009 crude production goal, equivalent to 3.84 mln.b/d, Beijing had set 2010 and 2011 targets of 196 mln.t and 198 mln.t, respectively.
Venezuela will join other OPEC members and will support a production cut at OPEC's meeting in March if needed but does not see a need for an extraordinary meeting by the group, Oil Minister Rafael Ramirez told during the last weekend.
Shell has been forced to shut in about 180,000 b/d of oil production in Nigeria due to security problems in the southern oil-rich Niger Delta. The closure means revenue losses for Nigeria, which depends on crude exports for more than 90% of its foreign income.
Russian oil firm TNK-BP, half-owned by BP, will cut 2009 capital expenditure by about 10% from a planned 3.3 mld.$ and aims to keep output flat this year. That capex plan already represented a 27% cut from 2008's investment of 4.4 mld.$, in response to low oil prices.
