Headlines
-
OPEC meets in Vienna today
-
Gold returns below 950$/oz
-
Base metals mostly lower
Brent and Distillates
Oil climbed near a six-month high on Wednesday, as a jump in U.S. consumer confidence and signs of modest recovery in Japanese exports buoyed hopes that oil demand would rebound as the global economy recovers. Also Thursday’s OPEC meeting supported nervousness on the market.
Saudi Arabian oil minister Ali Naimi was quoted Tuesday saying OPEC would not increase its crude oil production ceiling until it was satisfied oil inventories in consuming nations were back to normal levels, saying stocks currently at 62 days of forward cover were high and should come down, Saudis want them down to a level of 52 to 54 days. Naimi also said that the kingdom considered a price of 75-80 $/b as appropriate to maintain energy investments. Saudi Arabia would continue with its investments and capacity expansion plans in order to maintain its goal of maintaining spare capacity at a level of 1.5-2 mln.b/d in the future.
Japan's crude oil inventories fell 4.5% to 99.53 mln.b to a two-month low last week, despite lower crude runs, indicating slower imports due to weak fuel use amid the economic slowdown, industry data showed on Wednesday.
Japan's crude oil imports dropped 11.1 % in April from a year earlier, the sixth straight month of year-onyear declines, but fell at a lesser rate than March. Japan imported 3.97 mln.b of crude oil last month, the Ministry of Finance said on Wednesday.
The International Energy Agency on Wednesday repeated its warning that reduced investment in energy could result in future supply shortages and a new oil price spike in a few years' time. Between October 2008 and end-April 2009, over 20 planned large-scale upstream oil and gas projects, valued at a total of more than 170 bln.$ and involving around 2 mln.b/d of oil production capacity and 1 bcf/d of gas capacity, were deferred indefinitely or cancelled," it said. A further 35 projects, involving 4.2 mln.b/d of oil capacity and 2.3 bcf/d of gas capacity, had been delayed by at least 18 months, the agency said.
Global energy demand is expected to soar 44% over the next two decades with most of the demand coming from developing countries such as China and Russia, the U.S. government's top energy forecasting agency EIA said on Wednesday. According to the prognosis the crude price could reach 110$/b in 2015 and climb up to 130$ in 2030.
Russia is no longer a welcome guest of OPEC after boosting its production to levels far above those pumped by the group's biggest exporter, Saudi Arabia, and snatching away market share. After flirting with OPEC when a barrel of oil cost less than 40$, Moscow has once more set its course on raising production to support an economy entering its first recession in a decade, leaving OPEC to shoulder the burden of record output cuts.
