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Stronger greenback and G20 weight on gold
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Brent and Distillates
Crude oil started the week firmer, hitting its highest level in more than four months in Europe amid a soft dollar. However, later on weakness in stock markets translated into selling pressure in crude and commodity markets as a whole.
OPEC may be able to live with oil prices around 50$/b in 2009, its Secretary General said last week, another sign the group has limited its price aspirations for now because of the weak economy. The comments are the first indication from OPEC of how long it can withstand oil at 50$/b, below the 70-$75 many in OPEC and the oil industry say is needed to encourage investment in new supply.
If oil does not drop, also Saudi Arabia appears unlikely to seek another output cut at OPEC's meeting in May even though prices are a long way short of Riyadh's stated 75$/b price target.
Saudi Arabia cut the official selling price for Arab Light crude in May to refiners globally for the first time in five months, state oil firm Saudi Aramco said on Sunday. The country lowered the Arab Light price for customers in the Far East by 10 USc to the Oman/Dubai average plus 80 USc/b.
The IEA is likely to lower its global oil demand forecasts significantly as more bleak economic data emerges, its chief said last Thursday. The possibility for downward revision will be high, Nobuo Tanaka, the agency's executive director, told Reuters in an interview on the sidelines of a Paris conference.
U.S. crude oil imports in January increased by 433 kb/d, i.e. 4.6%, from the month before to 9.852 mln.b/d, but it was still the lowest January import level since 2006, according to EIA. However, the imports were down 148 kb/d, or 1.5 %, from 10 mln.b/d a year ago, but the highest for any month since last November.
Nigeria's oil production, including condensates and natural gas liquids, stood at 1.9 mln./d in January, down 300kb/d from December's output of 2.2 mln.b/d, the country's central bank said Monday. The country has an installed production capacity of 3.2 mln.b/d, but violence in the main producing region, the Niger Delta, has reduced Nigeria's output to far below its potential. The bank said that due to lower output coupled with the fall in global oil prices, Nigeria's oil income dropped 19.2% to 1.85 bln.$ in January, down from 2.29 bln.$ in the preceding month.
Sinopec signed a 350 mln.$ drilling deal with Kuwait last week, and vowed to work more with the country on new joint ventures and crude oil trading, the company's official publication said.
