Oil

Oil prices slide below $58 a barrelNEW YORK (AP) - Oil prices plunged by more than $2 Monday, dropping below $58 a barrel on rising U.S. temperatures and news that OPEC is expecting a crude surplus in the spring but has no plans to cut more production.On Friday, prices had climbed briefly above the psychological $60 barrier on unrelenting cold U.S. weather. But the chill is expected to ease up in the next couple weeks, leading traders to believe that heating fuel demand will weaken.Light, sweet crude for March delivery fell $2.29 to $57.60 a barrel in afternoon trading on the New York Mercantile Exchange Monday.Brent crude for March dropped $2.71 to $56.30 a barrel at London's ICE Futures exchange."We continue the roller coaster that oil prices have been on pretty much since the end of the year. After not being able to sustain above $60, the market really gave way," said Andrew Lebow of Man Financial Inc. "Now, the market's looking ahead toward warmer weather at the end of the month."The National Weather Service on Monday said temperatures over the next two weeks will still be below normal in the Northeast -- which consumes 80 percent of the nation's heating oil -- but normal or above normal in parts of the Midwest and some Western states.Also causing traders to sell, Hasan Qabazard, head of research for the Organization of Petroleum Exporting Countries, on Monday forecast a global surplus of crude supply over demand of some 300,000 barrels a day in the April-June quarter. The International Energy Agency has predicted a 2 percent drop in world oil consumption in the second quarter.In an interview with The Wall Street Journal in Riyadh this weekend, Saudi oil minister Ali Naimi suggested that the cartel was not looking to make further production cuts. Saudi Arabia's production is currently 8.5 million-8.6 million barrels a day, about 1 million barrels a day lower than six months ago, he said."If you are asking me are we going to take additional cuts or increase supply, I do not know," said Naimi, the oil cartel's de facto leader. "But, most probably if the trend is like what it is like today, with the market getting in much, much better health and balance, there may not be any reason to change."Traders were awaiting the weekly reports on U.S. supplies of petroleum products and natural gas, which are released on Wednesday and Thursday, respectively, by the Department of Energy's Energy Information Administration."Most observers expect this week's DOE and EIA reports to show heavy withdrawals of distillate and natural gas, but there is the gnawing, lingering fear that the winter is reaching its effective end," wrote Peter Beutel of Cameron Hanover in a research note. "We see the fear every year at this time, although it is barely ever borne out; March is usually colder than we remember it being."The market is expecting a record decrease in distillate fuels, which include heating oil, of 4 to 5 million barrels."The market's expecting a fairly robust demand number. If we fail to get that, it could cause prices to weaken further," Lebow said.Heating oil plummeted 7.80 cents to $1.6471 a gallon on the Nymex, gasoline fell 6.22 cents to $1.5526 a gallon, and natural gas fell 50.2 cents to $7.325 per 1,000 cubic feet.Natural gas, the more popular form of home heating in the United States, had risen more than 60 percent over the past month on the recent cold weather.

LME REVIEW FOR MONDAY

DJ LME Review: Supply Concerns Boost Tin Prices To Record High
LONDON (Dow Jones)--London Metal Exchange tin climbed to a fresh record high Monday on the back of ongoing supply concerns, with traders expecting further price volatility in the near term.
Three-month tin hit a fresh record high of $12,750 a metric ton earlier Monday before retreating to an afternoon kerb of $12,500/ton.
News that PT Koba Tin - one of Indonesia's largest tin smelters - declared force majeure to its tin customers on shipments and deliveries of metal was supportive to prices, analysts and traders said. The South Asian country produces around a third of the 360,000 tons of global annual tin output.
Similarly, uncertainty over the future of Bolvia's tin production boosted prices. On Friday, Bolivian President Evo Morales nationalized the Vinto tin smelter of Switzerland's Glencore International AG. The Vinto smelter produces about 12,000 tons of tin metal.
Adding to price support was a drawdown in tin inventories by 130 tons to 10,480 tons Monday. Tin stocks are down nearly 20% from the start of 2007.
Other base metals including copper, lead and aluminum were also sharply impacted by LME inventories and supply concerns.
Aluminum prices continue to hover near $2,700/ton despite a resumption of a strike in the Republic of Guinea.
Alcoa Inc. said Monday that there have been disruptions to its CBG bauxite operations in Guinea since fighting broke out and a strike resumed, but it's still unclear what impact this is having on production. Guinea is a key producer of bauxite, the raw material that makes alumina, which in turn makes aluminum.
Adding to price support, Hussein Allidina of Morgan Stanley said in a research report that "aluminum continues to present some concern in the market with over 90% of LME aluminum inventories still held by a single member."
However, capping those gains was an increase in aluminum stocks by 1,025 tons to 758,300 tons Monday, up nearly 9% from the start of the year and nearly 5% above year-ago levels.
Meanwhile, copper prices fell over 2% to an afternoon kerb of $5,470/ton as copper inventories rose 416 tons to 216,050 tons Monday, up roughly 14% from the start of 2006.
However, worries of a possible strike at Southern Copper Corp.'s Ilo copper smelter in Peru kept prices from falling sharply. The new smelter processes roughly 1.2 million tons of copper concentrates a year.
Elsewhere on the LME, three-month lead prices cimbed nearly 3% to a PM kerb of $1,659/ton from Friday, driven by news that Xstrata Plc declared force majeure at its Northfleet lead refinery in the U.K. following reduced supplies from its Mount Isa smelter in Australia.
Northfleet produced around 161,350 metric tons of lead last year, using feedstock from Mount Isa. Prices in dollar a metric ton.
3 Months Metal Bid-Ask Change from
Friday PM kerb
Copper 5470.0-5475.0 Up 110
Lead 1659.0-1660.0 Up 49
Zinc 3110.0-3111.0 Dn 10
Aluminum 2707.0-2708.0 Up 8
Nickel 34800.0-34850.0 Dn 1300
Tin 12500.0-12475.0 Up 175
Aluminum Alloy 2205.0-2215.0 Up 5
Aluminum Alloy 2145.0-2150.0 Up 15
(NASAAC) -By Lisa Yuriko Thomas, Dow Jones Newswires; +44 (0)20 7842

Copper

1600 GMT [Dow Jones] - Speculators added to the short side in Comex copper, according to the latest Commitment of Traders report from the CFTC. Specs were 21,901 net short as of Feb. 6, up from 21,584 net short the week prior. On the commercial side, the long position dropped to 23,167 from a previous 23,530 net long. Open interest increased to 72,035 from a previous 71,448. (ALG)

Oil

CRUDE OIL: Crude oil is lower after Saudi Arabia's oil minister said OPEC may keep its output levels unchanged at its next meeting scheduled on March 15. Oil prices are also lower on speculation that heating oil supplies will be sufficient to meet the late winter demand in US, when the Department of Energy releases data on Wednesday. However, prices are supported on tensions between US and Iran and risk of UN sanctions if Iran refuses to halt uranium enrichment by February 21. Some traders say that this event risk is still a long way off, and prices could correct further before any buying is seen. WTI Nymex crude oil is at $58.55, down $1.34.

Zambia raising sales tax

http://www.mining-journal.com/Breaking_News.aspx?breaking_news_article_id=1814

OIL...

Oil falls after Saudi comments ease worries over OPEC outputLONDON (AFX) - Oil fell after Saudi Arabia's oil minister said OPEC could keep its output levels unchanged at its March meeting if current market conditions remain as they are.At 10.04 am, front-month Brent North Sea crude contracts for March delivery were down 89 cents at 58.12 usd a barrel. On Friday, the contracts hit a month high of 59.63 usd.Meanwhile, front-month New York light sweet crude contracts for March delivery were down 86 cents to 59.03 usd a barrel, after hitting a month high of 60.80 usd Friday.

LME INVENTORY REPORT

Copper up 425 tonnes at 216,050 tonnesLead up 100 tonnes at 36,725 tonnesNickel up 72 tonnes at 3,750 tonnes Aluminium up 1,025 tonnes at 758,300 tonnesTin down 135 tonnes at 10,345 tonnesZinc down 125 tonnes at 98,225 tonnes

OIL...

IEA HEAD MANDIL; Reported saying,...............OIL: IEA HEAD MANDIL; Reported saying,- Well supplied, stocks at an acceptable level, but no room for complacency- Any talk of a further OPEC oil output cut is unwelcome- Oil price still too high at around US$60.00. (Rtrs)

Paper round

http://www.sharecrazy.com/dailies/paper/index.html

Copper

0724 GMT [Dow Jones] China's 44% on-year rise in imports of copper and its semi-finished products in January to 229,077 metric tons verifies physical traders' estimates of resumed copper imports in January; favorable price ratio of SHFE benchmark copper prices to LME 3-month copper, domestic restocking needs, relatively low prices contributed to resumed imports. Figures indicate 22,269-ton rise from December's; may lend support to LME 3-month copper, but can also interpreted as pressure to domestic prices, analysts say. "Refined copper imports are estimated to be around 120,000-130,000 tons (in January)," says Pang Ying, analyst at Star Futures. (HWS)

Copper trading at 5600 @ 8am this morning