OPEC: High and volatile prices may be new norm

High and volatile crude costs may signal "a new price era," a senior OPEC official said, insisting that the 11-nation cartel is doing all it can to bring prices down to more reasonable levels. OPEC acting secretary-general Mohammed Barkindo defended the group's decision to keep its production target steady at 28 million barrels a day. OPEC made clear that it would keep close tabs on prices, which have recently fallen to five-month lows, and consider a cut in output quotas this year.

The comments came as oil prices fell almost 3% yesterday, dropping below $64 a barrel as worldwide demand and supply threats ease. After a seven-day sell-off, crude futures are at their lowest since late March.

(2006-09-13 18:16:41 SGT) [Energy] Permalink

Oil rout deepest in 16 yrs

today.reuters.com :

Oil prices have fallen as much as $16 from their peaks, their steepest reversal in 16 years, in a correction that traders say may be harder to shake off than past setbacks over the market's four-year rally. Technical analysts who study past price action for future direction, say the drop through the 200-day moving average last week and this week's fall below a three-year trend line - intact since mid-2003 - both send worrying signals.

U.S. crude has dropped nearly $15 to hit a near six-month low of $63.53 a barrel on Wednesday, a fall only a hair smaller than those in August-November 2005 and October-December 2004. In those cases, oil recovered to make new highs within five and eight months, respectively.

While many analysts say the worst may not be over yet in the latest shake-out, most also agree that there remains scope for another attempt at surpassing the previous summit. "If the fall is fast enough and hard enough, then there's momentum selling on the other side - that can have a sustained influence on prices, weeks or months," says Tobin Gorey, commodities strategist at the Commonwealth Bank of Australia. "I do think this dip could well outdo those last two falls, but I don't think it destroys the story."

(2006-09-13 17:56:20 SGT) [Energy] Permalink

Canadian crude oil production dropped in 2005, while profits soared

peakoil.com -> cbc.ca :

Canada's oil production dropped in 2005 for the first in six years as conventional supplies wane, but that should change as oilsands operations continue their rapid ramp-up. Companies pumped out 858 million barrels of crude last year, down 2.3% from the year before. One of the key reasons for this drop was a major fire at Suncor Energy, which cut production at Canada's second largest oilsands operation in half for three-quarters of the year.

Any increase in overall Canadian oil production will have to come from greater oilsands output, as "conventional oil has been on a mild and extended decline since about 1997," said Greg Stringham, vice-president of markets for the Canadian Association of Petroleum Producers.

While Canadian oil production dipped slightly last year, soaring prices for crude pushed oilpatch operating profits by 50% last year, going from close to $21 billion in 2004 to over $30 billion in 2005. Last year, Canada supplied almost 10 per cent of America's crude-oil needs with 99 per cent of oil exports heading south of the border. Despite large oil production in Alberta, Canadian refineries still relied on foreign oil imports to supply 55% of its refining needs - particularly to feed refineries in Ontario, Quebec and the Atlantic provinces.

- Funny how they keep calling tar sands "oil sands". But anyway, wait till Canada's natural gas falls off a cliff, then we'll see how these tar/oil sands operations fare.

(2006-09-13 13:40:49 SGT) [Energy] Permalink

Keep fuel, gasoline prices high, IMF chief urges governments

channelnewsasia.com :

IMF chief Rodrigo Rato has criticised attempts to depress fuel prices in the United States, China and some other countries, and advocated raising prices instead of offering tax breaks or subsidies. Rato told a seminar organised by OPEC that domestic pricing policies for refined fuels should "truly reflect the scarcity of the resource", high world crude prices, and collateral costs such as pollution.

The suggestion comes at a time when world oil prices are still at high levels despite a recent decline from July's peak of over US$78 a barrel. Rato acknowledged that there would be some political resistance to the idea of raising prices. However, he pointed to successful experiences in Indonesia, Jordan and the United Arab Emirates.

(2006-09-13 13:26:41 SGT) [Energy] Permalink

Public Transport Council approves 1.7% fare increase for bus, trains

channelnewsasia.com :

From October, adult EZ-link fares for buses and trains will increase by 1 to 3 cents, which amounts to an overall fare hike of 1.7%. Senior citizen off-peak EZ-link fares will correspondingly increase by 1 cent. There are no increases in case fares for buses, single trip tickets for trains, child and student fares and monthly student and NS concession passes.

In August, public transport operators SMRT Corp and SBS Transit applied to the Public Transport Council for these increases. The Council says that given the positive economic outlook, it assessed that there were no "extenuating circumstances" to vary or reject the proposal. It has approved a "tiered increase," depending on the distance travelled so that those who make short trips or transfers will pay less.

- We all knew it was inevitable, didn't we.
For earlier blogs on some of the recent price inflation going-ons in Singapore, click here.

(2006-09-13 13:08:56 SGT) [Biz] Permalink

Crude oil falls below $64 on forecast for lower global demand

bloomberg.com :

Crude oil dropped below $64 a barrel in New York after the International Energy Agency cut its global consumption estimates. Global oil demand will average 84.7 million barrels a day this year, 100,000 barrels less than was forecast last month, the Paris-based IEA said.

Crude oil for October delivery fell to $63.90 a barrel on the New York Mercantile Exchange. Futures touched $63.87, the lowest since March 27. Futures have declined seven days, the longest stretch since October 2003. Oil has plunged 17% from a record $78.40 a barrel on July 14 on signs demand growth will slow and as Middle East tensions ease.

OPEC, which supplies 40% of the world's oil, agreed to keep its output target unchanged at 28 million barrels a day. Qatar's oil minister Abdullah bin Hamad al-Attiyah said that the group may consider cutting output at its next meeting in December if prices fall.

(2006-09-13 12:58:25 SGT) [Energy] Permalink

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