Headlines
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Gold still stays above 900$/oz despite stronger dollar
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Base metals slip across the board
Brent and Distillates
Oil prices fell over 2% towards 50$/b, paring some of the previous session's gains on fears of a global flu pandemic that could give the world economy another knock.
IEA is unlikely to further downgrade its global oil demand forecasts as the latest bleak economic outlook by the IMF is in line with its projections, the head of the agency Nobuo Tanaka said on Saturday. On April 10, the Paris-based IEA projected world oil demand to drop by 2.4 mln.b/d in 2009, a big reduction from its previous monthly forecast for a 1.25 mln.b/d drop. It cited a growing consensus that economic recovery will not take place until next year.
Crude price of 50 $/b is too low for OPEC producers to invest in production and non-member countries, including Russia, should cut output to help boost prices, OPEC's secretary general said on Sunday. Asked at a news conference during a visit to Algeria about the prospect of further output cuts at OPEC's next meeting on May 28, al-Badri said: "It depends on the economic situation, but if we face any problem OPEC will not hesitate to take any further decision to stabilise the market." He also mentioned that OPEC members' compliance with output cuts is excellent but the organisation still needs to remove 722 kb/d of crude from the market to ensure full compliance.
On the contrary Middle East OPEC members at a meeting with Asian oil consumer countries said they were satisfied with oil at 50$/b or less while the economy was on the mend. That suggests Gulf producers may push OPEC to maintain a moderate stance when the group next meets to decide output policy.
Low crude prices irritate also Russia. Prices of around 50 $/b are not high enough to ensure exploration and production, crude prices should rise to 70-80$ within 12-18 months, Russian Energy Minister Sergei Shmatko said last week.
Libya expects oil production to reach 3 mln.b/d by 2012, its top oil official was quoted as saying by the United Arab Emirates state news agency (WAM). Shokri Ghanem confirmed output would reach 2 mln.b/d this year, according to WAM.
Nigerian crude oil exports will exceed its implied OPEC production target in June with shipments averaging 1.83 mln.b/d, against 1.82 mln. scheduled for May, trade sources said on Monday. OPEC has set Nigeria an implied production target of 1.67 mln.b/d that came into effect on Jan. 1.
Japanese Nippon Oil was likely to refine around 6 % less crude oil in May than it did a year earlier, marking a seventh straight month of declines, reflecting slow domestic demand amid the recession.
