Thursday, February 08, 2007
Oil finishes around 59.70
Oil rallied in last 30 minutes on back of news from Occidental Petroleum Corp. Appears that an accident at their ' Taft' oil field is going to disrupt their oil supplies. The field is operated by Occidental of Elk Hills, a division of Occidental Petroleum Corporation, said Michael Glinzak, associate oil and gas engineer with the state Department of Conservation's Division of Oil, Gas and Geothermal Resources.
Base metals
DJ LME Review: Base Metals Remain Range-Bound; Seen Volatile
LONDON (Dow Jones)--London Metal Exchange base metals stayed inside their recent trading ranges Thursday but traders expect further price volatility as the market searches for clearer price direction.
"Markets were overall lower Thursday but the prevailing view has been to sell into strength and buy back to make profits," said one LME trader. Volumes have been quite active but the markets have been content to remain range-bound, he added.
Speculative buying helped three-month tin prices buck the general weakness, said one broker, as prices rose nearly 3% to a PM kerb of $12,150 a metric ton from Wednesday.
Adding to price support was a fall in LME tin stocks by 115 tons to 10,610 tons Thursday, the lowest level for LME tin stocks since November 2005, according to Barclays Capital.
Moreover, concerns over changes in regulations governing Indonesian tin exports are underpinning prices, the broker added. Recently, tin prices have rocketed to record highs of $12,500/ton due to Indonesia's recent shutdown of private mining and smelting operations on Bangka island, where the country's largest tin reserve is located. The South Asian country produces about one-third of the roughly 360,000 tons of the world's annual tin output.
In other news, tin industry specialist ITRI said Thursday that global tin consumption increased nearly 9% during 2006 from the year earlier, driven primarily by strong growth in the electronics sector and expansion of lead-free soldering.
Three-month aluminum rose above the 200-day moving average, up roughly 1%, to a PM kerb of $2,688/ton from Wednesday in very heavy electronic trading volumes.
A broker commented that it appeared that someone looking to liquidate a large position had found willing buyers. Earlier, the metal fell to a one-month low of $2,628/ton triggered by an increase in LME aluminum stocks by 3,275 metric tons to 755,825 tons Thursday.
Aluminum prices would need to break $2,590/ton before it triggers any major downside activity, said one LME trader. Prices fell overnight in Asia due to fund liquidation, according to two London traders, which spread weakness into the rest of the base metals complex.
Three-month zinc fell 1.5% to a PM kerb of $3,115/ton from Wednesday while copper fell nearly 1% to a PM kerb of $5,415/ton. However, both metals remained within their recent ranges.
Nickel prices also fell nearly 1% to a PM kerb of $35,450/ton triggered by an increase in nickel stocks by 534 tons to 3654 tons Thursday morning with canceled warrants - or material accounted for and to be drawn down at a later date - easing to 17% from 19% Wednesday.
In other news, LCH.Clearnet, which clears trades for the London Metal Exchange, has lowered its initial margins for nickel, copper and zinc, and hiked them for lead and tin, the clearing house said in a notice to members seen by Dow Jones Newswires Thursday.
The changes will be effective close of business on Feb. 14 and will be reflected in margin calls on Feb. 15.
Meanwhile, LCH.Clearnet said it has lowered initial margins for the new LMEmini copper and zinc contracts, launched Dec. 4.
LMEminis are cash-settled, monthly contracts, electronically traded on the exchange's electronic trading platform Select and in smaller tonnages than typical LME contracts. Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Wednesday PM kerb
Copper 5415.0-5420.0 Dn 5
Lead 1574.0-1575.0 Up 14
Zinc 3115.0-3120.0 Dn 75
Aluminum 2688.0-2690.0 Up 33
Nickel 35450.0-35500.0 Dn 400
Tin 12150.0-12175.0 Up 350
Aluminum Alloy 2190.0-2200.0 Up 10
Aluminum Alloy 2100.0-2110.0 Up 19
LONDON (Dow Jones)--London Metal Exchange base metals stayed inside their recent trading ranges Thursday but traders expect further price volatility as the market searches for clearer price direction.
"Markets were overall lower Thursday but the prevailing view has been to sell into strength and buy back to make profits," said one LME trader. Volumes have been quite active but the markets have been content to remain range-bound, he added.
Speculative buying helped three-month tin prices buck the general weakness, said one broker, as prices rose nearly 3% to a PM kerb of $12,150 a metric ton from Wednesday.
Adding to price support was a fall in LME tin stocks by 115 tons to 10,610 tons Thursday, the lowest level for LME tin stocks since November 2005, according to Barclays Capital.
Moreover, concerns over changes in regulations governing Indonesian tin exports are underpinning prices, the broker added. Recently, tin prices have rocketed to record highs of $12,500/ton due to Indonesia's recent shutdown of private mining and smelting operations on Bangka island, where the country's largest tin reserve is located. The South Asian country produces about one-third of the roughly 360,000 tons of the world's annual tin output.
In other news, tin industry specialist ITRI said Thursday that global tin consumption increased nearly 9% during 2006 from the year earlier, driven primarily by strong growth in the electronics sector and expansion of lead-free soldering.
Three-month aluminum rose above the 200-day moving average, up roughly 1%, to a PM kerb of $2,688/ton from Wednesday in very heavy electronic trading volumes.
A broker commented that it appeared that someone looking to liquidate a large position had found willing buyers. Earlier, the metal fell to a one-month low of $2,628/ton triggered by an increase in LME aluminum stocks by 3,275 metric tons to 755,825 tons Thursday.
Aluminum prices would need to break $2,590/ton before it triggers any major downside activity, said one LME trader. Prices fell overnight in Asia due to fund liquidation, according to two London traders, which spread weakness into the rest of the base metals complex.
Three-month zinc fell 1.5% to a PM kerb of $3,115/ton from Wednesday while copper fell nearly 1% to a PM kerb of $5,415/ton. However, both metals remained within their recent ranges.
Nickel prices also fell nearly 1% to a PM kerb of $35,450/ton triggered by an increase in nickel stocks by 534 tons to 3654 tons Thursday morning with canceled warrants - or material accounted for and to be drawn down at a later date - easing to 17% from 19% Wednesday.
In other news, LCH.Clearnet, which clears trades for the London Metal Exchange, has lowered its initial margins for nickel, copper and zinc, and hiked them for lead and tin, the clearing house said in a notice to members seen by Dow Jones Newswires Thursday.
The changes will be effective close of business on Feb. 14 and will be reflected in margin calls on Feb. 15.
Meanwhile, LCH.Clearnet said it has lowered initial margins for the new LMEmini copper and zinc contracts, launched Dec. 4.
LMEminis are cash-settled, monthly contracts, electronically traded on the exchange's electronic trading platform Select and in smaller tonnages than typical LME contracts. Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Wednesday PM kerb
Copper 5415.0-5420.0 Dn 5
Lead 1574.0-1575.0 Up 14
Zinc 3115.0-3120.0 Dn 75
Aluminum 2688.0-2690.0 Up 33
Nickel 35450.0-35500.0 Dn 400
Tin 12150.0-12175.0 Up 350
Aluminum Alloy 2190.0-2200.0 Up 10
Aluminum Alloy 2100.0-2110.0 Up 19
Oil hovers around 58
Oil prices meander below $58 a barrelNEW YORK (AFX) - Oil prices wavered below $58 a barrel Thursday, as energy traders struggled to find direction in a market that has risen sharply over the past two weeks on arctic U.S. weather, but has been unable to surpass the $60 mark.Many analysts are saying that oil prices have become mired in a range between about $56 and $60 a barrel; factors such as violence in Nigeria, growing tensions in Iran, and low temperatures are keeping prices afloat, but abundant global supplies and the belief that U.S. heating fuel demand can't get any higher are reining them in.Crude prices dropped more than a dollar Wednesday after the U.S. Department of Energy's weekly inventory report showed that last week, daily distillate demand averaged 4.3 million barrels, below most analyst expectations.Light, sweet crude for March delivery rose 15 cents to $57.86 a barrel in late morning trading on the New York Mercantile Exchange, after rising as high as $58.42 and slipping as low as $57.30.The daily volatility in trading "shows that the market is still solidly in the $56-$60 range," said Victor Shum, an energy analyst with Purvin & Gurtz in Singapore.Shum said the continued kidnappings in Nigeria and increasing tensions between Iran and the United States over the Iranian nuclear program were "a reminder to the oil market that geopolitical tensions are lurking," but were not strong enough factors to leap above the psychological barrier of $60.Meanwhile, natural gas prices rose slightly Thursday, after the Energy Department said 224 billion cubic feet of natural gas were taken out of underground storage last week -- around what most analysts were expecting. Total natural gas in storage stands at 2.571 trillion cubic feet, about 8 percent above where it was a year ago.Nymex natural gas rose 8.6 cents to $7.795 per 1,000 cubic feet.The price of natural gas, the more popular form of home heating in the United States, has risen more than 60 percent over the past month on recent cold weather. They are trading around the same levels they were this time last year.Bitterly cold weather recently in the Northeast -- which represents 80 percent of the nation's heating oil demand -- has also helped lift crude prices 19 percent since Jan. 18, when crude touched a 20-month low of $49.90.The National Oceanic and Atmospheric Administration continues to forecast below-normal temperatures across the Northeast until at least Feb. 19.Traders have not sent prices above $60 a barrel since the first trading day of the year.According to Cameron Hanover's Peter Beutel, the best hope for traders betting on rising prices is that next week's inventory data could show a record figure for distillate demand and a larger decrease in distillate stockpiles."The problem, now, though, is that traders may do a lot of selling between now and then, and that could leave us substantially lower by the time next week's figures are released. Yesterday's inability to break $60 is going to give the sellers the initiative," Beutel wrote.March Brent crude at London's ICE Futures exchange fell 29 cents to $56.94 a barrel.In other Nymex trading Thursday, heating oil rose 1.29 cent to $1.6790 a gallon, and gasoline rose less than a cent to $1.5475 a gallon.
Copper under pressure
1416 GMT [Dow Jones] Expectations of increased copper demand from China are the "last ditch hope" for market bulls, says a US broker. China's not going to restock to anywhere near the levels people have been led to believe by market longs, he notes, and this will force a sharp slump in global copper prices. "Of course China will continue to buy but nothing like to the extent that the market needs to keep prices at current levels or to push them higher," he adds. London Metal Exchange copper trades last at $5,305 a metric ton, down 2% from $5,420/ton earlier. (ADH)
BG..
LONDON (AFX) - UK gas producer BG Group PLC reported an 18 pct fall in fourth-quarter earnings, but still better than analysts' estimates, and reaffirmed its production targets through 2012.To support its growth ambitions, BG upgraded planned capital spending in the coming years, mainly to take into account the industry-wide cost inflation and accelerated project implementation.Despite the increased capex, BG is extending its share buyback programme in 2007, when it hopes to repurchase a further 750 mln stg, on top of the 1 bln stg in shares it bought back in 2006.BG's earnings before disposals and other one-off items in the three months to December, though down 18 pct to 410 mln stg from 503 mln last time, were still ahead of the forecast range of 348-406 mln stg and the consensus figure of 384 mln.Operating profit dropped 12 pct 760 mln stg from 860 mln previously, also above the forecast range of 660-755 mln stg and the consensus figure of 722 mln.Quarterly output rose 5 pct to 622,000 barrels of oil equivalent per day from 590,000 boepd previously, lifting the total for the year by 19 pct to 601,000 boepd from 504,000 boepd, ahead of the group's target of 600,000 boepd.BG reaffirmed its production growth guidance of 5-7 pct from 2006 to 2009, and is confident of achieving its 6-10 pct target to 2012.Its three-year average proved reserve replacement rate reached 108 pct, with around 1 bln boe added to its overall resource base."BG continues to see a strong outlook for earnings potential to 2009 and beyond," driven largely by strong output and margin growth at its liquefied natural gas (LNG) business, the group said in a strategy update published alongside the annual results.The assets that produced 590,000 boepd in 2006 will "still be producing 500,000 boepd right out to 2015," it added.Frank Chapman, the chief executive, told reporters in a conference call the group won't have to resort to acquisitions to achieve its targets."We're quite happy with our organic plans," he said, adding the group's "fundamental belief" is to drive the business through organic investments.The projected rise in volumes "won't be linear", said Chapman, noting it expects volumes to improve further this year.The rising output will allow BG to take fill in part of the LNG shortage, which it expects to persist for at least five years. The tight supply bodes well for the group's future, encouraging it to raise its EBITDA margin guidance to 16 pct in 2007 and 18 pct in 2008, assuming contracted supply of 12.3 mln tonnes per annum in 2007 and 13.5 mtpa in 2009.They were also based on BG's expectations that average LNG supply will rise 21-24 pct per annum to 2009 and 16-20 pct per annum from 2005 to 2012.BG said its reserves and resources now amount to over 8 bln boe and can deliver 37 years of production. Its proved and probable reserves are equivalent to 16 years of production.To achieve its growth ambitions, BG is setting aside 2.2 bln stg for capital spending for 2007. Capex for 2007-09, however, will reach 5.3 bln stg, higher than its previous guidance of 4.8 bln.A further 2.2 bln stg will be spent during the three-year period to 2009 on projects due to come on stream after 2009, resulting in a total spend of 7.5 bln stg, excluding 500 mln stg in acquisitions it has announced but has yet to complete.Responding to concerns over BG's purchase of two power plants in the US, Chapman said the deals were part of the group's aim to build an integrated downstream business."It's not a utility-style investment. We're not approaching it as a utility player," he told reporters.The acquisitions were "not a step-out" of the group's strategy, but "a profitable and stable part" of the business, he stressed.Last year, BG bought the 805-megawatt Lake Road power plant in Connecticut for 685 mln usd and the 170-mw Dighton power facility in Massachusetts for 90 mln usd. Despite the earnings fall, BG raised dividends for the quarter by 3 pct to 4.20 pence a share, and by 20 pct to 7.20 pence for the year.Ashley Almanza, BG chief finance officer, is not ruling out further share buybacks after the 750 mln stg programme it announced today."We will continue to (repurchase shares) as long as it will be for the interest of shareholders," he said during the conference call.At 9.55 am, BG shares were up over 2 pct at 710 pence, reaching a high of 719p earlier.
Oil sector weak
Sector weak this morning as expected..Oil is trading pretty much flat..Was up earlier in Asian trade but gains have evaporated ahead of direction from US this afternoon. BOE and ECB rates decisions at lunchtime likely to be containing the markets too especially in the light of the rate hike surprise from BOE last time. I'd like to see some direction from the US before taking a position . Risk is for further downside during the session in oil shares due to uncertainty..
Subscribe to:
Posts (Atom)
&from=business){kind=link}