Oil Futures Set Another Record High, Close at $118.75
Apr 29, 2008
Oil closed 23¢ higher Monday, setting a new record of $118.75. Oil futures had risen to $119.93 before easing somewhat.
Oil traders were reacting to a) BP workers in England walking out for 1 day and b) a 4th attack on a Nigerian pipeline in 1 week.
Read more at CNN
Brazil May Have Found 3rd Largest Oil Field
Apr 15, 2008
Brazilian Petroleum Agency President Haroldo Lima announced that a deep-water oil field may cointain 33 billion barrels of oil. If true, that would make it the 3rd largest field on earth, and quadrople Brazil's current reserves of 11.8 billion barrels. However, Mr. Lima cautioned that the numbers needed further scientific confirmation.
Brazil has repeatedly struck energy gold recently, having found an estimated 8 billion barrels at their Tupi oil field last November, and a gigantic natural gas reserve in an ocean field nicknamed 'Jupiter'
Industry experts cautioned that despite the huge finds, it will still take almost a decade before the oil makes it to markets.
Read more at MSNBC
Russian Oil Output Down, Oil hits new Record $113.93
Apr 15, 2008
Russian oil output fell 1% to 10 mb/d in the first quarter of 2008. This was the first drop in Russian output in several years, and unexpected by many traders who thought oil output would rise through at least 2012. Lukoil VP Leonid Fedun warned that $1 trillion would have to be spent to maintain current oil production levels.
Oil exploration in Eastern Siberia remains an option, but is hampered by high tax rates and few incentives for exploration.
Read more at the BBC
World Bank Launches EITI++
Apr 14, 2008
The World Bank announced the launching of EITI++ (Extractive Industries Transparency Initiative) The program is designed to help developing nations direct commodity revenues into fighting disease, malnutrition, and poverty.
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World Bank
World Bank Warns 36 Countries at Risk from Food Prices
Apr 14, 2008
On Monday, the World Bank warned that 36 countries face a serious food crises.
The list includes India, Pakistan, Indonesia, Philippines, Bangladesh, Egypt, Peru, Haiti, and a large number of African countries.
Read more at Dawn
Revisiting India's Proposed Commodity Transaction Tax (CTT)
Apr 14, 2008
On February 29th, the Indian government proposed a new Commodity Trasnaction Tax (CTT) of 0.017% on all commodity trades, and the banning of trading in certain commodities. Since that proposal, trading volume on India' MCX and NCDEX have fallen substantially.
The tax will not go into effect until India's Parliament passes the new budget.
Read more at Times of India
IRRI: Rice Prices to Continue Up
Apr 12, 2008
Rice, the staple to 3 billion people, is expected to continue to rise in price according to a recent publication from the The International Rice Research Institute (IRRI). In the last year, some grains of rice have risen by 70%. Many of the major rice exporters - China, India, Vietnam, and Egypt - have already put export curbs into place. Others like Pakistan, Thailand, and the Philippines have begun deploying armed forces to protect rice crops.
The IRRI cites several causes for the price changes in rice
- land lost to industrialization and urbanization
- increasing amount of meat consumed in India and China, which has reduced the land used for rice
- Foul weather in China, Vietnam, Indonesia, and Bangladesh
- Export controls in many of the major producers
Read more at the BBC
International Oil Firms Lining Up For Iraq
Apr 12, 2008
Chevron and Total are meeting with the Iraqi Oil Ministry to discuss increasing production in the south.
Specifically, the 2 firms are finishing an agreement to increase production at the West Qurna Stage 1 oil field near Basra. The West Qurna is believed to have between 15 and 21 billion barrels, and is currently yielding 180 kb/d. Pre Gulf War 2 production was 250 kb/d.
Many of the other oil giants are already in talks with the Iraqi government about other fields - including Royal Dutch Shell, BP, and ExxonMobil.
Read more at CNBC
IEA Revises 2008 Oil Demand Down
Apr 12, 2008
In a new report, the International Energy Association has revised 2008 daily demand down 310 kb/d to 87.2 mb/d. This was largely prompted by the revised IMF global growth forecast released earlier in the week. However, oil demand still remains 1.5% larger than 2007.
Read more at the IEA
UN FAO Warns of Food Prices, Food Riots
Apr 11, 2008
The UN Food and Agricultural Organization (FAO) warned this week that despite record global crop output, rising prices are likely to remain.
Global output is expected to increase 2.6% to 2.16 billion tons. However, that is not enough to offset growing demand from the new middle classes of India, China and other nations.
The UN warned that the food price surge hits the poor in developing nations the hardest. In the last few weeks food riots have hit Egypt, Cameroon, Haiti, Burkina Faso, and Senegal.
Read more at MSNBC
At least 4.3 Billion Barrels in Bakken Shale
Apr 10, 2008
According to a newly released US Geological Survey report, at least 4.3 billion barrels of oil can be recovered from the Bakken Shale using existing technology. The bulk of the 25,000 square mile shale sits in western North Dakota.
By comparison, a 1995 report estimated that 151 million barrels could be recovered. The newly completed USGS survey indicated that 105 million barrels of oil have been extracted so far.
The new USGS report did not indicate the total volume of oil. Only how much oil could be extracted with existing technology.
Read more at Yahoo
Wheat Futures Fall for Second Day
Apr 10, 2008
Wheat futures declined 1.1% to $9.3625 on Thursday. About an inch of rain fell overnight on fields from Nebraska to Texas, improving growth expectations ahead of grain development. In addition, drier weather next week in the Midwest should allow farmers to begin applying fertilizer.
Wheat exports rose 70% for the week ending April 3. Wheat shipments totaled 760,100 tons, 46% above the 4 week average.
But not all news was good. According to the USDA, 45% of US winter wheat is rated as good or excellent, vs 64% this time last year.
Read more at Bloomberg
Mexico Moves Forward with Pemex Reforms
Apr 9, 2008
President Felipe Calderon pressured the Mexican congress to pass an energy reform bill that would overhaul state owned Pemex.
Pemex is a touchy subject in Mexico, as the constitution requires the oil industry remain under state control. The proposed reforms would give Pemex the ability to hire contractors, the responsibility of managing the production and exploration budgets, and issue "citizens bonds" so that Mexicans can invest in the company.
Mexcican oil production has fallen 6 years in a row. Cantarell, which has yielded 60% of the oil, has seen notable output declines.
Read more at the BBC
Crude Oil Futures Close at Record $110.87
Apr 9, 2008
A government report showing an unexpected decline in stocks sent crude oil futures surging to a record close of $110.87. Oil prices also set a new intraday high of of $112.21.
The Energy Information Administration (EIA) reported that crude supplies fell 3.2 million barrels, while analysts had been expecting an increase of 2.4 million barrels. Gasoline supplies fell 3.4 million barrels ( 2.3 expected), and distillates fell 3.7 million barrels (1.2 expected).
Read more at CNN
IMF To Sell 400 Tons of Gold, Other Metals Down
Apr 8, 2008
On Tuesday, the IMF approved a plan to sell 403 metric tons of gold, sending futures prices down $8.80 on Comex June contract. The IMF indicated 2 motivations behind the sale - 1) to reduce the lender's shortfall and 2) to help cut costs going forward. The proposal still must be approved by the US Congress.
May silver futures fell 2.3% to $17.708. Year to date, silver is up 19% vs 10% for gold.
Copper futures for May fell 2.2% to $3.8905. Copper had read $4 yesterday, just $0.04 short of an all time high reached on May 11, 2006.
Read more at Bloomberg part 2
Metals Break Out the Rally Monkey
Apr 7, 2008
Friday's unemployment report brought investors back to the metals safe havens Monday. Metals Futures rallied across the spectrum. Gold was up +$13.60), silver +$0.365, platinum +$16.40, and palladium +$12.75.
Platinum futures are also being driven higher by continued electricity shortages in South Africa, which has dented South African mining production.
Read more at Barchart.com
Coffee Rebounds
Apr 4, 2008
Coffee was up $0.06 Friday to close at $1.319. After losing 14% the previous 2 weeks, coffee posted a 1.2% gain this week.
Brazil is scheduled to start harvesting 53.9 million bags this month.
Read more at Barchart.com
Crucial Crude Pivot Point
Apr 1, 2008
Technical analysis of oil prices indicates 101.58 may be a crucial pivot point. The market is either setting up to have a double bottom and then move higher. Or, crude oil may beak below the 101.58 pivot point. If that is the case, 62% Fibonacci retracements indicate a price around $95.00
Watch Crude Oil Tech Analysis Video
