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Oil & Gas - Sector
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Crude has now fallen below $50 may even touch $40-45 range. It IS NOT LIKELY TO FALL BELOW $40 AS IT MAY NOT BE ECONOMICAL FOR MANY COUNTRIES TO PRODUCE CRUDE AT THAT LEVEL. Therefore, price fall below $40 may not be possible. Crude will also register upswing on any sign of world economy fairing better. It is imperative that we create a very large reserve of crude and petroleum products as soon as possible. This step is in our national interest, it will ensure energy security and also boost our flagging economy by giving boost to steel / cement industry and also create employment. In times of economic slow down development of long gestation and strategic importance projects are the best bet to support economy in short term and create national assets for coming generations....
In reply to:
Strategic Petroleum Reserves
Posted by :
tally
Crude prices have fallen to below $60 and likely to remain between $50-60 for some time. India has been contemplating building petroleum reserves for some time but high cost of crude prevented the Govt to take any effective step. Now that the crude has fallen, we must take urgent steps to build the reserves to overcome our vulnerability to abnormal price increase, or non availability of oil due political black mail. There is need to build large bulk petroleum installation to cash on drop in crude prices. We must use all existing BPIs to store maximum of petroleum products. I also suggest that Govt hire RILs existing retail outlets to store petrol and diesel to extent possible. However it must undertake construction of very large BPIs to store the envisaged petroleum products to meet emergent future eventualities. 
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Oil prices were steady below $55 a barrel on Wednesday in Asia as investors paused to examine the extent of global economic weakness, which has sent crude down more than 60% in four months.
Light, sweet crude for December delivery was up 19 cents to $54.58 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore. The contract Tuesday fell 56 cents to settle at $54.39, the lowest since January 2007.
Stock markets have served for the past few months as a barometer of investor perceptions about the health of the global economy. The Dow Jones industrial average rose 1.8% on Tuesday as Hewlett-Packard Co. said fourth quarter and 2009 results will exceed analyst expectations.
Most Asian stocks, however, fell on Wednesday. Japan’s benchmark Nikkei index fell 1.8%, Hong Kong’s Hang Seng index dropped 0.3% and the Korea Composite Stock Price Index slid 3.2%.
Oil investors have already priced in a recession in developed countries and only evidence of an especially severe or prolonged slowdown may push prices down further, Chu said.
Prices have fallen 63% since reaching a record $147.27 a barrel in mid-July.
Investors will be watching for signs of slowing US demand in the weekly oil inventories report to be released Wednesday by the US Energy Department’s Energy Information Administration.
The report is expected to show that oil stocks rose 1.2 million barrels last week, according to the average of estimates in a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The Platts survey also projects that gasoline inventories rose 700,000 million barrels and distillates increased 900,000 barrels last week.
In other Nymex trading, gasoline futures rose 0.24 cent to $1.14 a gallon. Heating oil gained 1.21 cents to $1.77 a gallon while natural gas for December delivery increased 0.3 cent to $6.52 per 1,000 cubic feet.
In London, December Brent crude rose 16 cents to $52.00 on the ICE Futures exchange.
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Aviation turbine fuel (ATF) used by airlines has become much cheaper than the price the world`s top 10 oil producers pay for petrol, reports Economic Times.
While the ATF price has dropped from Rs 73.67 per litre to Rs 40.69 in the past four months, the price of petrol had gone up by Rs 5 and is available at Rs 55.07 in Mumbai.
Interestingly, the ATF price was reduced by the petroleum ministry on five separate occasions between August 1 and November 16.
Former petroleum minister Ram Naik has expressed shock at the ministry`s moves and alleged that the Centre was only `pleasing airline companies.` ``Many have switched over to railways in view of the prohibitive cost of flying,`` Naik said.
``It is a strange economy wherein it costs you more to drive a car than fly a plane.` Naik said. He noted that the government could easily bring down prices of petrol and diesel, but there was no political willpower
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rvk41...
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India can benefit hugely from the falling crude prices. Firstly we should create large strategic reserves of crude and petroleum products. These vast reserves will consume huge quantity of steel and cement and help us against any future economic or political black mail, besides ensuring energy stability to certain extent, boost steel and cement industry and provide large scale employment. Secondly Indian E&P cos may go slow in production of crude and gas production- Bombay High Court could help!!! Govt should also extend helping hand by mitigating effects of slow down in production.We can and must drive maximum advantage from falling crude prices....
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Crude prices have fallen to below $60 and likely to remain between $50-60 for some time. India has been contemplating building petroleum reserves for some time but high cost of crude prevented the Govt to take any effective step. Now that the crude has fallen, we must take urgent steps to build the reserves to overcome our vulnerability to abnormal price increase, or non availability of oil due political black mail. There is need to build large bulk petroleum installation to cash on drop in crude prices. We must use all existing BPIs to store maximum of petroleum products. I also suggest that Govt hire RILs existing retail outlets to store petrol and diesel to extent possible. However it must undertake construction of very large BPIs to store the envisaged petroleum products to meet emergent future eventualities....
Oil Inches Lower, After Falling 5 Pct Yesterday; Currently At $ 58.95 Per Barrel
Posted by : zoombusinessTracked by: 0 Boarder
Oil Inches Lower, After Falling 5 Pct Yesterday; Currently At $ 58.95 Per Barrel...
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The Govt is not considering a cut in fuel prices as state-run firms are still incurring losses....
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Oil fell below $60 a barrel on Friday, extending its overnight drop of 7 percent, to its lowest level since March 2007 as spreading economic g
loom further dampened the outlook for energy demand.
US light crude for December delivery fell 58 cents to $60.24 a barrel by 0104 GMT, after falling as far as $59.97 - the lowest level since Mar. 22, 2007. ...
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oil gain one dollar and trading at 68 dollars now.
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The three state-owned oil refiners have incurred losses of Rs 12,891 crore in the second quarter even as their sales increased by 47 per cent during the period.
This is because these firms – Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) – sold fuels at below production costs and incurred inventory losses due to higher crude oil prices. The rupee’s depreciation against the US dollar also contributed to the loss.
The three companies had made a total profit of Rs 5,688 crore in the corresponding quarter a year ago.
Sales of the three companies together rose 46.57 per cent to Rs 147,668.84 crore from Rs 100,744.25 crore a year ago.
“Weak refinery margins pushed these three firms deep into the red,” said a Mumbai-based analyst with a brokerage firm. “The refinery business was bailing out these companies before, but this quarter even that business is under severe pressure,” he added.
IOC today reported its highest-ever loss since the shares were publicly traded in FY01. It is the third time the company is posting a quarterly loss. Losses for the September quarter amounted to Rs 7,047 crore after it lost Rs 4,950 crore from its fuel retail business. The country’s largest oil marketing company said it lost Rs 4,600 crore because of crude oil prices declining by 55 per cent in the last three months.
HPCL, which supplies around 25 per cent of the country’s fuel, also reported a loss of Rs 3,218.92 crore during the quarter. BPCL had reported Rs 2,625 crore loss on Thursday.
The under-realisation of the three companies during the quarter was Rs 44,063 crore, 46.65 per cent of which was made good by the government through payment of oil bonds.
The oil companies also made losses as the rupee’s value depreciated against the dollar. These companies have foreign currency loans and also buy crude oil in dollars. IOC today said it had lost Rs 1,100 crore during the quarter, while BPCL lost Rs 700 crore.
The refinery margins of these three companies also fell drastically with IOC, which controls around 40 per cent of the country’s refining capacity, making negative margins of around $4 per barrel for the first time, compared with $5.91 per barrel in the corresponding quarter last year. BPCL’s refinery margins were $3.1 per barrel compared with $3.5 per barrel a year ago.
The interest paid by these companies on their borrowings of over Rs 110,000 crore as on September 30 also rose over three times to Rs 2,052.76 crore as the firms did not have any bonds and borrowed more in order to meet their daily funding requirement...
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Crude is moving ahead towards 90 mark during this winter season.... ...
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Crude leads broad rally in commodity futures.
SAN FRANCISCO -- Crude-oil futures surged as much as 8% Wednesday, leading a broad rally among commodities, as rallies in most global stock markets and expectations for a rate cut by the U.S. Federal Reserve put prices for oil on track to post the largest daily percentage gain since June....
In reply to:
God blessed America with oil and gas.
Posted by : sambala
Oil falls to $62 on gloomy global economic outlook
Oil falls to $62 in Asia as investors anticipate global economic slowdown will hurt demand
SINGAPORE (AP) -- Oil prices fell to 17-month low around $62 a barrel Tuesday in Asia on investor concerns a global economic slowdown could worsen, further undermining demand for crude.
Light, sweet crude for December delivery fell 87 cents to $62.35 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore after trading as low as $61.75. The contract fell overnight 93 cents to close at $63.22, the lowest settlement since May 29, 2007.
It`s quite a severe slowdown that`s been priced in already," said Jonathan Kornafel, Asia director for market maker Hudson Capital Energy in Singapore. "I thought in June and July the only way we would get below $80 was if there was a macroeconomic collapse, and it seems that that`s what we`re seeing."
Oil investors have been taking a cue from a plunge in global stock markets that suggests major economies are headed for a significant recession over the next 12 months. Oil prices have fallen 58 percent since reaching a record $147.27 on July 11.
The Dow Jones industrial average fell 2.4 percent Monday after credit ratings agency Moody`s Investors Service downgraded General Motors Corp.`s credit rating further into "junk" status, citing a sharp contraction of the U.S. auto market. The Standard & Poor`s 500 index fell 3.2 percent.
In early trading on Tuesday, Asian stock markets were mixed, with key indices in Japan and Australia down but Hong Kong and Thailand gaining after both of those markets fell more than 10 percent Monday.
"If the credit market remains tight and the recession worsens, we could certainly go into the $50s and even below $50, but that would be an overshoot to the downside," Kornafel said.
Prices have fallen despite a production quota cut of 1.5 million barrels a day by the Organization of Petroleum Exporting Countries last week. OPEC officials have said the group, which controls about 40 percent of global crude oil production, may cut output again at a meeting in December.
"It doesn`t matter what OPEC does or other supply news, people are just so focused on demand and getting their money out of trades that no longer make money," Kornafel said. "There`s no real attention being paid to fundamentals in the short-term. It`s still the panic."
In other Nymex trading, gasoline futures fell 1.68 cent to $1.46 a gallon and heating oil fell 0.28 cent to $1.91 a gallon. Natural gas for November delivery fell 1.8 cents to $6.10 per 1,000 cubic feet.
In London, December Brent crude was down $1.21 to $60.20 a barrel on the ICE Futures exchange.
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Oil falls to $62 on gloomy global economic outlook
Oil falls to $62 in Asia as investors anticipate global economic slowdown will hurt demand
SINGAPORE (AP) -- Oil prices fell to 17-month low around $62 a barrel Tuesday in Asia on investor concerns a global economic slowdown could worsen, further undermining demand for crude.
Light, sweet crude for December delivery fell 87 cents to $62.35 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore after trading as low as $61.75. The contract fell overnight 93 cents to close at $63.22, the lowest settlement since May 29, 2007.
It`s quite a severe slowdown that`s been priced in already," said Jonathan Kornafel, Asia director for market maker Hudson Capital Energy in Singapore. "I thought in June and July the only way we would get below $80 was if there was a macroeconomic collapse, and it seems that that`s what we`re seeing."
Oil investors have been taking a cue from a plunge in global stock markets that suggests major economies are headed for a significant recession over the next 12 months. Oil prices have fallen 58 percent since reaching a record $147.27 on July 11.
The Dow Jones industrial average fell 2.4 percent Monday after credit ratings agency Moody`s Investors Service downgraded General Motors Corp.`s credit rating further into "junk" status, citing a sharp contraction of the U.S. auto market. The Standard & Poor`s 500 index fell 3.2 percent.
In early trading on Tuesday, Asian stock markets were mixed, with key indices in Japan and Australia down but Hong Kong and Thailand gaining after both of those markets fell more than 10 percent Monday.
"If the credit market remains tight and the recession worsens, we could certainly go into the $50s and even below $50, but that would be an overshoot to the downside," Kornafel said.
Prices have fallen despite a production quota cut of 1.5 million barrels a day by the Organization of Petroleum Exporting Countries last week. OPEC officials have said the group, which controls about 40 percent of global crude oil production, may cut output again at a meeting in December.
"It doesn`t matter what OPEC does or other supply news, people are just so focused on demand and getting their money out of trades that no longer make money," Kornafel said. "There`s no real attention being paid to fundamentals in the short-term. It`s still the panic."
In other Nymex trading, gasoline futures fell 1.68 cent to $1.46 a gallon and heating oil fell 0.28 cent to $1.91 a gallon. Natural gas for November delivery fell 1.8 cents to $6.10 per 1,000 cubic feet.
In London, December Brent crude was down $1.21 to $60.20 a barrel on the ICE Futures exchange.
...
In reply to:
God blessed America with oil and gas.
Posted by : sambala
Opec cuts supply to try to stop oil price slide
But oil market falls again after emergency meeting
The cartel of the world`s largest oil-producing countries agreed yesterday to cut supply by 1.5 million barrels per day (bpd), to try to slow an oil price collapse "unprecedented in speed and magnitude" – but the market kept falling anyway. The reduction was agreed at an emergency meeting of the Organisation of Petroleum Exporting Countries (Opec) in Vienna, convened to discuss the oil price`s slump of more then 50 per cent from July`s $147-per-barrel high.
But after a week when the price dipped below $70 for the first time since August 2007, even the promised restriction failed to stabilise a market gripped by panic over the impact of global rec-ession. By mid-afternoon, Brent crude for November delivery was down by more than $3 at around $63, and West Texas Intermediate for December was down by more than $3 at around $65.
Even before the non-event of yesterday`s cuts, the whiff of panic from Opec was becoming a fog. "Oil prices have witnessed a dramatic collapse – unprecedented in speed and magnitude," the group`s statement about the production cuts said. "[They are] falling to levels which may put at jeopardy many existing oil projects and lead to the cancellation or delay of others, possibly resulting in a medium-term supply shortage."
The group is also calling on non-Opec producers to do their bit "to restore prices to reasonable levels and eliminate harmful and unnecessary fluctuations" – simultaneously publishing details of a meeting this week between its secretary general, Abdalla Salem El-Badri, and Dmitry Medvedev, the president of Russia, which is not a member of the cartel despite being the world`s second-largest producer. At the meeting, Mr Medvedev "highlighted the Russian readiness for a continuous and comprehensive dialogue with Opec, for the purpose of achieving stable and predictable oil markets", the statement said.
The desire to hold up the price is not simply greed. Some Opec members rely heavily on oil revenues to sustain their national budgets and are far more exposed to oil income fluctuations than those simply pouring the excess into sovereign wealth funds.
John Waterlow, an analyst at Wood McKenzie, said: "Different producers across Opec will have different thresholds of pain. Iran has a high population and needs oil revenues more than Saudi Arabia or United Arab Emirates."
Meanwhile, the top four UK supermarkets are in a petrol price war. Asda announced yesterday that it is freezing prices for 10 days. Sainsbury`s and Tesco cut their prices by 3p per litre this week, Morrisons by 2p per litre.
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Opec cuts supply to try to stop oil price slide
But oil market falls again after emergency meeting
The cartel of the world`s largest oil-producing countries agreed yesterday to cut supply by 1.5 million barrels per day (bpd), to try to slow an oil price collapse "unprecedented in speed and magnitude" – but the market kept falling anyway. The reduction was agreed at an emergency meeting of the Organisation of Petroleum Exporting Countries (Opec) in Vienna, convened to discuss the oil price`s slump of more then 50 per cent from July`s $147-per-barrel high.
But after a week when the price dipped below $70 for the first time since August 2007, even the promised restriction failed to stabilise a market gripped by panic over the impact of global rec-ession. By mid-afternoon, Brent crude for November delivery was down by more than $3 at around $63, and West Texas Intermediate for December was down by more than $3 at around $65.
Even before the non-event of yesterday`s cuts, the whiff of panic from Opec was becoming a fog. "Oil prices have witnessed a dramatic collapse – unprecedented in speed and magnitude," the group`s statement about the production cuts said. "[They are] falling to levels which may put at jeopardy many existing oil projects and lead to the cancellation or delay of others, possibly resulting in a medium-term supply shortage."
The group is also calling on non-Opec producers to do their bit "to restore prices to reasonable levels and eliminate harmful and unnecessary fluctuations" – simultaneously publishing details of a meeting this week between its secretary general, Abdalla Salem El-Badri, and Dmitry Medvedev, the president of Russia, which is not a member of the cartel despite being the world`s second-largest producer. At the meeting, Mr Medvedev "highlighted the Russian readiness for a continuous and comprehensive dialogue with Opec, for the purpose of achieving stable and predictable oil markets", the statement said.
The desire to hold up the price is not simply greed. Some Opec members rely heavily on oil revenues to sustain their national budgets and are far more exposed to oil income fluctuations than those simply pouring the excess into sovereign wealth funds.
John Waterlow, an analyst at Wood McKenzie, said: "Different producers across Opec will have different thresholds of pain. Iran has a high population and needs oil revenues more than Saudi Arabia or United Arab Emirates."
Meanwhile, the top four UK supermarkets are in a petrol price war. Asda announced yesterday that it is freezing prices for 10 days. Sainsbury`s and Tesco cut their prices by 3p per litre this week, Morrisons by 2p per litre.
...
In reply to:
God blessed America with oil and gas.
Posted by : sambala
What An Opec Oil Cut Would Mean
If you`d have asked anyone two years ago what would happen if oil breaches $140 barrel, they`d have told you, without hesitation, that there would be a worldwide recession.
Well back in the summer oil did hit $147 and, would you Adam and Eve it, the world`s big economies now all look headed for recession.
The high price of oil was not wholly responsible for this downturn - the near-collapse of the banking system did most of the hard work there - but oil prices did help inflation play its part.
Opec may bleat about speculators distorting the oil price but the fact is that back in the summer, Opec proved either unable or unwilling to increase supply to stabilise soaring prices.
With the downturn now upon us the oil price has slumped.
Great news for us in the UK: the cost of petrol and diesel has nose-dived, and the general cost of living is expected to fall sharply if this trend continue.
But low oil prices are a disaster for many of Opec`s members.
Oil titans like Saudi Arabia, which sits on one fifth of the world`s reserves, know there`s money to be made even with oil below $70 a barrel.
But Venezuela, Nigeria, Iraq and Iran all need very high oil prices.
Anything less will blow a significant hole in government budgets. In the case of Iran, 80% of government revenues come from oil - there`s not much more to the Iranian economy.
The 13 countries that make up Opec control around 40% of the world`s oil production. They can`t control demand but that`s more than enough muscle to manipulate supply to prop up, or even push up, prices.
Gordon Brown has already said any cut in oil output would be "scandalous" but Opec will reduce production. The question is: by how much?
The best outcome is that Opec announces a one million barrel a day cut that they do not implement fully.
Anything more than two million barrels a day and, in the words of Merrill Lynch`s oil guru, Francisco Blanch, oil could start "trending high".
The last thing we need heading into a recession.
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VIENNA: Opec’s president said the oil organisation will lower output at an urgent meeting today as hardline members pushed for sharp cuts despite warnings that a resulting price rise could worsen economic hardship.
-GulfTimes,Dubai...
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