Headlines
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Equity markets and Iran’s missile tests prevent crude from further decline
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Gold hovers near to 1000 $/oz level
Brent and Distillates
On Tuesday crude oil held steady around 67$/b after climbing more than 1 % a day ago, boosted by strong equities markets and Iran's missile tests, but gains were moderated by expected builds in U.S. fuel stocks.
The previous day’s oil price rally invoked the drop in floating storage to about 50-60mln.b, down from a record 100-120mln.b in April as reinvigorated demand reduces the financial incentive to keep the commodity in tankers offshore. The decline signals somewhat stronger demand, however, it has been capping prices in the short term.
The world's largest economies (G20) agreed on Friday to phase out subsidies for oil and other carbon dioxide-spewing fossil fuels in the "medium term" as part of efforts to combat global warming.
The consensus forecast from a Reuters poll of more than 30 analysts is for U.S. crude to average 73.46$/b in 2010, up modestly from 73.39$/b estimated in August's poll.
Japan's imports of crude oil hit their lowest for the month of August in 20 years, sliding 12.4 % from a year earlier and reflecting weak demand. Japan, the world's third-biggest oil consumer, imported 3.62 mln.b/d of crude oil last month, preliminary Ministry of Finance data showed.
While the rest of U.S. tries to limit oil imports from long distances, California appears to have no choice but to increase them. Demand at California's refineries will pull crude from new locales as once-prolific output from within the state and Alaska declines and China boosts its demand for crude from suppliers like Ecuador and Canada.
Chinese state-owned oil company CNOOC is in talks with Nigeria to buy large stakes in some of the richest oil blocks in the world, the Financial Times reported today. The value of the potential deal was not disclosed, but details suggested a figure of around 30bln.$.
Hugo Chavez, president of Venezuela, expects oil prices to stabilize at a level of at least 80 $/b by early next year. Chavez also told Reuters that there was "plenty of oil on the market." Asked if he thought OPEC should cut production, he said no, because the oil producing group had already cut production and prices were stabilizing.
Foreign investment in Venezuela's petrochemicals industry, which has come under increased state control, is lagging because of the global recession, an official at the country's state-run company said. President Hugo Chavez stepped up the state's role in the industry this year, pushing a law giving the government a minimum 50 % stake in any project. Chavez has said he wants the industry to make more complex products.
China, the world's second-largest oil user, hopes to complete its second phase of strategic petroleum reserve bases in two years, a senior energy official told Reuters on Monday, a pace that appears faster than expected. China filled its first phase tanks at four coastal sites that total some 100 mln.b of crude by early 2009.
