Headlines
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Brent lower due to decreasing economic growth sentiment
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Gold eases below 925 $/oz
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China’s purchases influence base metals market
Brent and Distillates
On Monday Brent was hit by decreasing global economic growth sentiment, but WTI rose over 2.5% to near $47 a barrel, extending the previous session's gains due to worries that OPEC would cut output again at this month's meeting.
Six months after OPEC started cutting oil output in response to the unfolding economic crisis, its efforts may have sufficiently tightened the market and lessened the need for a further curb. While the economic outlook has depressed equities markets and kept a lid on crude oil futures at around 45$/b, the picture in physical oil markets is not so bearish.
OPEC will cut its 2009 oil demand forecast this week, the group's secretary general said on Monday, a move that may support calls from some members for further supply curbs at a meeting on Sunday. OPEC expects the slowing global economy may need a 1 mln.b/d less oil than the producer group forecast a month ago, Abdullah al-Badri told reporters. Badri, who has previously said OPEC may lower supply further when it meets in Vienna, reiterated that an additional curb was among its choices but all options are on the table.
Saudi Arabia surprised its Asian oil customers by telling them it would maintain or even increase crude supplies next month, in another sign that OPEC's most influential member will urge the cartel to refrain from further output cuts when it meets this weekend.
Output at Nigeria's Bonny Light crude terminal, operated by Royal Dutch Shell, has ramped up to around 200 kb/d. Production was cut to around 90 kb/d three weeks ago because of security concerns in the Niger Delta.
The world would get a 1000 bil.$ economic stimulus if oil prices stay at around 40 $/b through 2009, the head of the IEA told last week. IEA Executive Director Nobuo Tanaka warned of a possible repeat of last year's record high oil prices by 2013 if producers did not invest in new supplies.
The IEA also warned OPEC that higher oil prices would slow the global economic recovery and the cartel should consider those repercussions before deciding whether to deepen output cuts at its next meeting March 15.
China has filled its first 100 mln.b. of onshore emergency crude oil tanks and the government should use some of its foreign exchange reserves on floating storage, an industry executive said on Monday. The publication of China's strategic oil reserve levels indicated that the world's No. 2 energy user has been making good use of oil's price fall to boost supplies while demand falters.
Exxon Mobil is in constant dialogue with Baghdad to create the investment climate that would allow it to become a significant player in Iraq's energy sector. Low oil and energy prices have had not impacted Exxon's spending plans as the company takes investment decisions with a long-term perspective. Exxon said last week it would spend about 29 bln.$ in 2009, the upper end of its five-year annual spending target of 25 bln to $30 bln.$/y.
Refined products shipments from Russia's Baltic port of St Petersburg are seen rising this year, helped by the rouble's devaluation. Petersburg Oil Terminal (PNT), the largest refinery product outlet in St Petersburg and the sole oil port to operate in winter months, is expected to exceed last year's shipments of 11.8 mln.t.
