Oil above USD 80 a barrel on US growth

Oil prices surged back above USD 80 a barrel in Asian trade on Friday on news the United States has emerged from a long and painful recession after posting its strongest growth in two years.

New York's main contract, light sweet crude for December delivery, was trading at USD 80.08 in morning trade, up 21 cents from the previous day.


Brent North Sea crude for December was up 10 cents to USD 78.14.


After four consecutive contractions, the world's largest economy grew at a seasonally adjusted 3.5 per cent in the September quarter from the previous three months, the Commerce Department said.


The rise was the biggest since the 2007 third quarter, when the subprime mortgage market sparked a global financial crisis that spilled over into the world economy.


"The good news is that the 3.5 per cent annualised rebound in the third quarter GDP (gross domestic product) confirms the most severe and longest recession since the 1930s is over," consultancy Capital Economics said.


"We expect economic growth to continue at about the same pace for the next few quarters as pent-up investment demand is released, inventories are restocked and the boost from the fiscal stimulus continues," it said.


The US is the world's biggest energy consumer and the health of its economy and the consumption patterns of Americans are key influences in the oil market.

Oil moves past $80-a-barrel mark

The price of oil breached $80 a barrel in early trading in Asia, a new high for the year, boosted by the weak US dollar and strong US company results.

US light crude then fell back slightly to $79.56. London Brent was unchanged at $77.77 a barrel.

Oil prices are rising as encouraging US company results fuel optimism for the global economic recovery.

Analysts said the short-term direction of oil is being driven by the dollar and rising equity markets.

"I think we will continue higher as we move into the fourth quarter. Investors think equity earnings are a good guide for the economic outlook so the better-than-expected reporting season is supporting [the oil price]," said Mark Pervan at ANZ.

But there are concerns that sentiment, rather than fundamentals, are driving the oil price, and that once these fundamentals re-establish themselves, the price may fall.

These include spare capacity, stock piles of oil and weak demand among industrialised nations.

Oil price hits new high for 2009

The price of oil has reached a new high for 2009, continuing its recent rise on the back of the weak US dollar and strong US company results.

US crude rose 52 cents to $79.05 a barrel in early trading, before slipping back to $78.78, up 25 cents on Friday's close.

London Brent also traded higher, up 22 cents at $77.11 a barrel.

Oil prices surged last week, as encouraging US bank results fuelled optimism for the global economy.

Oil rises above USD 78, extends week-long rally

Oil prices continued a weeklong rally on Friday in Asia, jumping above USD 78 a barrel, after US gasoline inventories unexpectedly fell.

Benchmark crude for November delivery rose as much as 59 cents to USD 78.17 before slipping back to USD 78.03 by midday Singapore time in electronic trading on the New York Mercantile Exchange.



The contract on Thursday rose USD 2.40 to settle at USD 77.58.


The Energy Information Administration said on Thursday that US gasoline supplies fell 5.2 million barrels while analysts had expected a jump of 1.6 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.


Crude supplies rose 4,00,000 barrels, the EIA said, while analysts had anticipated an 2.2 million barrel gain.


Until this week, oil had bounced between USD 65 and USD 75 since May.


"The transition to a USD 70 to USD 80 range is now in full cry," Barclays Capital said in a report. "We expect further transitions upward to occur in line with improvements in the underlying market data."


A falling US dollar has also helped boost oil this week.


In other Nymex trading, heating oil was steady at USD 2.02 a gallon.



Gasoline for November delivery held at USD 1.95 a gallon. Natural gas for November delivery jumped 3.0 cents to USD 4.51 per 1,000 cubic feet.

Oil higher in Asian trade amid dollar weakness

Oil rose further in Asian trade on Wednesday, extending overnight gains after the dollar fell to a new 2009 low against the euro, analysts said.

Renewed hopes of better energy demand as the global economic recovery continues and the arrival of cold weather in the United States, the world's largest oil user, also lent support to crude prices, they said.

New York's main contract, light sweet crude for November delivery rose 70 cents to USD 74.85 a barrel.

Brent North Sea crude for November delivery advanced 54 cents to USD 72.94 a barrel.

Expectations that the dollar will continue to languish against the euro and other major currencies will boost the crude market, analysts said.

"We expect a further fall of the US currency over the next two weeks," said Dariusz Kowalczyk, chief investment strategist with SJS Markets financial services firm in Hong Kong.

The euro reached USD 1.4876 during intra-day trading Tuesday, its highest level since August 2008, before easing to USD 1.4852 in late US trade.

With little reprieve seen for the dollar, investors have sought to protect themselves against the greenback's fall by buying hard assets such as oil and other commodities.


A struggling greenback tends to boost crude prices particularly because the dollar-denominated commodity becomes cheaper for foreign buyers holding stronger currencies.

Oil rises above USD 72 ahead of US company results

Oil prices rose above USD 72 a barrel on Monday in Asia as investors looked to a slew of US corporate earnings reports this week for signs of economic recovery..

Benchmark crude for November delivery was up 44 cents at USD 72.21 by midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 8 cents to USD 71.77 on Friday.

Crude investors will be eyeing third quarter company results and forecasts for the rest of the year for clues about the strength of the US economy.



Top banks JPMorgan Chase & Co., Goldman Sachs Group Inc., Citigroup Inc. and Bank of America Corp. report this week along with Google Inc., Southwest Airlines Co., Intel Corp., IBM Corp., General Electric Co., and Johnson & Johnson.



A more optimistic crude demand forecast by the International Energy Agency on Friday helped boost trader confidence.



The Paris-based IEA, which advises oil-consuming countries, said demand will likely reach 86.1 million barrels a day in 2010, up 1.7 percent from this year.

Kuwaiti oil minister Sheik Ahmed Al Abdullah Al Sabah told the state news agency on Sunday that an oil price range between USD 60 to USD 80 a barrel is acceptable -- echoing earlier remarks by Saudi Arabia.

The two Middle Eastern countries are members of the Organisation for Petroleum Exporting Countries, which accounts for about a third of the world's oil production.

In London, Brent crude rose 48 cents to USD 70.48 on the ICE Futures exchange.

Oil rises in Asian trade on improved sentiment

The analysts are of the view that the oil extended its reach in Asian trade on Tuesday to lift in the part by improved investor capacity about the global economy's recovery prospects in the markets.

Oil extended its rise in Asian trade on Tuesday, lifted in part by improved investor sentiment about the global economy's recovery prospects, analysts said.


Comments by oil kingpin Saudi Arabia that the market was "very stable and healthy" were also seen providing support to prices, they said.


New York's main contract, light sweet crude for October delivery firmed 20 cents to USD 68.22 a barrel.


Brent North Sea crude for October delivery put on 37 cents to USD 66.90.
"With growth picking up in virtually every country, a self-reinforcing process or positive feedback loop' is developing," analysts from Bank of America-Merrill Lynch said in a report.


"Growth in individual countries is stimulating global growth, via trade and confidence channels. This adds to our confidence in the sustainability of the recovery."
Saudi Oil Minister Ali al-Naimi said on arriving in Vienna on Monday ahead of a meeting of the OPEC crude cartel that current oil price levels were satisfactory.


"The market is in very good shape: very well-supplied," Naimi told reporters. "The price is good for everybody, consumer (and) producer," hovering recently between 68 and 73 dollars per barrel, he added.


He reiterated the view of several fellow OPEC ministers that further cuts to oil production quotas were unlikely and said Wednesday night's meeting would seek to enforce compliance with existing reductions "as best we can.

Iran to import Venezuelan petrol

Venezuela has agreed to export petrol to Iran, in a sign of closer ties between two of America's most vocal adversaries.

At the end of a two-day visit to Iran, President Hugo Chavez said Venezuela would supply 20,000 barrels of petrol a day to the country.

Iran is a major oil exporter but lacks domestic refining capability.

Iranian leaders expressed support for the Venezuelan socialist leader's anti-American policies.

Mr Chavez has been using Venezuela's oil wealth to counter US influence in Latin America and to boost ties with nations not friendly with Washington.

"Venezuela has agreed to export 20,000 barrels of petrol daily to Iran from October in a deal worth $800 millon (£485m)," he was quoted as saying by Iranian media.

He added: "This amount will be deposited in a fund established in Iran and will be used to finance purchase of machinery and technology from Iran."

ONGC to ramp up oil production at Imperial

India's Oil and Natural Gas Corp (ONGC) plans to rapidly ramp up crude oil production of Imperial Energy, the firm it acquired early this year, and consolidate operations even as it looks at opportunities to expand its presence in western Siberia.

ONGC Videsh Ltd, the overseas investment arm of the state-run explorer, is currently in the process of consolidating operations.



"When we took over (Imperial in January 2009), oil production had fallen to below 6,000 barrels per day. We were able to restore it to about 8,200 bpd by May and have now ramped it up to 11,200 bpd," an official said.



As a confidence building measure, India's Petroleum Minister Murli Deora visited the Imperial Energy headquarters at Tomsk and met Tomsk Governor Viktor Kress.



The visit was aimed at helping the transition of the company from British parentage to an Indian one.



Deora, who flew into this sleepy western Siberia town on Sunday evening, was given a presentation on Imperial operations and was informed that the output would be ramped up to about 16,000 bpd by the year end. By the end of 2010, the production is targeted to cross 25,000 bpd.

Oil recovers in Asian trade ahead of US jobs data

Oil rebounded in Asian trade on Friday ahead of the release of a closely monitored US jobs report that will give fresh clues on the health of the world's biggest economy, analysts said.

New York's main contract, light sweet crude for October delivery, advanced 14 cents to USD 68.10 a barrel.



Brent North Sea crude for October delivery was five cents higher at USD 67.17.



The US jobs report, seen as an indicator of economic momentum, will give analysts further clues on whether the American economy is recovering from a recession that began in December 2007.



"Commodity markets will be watching the US employment report for August to be released tonight," the Commonwealth Bank of Australia said in a report.



A smaller-than-expected decline last week in the number of US new claims for unemployment benefits, reported by the Labor Department Thursday, put investors on alert.



"The data are a sobering reminder that the labor market, and consumer spending, will be a drag on growth prospects," said Patrick O'Hare of Briefing.com.



A Credit Suisse report that predicted Asian economies would continue to rebound firmly from the global slump,

boosted by improving domestic demand and exports, is likely to bode well for oil demand.

Oil price touches high for 2009

The price of oil has hit its highest level of the year, boosted by sharp rises in Chinese stocks and rising shares on Wall Street.

The price of US crude rose to $74.15 a barrel before settling at $73.89, a gain of 98 cents. London Brent was up 86 cents at $74.19.

The oil price hit $147 a barrel last July and fell below $74 last October, a level it has not breached since.

Worldwide oil prices have been extremely volatile this year.

Prices have been affected as much by sentiment as by fundamentals of demand and supply.

Ben Bernanke, the chairman of the Federal Reserve, said that prospects for a return to growth in the near term appeared good in the US and abroad.

Oil cos hike ATF price by 4.5 pc

Even as the aviation industry is crying for a bail-out, state-run oil firms on Saturday hiked jet fuel prices by 4.5 percent in step with firming international oil rates, the second time in a month.

Indian Oil, Bharat Petroleum and Hindustan Petroleum raised Aviation Turbine Fuel (ATF) rates in Delhi by Rs 1,662 per kilolitre to Rs 38,585 per kl effective midnight tonight, an IOC official said on Saturday.

Global crude oil prices have firmed up during August on signs of recovery in major economies of the world including India. Crude oil prices rose to USD 74 per barrel last week.

The hike in ATF or jet fuel prices comes on the back of Rs 585 per kl or 1.6 per cent hike on 1st August.

In Mumbai, home to the nation's busiest airport, the rate will go up from Rs 38,098 per kl to Rs 39,830 per kl, the official said.

The rise in ATF price, which constitutes 40 percent of airlines' operating cost, may further put pressure on cash-strapped domestic carriers.

The state oil firms had in July cut jet fuel prices on falling international rates and the two hikes this month has wiped away the decline.

Jet fuel in Kolkata will be dearer at Rs 46,819 per kl from Rs 45,060 per kl, while in Chennai the price has been raised by Rs 1,816 per kl to Rs 42,605 per kl. The average hike works out to Rs 1,742 per kl.



ATF prices had peaked to Rs 71,028.26 per kl (in Delhi) in August last year on international crude prices touching a historic high of USD 147 a barrel.

But subsequently, the rates had come down, slashed every month till October and twice a month from November.

The three firms revise jet fuel rate every fortnight based on trends in international markets.

Two days ago, Civil Aviation Minister Praful Patel had raised in the union cabinet meeting the issue of ATF prices in the overall context of the health of the aviation sector, after which it was decided to set up a Group of Ministers (GoM) soon to study the impact of high jet fuel prices on the aviation industry and recommend measures to bring down its burden on operational costs of the airlines.

Patel said the base price of ATF in India was "much higher" than in most countries.

Oil declines below $62 a barrel

Oil has dipped below $62 a barrel, ending four days of gains, as uncertainty over the outlook for energy demand persists.

"I think we could see the market below $60 again next week," said an oil dealer in London.

US crude fell 14 cents in morning trading to $61.88, while Brent crude was down 30 cents at $63.45.

Oil prices have tumbled nearly $10 since early July, partly reversing last quarter's 40% surge.

Figures released on Thursday showed a big increase in US gasoline stockpiles last week. This was despite the 4 July Independence Day holiday, when the summer driving season typically peaks.

The US remains the world's largest energy consumer.

Rogue trades cost oil broker $10m

A rogue trader at a London oil broker caused his employer to lose $10m (£6m) after making unauthorised trades.

PVM Oil Futures said it was a "victim of unauthorised trading" on Tuesday, 30 June, and said it was now conducting a full investigation.

The rogue trader, believed to be Steve Perkins, has been suspended.

PVM said it had informed the Financial Services Authority and the InterContinental Exchange (ICE), the location for much European oil trade.


Firms have systems to pick up oddities and anomalies... The question is how fast were they able to get on top of it and deal with it
Nick McGregor, Redmayne Bentley

The trades are thought to have caused a jump in the price of Brent crude oil on Tuesday. PVM said it was now conducting business as normal.

"As a result of a series of unauthorised trades, substantial volumes of futures contracts were held by PVM. When this was discovered, the positions were closed in an orderly fashion. PVM suffered a loss totalling a little under $10m," the company said in a statement.

"There are a range of procedures that are followed to look at trading patterns, price movement and levels of activity," explained David Peniket, the president of ICE Futures Europe, which trades futures and energy and commodity contracts.

"It will investigate and follow up, and where appropriate, action will be taken," he added.

Kingfisher Airlines hikes fuel surcharge by Rs 400

Air carrier Kingfisher Airlines on Wednesday increased fuel surcharge by Rs 400 on all domestic sectors with immediate effect.

"Consequent upon successive increases in the price of ATF, the fuel surcharge for travel on all domestic sectors of Kingfisher Airlines will be increased by Rs 400 with effect from Wednesday," a Kingfisher Airlines spokesperson said.


The hike would apply uniformly for travel across all distances and all classes of travel including Kingfisher Red, the spokesperson said.


The increase in fuel surcharge comes following an over 12 per cent rise in ATF prices by state-run oil firms on 15th June.

Oil above USD 72 as traders eye economic recovery

Oil prices hovered above USD 72 a barrel on Friday in Asia near an 8-month high as investors eyed signs that the global recession may be easing.

Benchmark crude for July delivery fell 31 cents to USD 72.37 a barrel by midday Singapore time in electronic trading on the New York Mercantile Exchange.



On Thursday, it rose USD 1.35 to settle at USD 72.68, the highest since October.



An improving crude demand outlook helped bolster prices. yesterday, the International Energy Agency in Paris said in its monthly survey that global oil demand would fall by 2.9 percent this year, better than its May forecast of a 3 percent annual fall.



It was the organisation's first upward estimate of demand in 10 months.



"Oil prices are discounting positive economic growth by around the end of the third quarter," said Christoffer Molke-Leth, head of sales trading for Saxo Capital Markets in Singapore. "If that doesn't happen, prices at this level are overbought."



Prices have more than doubled since March as investor optimism grew that the worst of a severe US recession was over.



The Labor Department on Thursday reported that the number of newly laid-off Americans filing for jobless benefits fell last week by 24,000 to 601,000 - better than economists had forecast.

Industry asks Govt to decontrol fuel price, restore tax holiday

Freeing petrol and diesel prices from official control, restoring tax breaks on natural gas production and tax holiday for private oil refiners should be part of the government's agenda in the first 100 days, industry wished.

The Petroleum Federation of India, the apex body of public and private oil firms has submitted to the Oil Ministry a 100-day agenda for the new Government.


On top of its list is decontrol of petrol and diesel prices. Currently, public sector retailers sell auto fuel at Government-dictated rates which the private sector competition is unable to match in times of high input cost (crude oil prices).


Petrofed has asked the Government to operationalise the 28th March 2002, resolution that freed petrol and diesel price from administrative control. State retailers fixed retail selling price every fortnight based on international rates till 2004 when the UPA came into power for the first time and brought back administrative controls.


The Federation also wanted the Government to gradually phase out subsidy on domestic LPG through provision of subsidy to families through coupons/smart cards.

Also, it wanted the Government to provide targeted direct subsidy administered through a smart card system for distribution of kerosene.


It wanted the tax holiday on natural gas to be restored and the same extended to private oil refiners.



The Finance Minister P Chidambaram had in 2008 denied natural gas production of seven year break from payment of income tax like the one enjoyed by producers of crude oil and Petrofed wanted this to be restored. The tax holiday should be enhanced to 10 years from 7 years currently.


"Provide flexibility to claim tax holiday for oil as well as gas production in any 10 years during the first 15 years after the commencement of commercial production under section 80IB(9) of Income Tax Act," its memorandum said.


Petrofed also wanted the seven-year income tax holiday on setting up of refineries to be extended to the private sector.


Currently, this is available only to public sector firms setting up units by March 2012. It also suggested granting 'declared goods' status to natural gas and raising price of gas sold under administered price regime.


Further, it asked the Government to unburden the exploration and production sector of sticking Service Tax since it cannot be set-off, include petroleum products under the Goods and Services Tax (GST) regime, and waive fully the custom duty on import of materials used in transmission projects and removal of anomaly in Naphtha taxation.



Petrofed wanted the Finance Ministry to enlarge the list of goods that could be imported duty-free while also simplifying custom procedures for drilling tools and equipments imported under duty concessions.


"Provide single window clearance for the upstream companies to expedite the process of clearance related to exploration blocks and reduce time and cost overruns," it said.


It recommended developing Petroleum Economic Zone for developing a world-class global upstream services hub in India.

Oil price rally comes to a halt

Oil prices have fallen back with investors growing more cautious as oil approaches the $70-a-barrel mark.

US light, sweet crude oil was down 86 cents at $67.69 a barrel, while Brent crude fell 61 cents to $67.56.

US President Barack Obama has begun a tour of the Middle East, where he will raise the issue of volatile oil prices with Saudi Arabia's King Abdullah.

He is also expected to reassure Saudi that demand for oil will not dry up. Earlier, oil prices had reached $68.64.

"The Saudis want to be assured that there will be a future for oil consumption. They want security of demand," said Simon Wardell, senior oil analyst at Global Insight.

"Obama for his part will be persuading them to continue investing in new production, which is not likely to have too much impact on spot prices in the near term, but will come five or 10 years down the road."

Weaker dollar

The price of oil had initially risen in early trading on Wednesday.

The weakening dollar had pushed up oil prices, which tend to rise when the US currency falls.

In recent weeks, the dollar has declined against a range of currencies, hitting a seven-month low against sterling on Wednesday.

"The continuing softening of the dollar will go on adding strength to oil and equities," said Peter McGuire of Commodity Warrants Australia.

"I think $70 is possible by the end of the week and $74 to $75 by the end of the month."

Oil had briefly touched $69 a barrel on Tuesday, a new seven-month high, before closing at $68.55.

Although the oil price has more than doubled since January, when it was trading at $32.70 a barrel, it is still well below the record $147 a barrel seen in July last year.

Oil prices rise towards USD 67 in Asian trade

Oil prices rose in Asian trade on Monday to near seven-month highs, fuelled by a rise in regional equities markets and a weakening US dollar, dealers said.

New York's main futures contract, light sweet crude for July delivery, rose 56 cents to USD 66.87 a barrel.

Brent North Sea crude for delivery in July advanced 54 cents to USD 66.06.


"Oil is heading up this morning. It's actually moving in sync with stock markets in Asia.... What's really supporting oil is primarily investors buying commodities as the US dollar weakens," said Victor Shum, an analyst with Purvin and Gertz energy consultancy in Singapore.


A weak US currency makes dollar-priced oil cheaper for holders of stronger currencies and in turn, tends to stimulate demand and push prices higher.



The US dollar is losing allure among investors amid growing signs of a recovery in the global economy as they seek higher yields from other foreign currencies, analysts said.


Investors usually favour the US dollar because of its safe haven status in times of economic uncertainty despite the low returns compared with other units.


However, Shum cautioned that the rally was "very fragile" as global energy demand remained weak.


"The reality is that there is a big contradiction confronting oil markets today. Fundamentals are very weak but oil prices have increased by 50 per cent since last December amid a glut of oil," he said on Monday.

Oil holds above USD 60 in Asia

Oil held above USD 60 a barrel in Asian trade on Monday ahead of a meeting this week of the Organisation of Petroleum Exporting Countries (OPEC).

New York's main futures contract, light sweet crude for delivery in July, was down 33 cents to USD 61.34 a barrel in morning trade.


Brent North Sea crude for July delivery retreated 23 cents to USD 60.55.


Prices eased as investors cashed in on profits ahead of the OPEC meeting on Thursday.


"Traders are taking profit from the markets," said Mark Pervan, a senior commodities analyst with ANZ Bank in Melbourne.


"It's probably a view that there is less likelihood of an output cut. OPEC has been fairly quiet on cutbacks so far," he said.


Algerian oil Minister Chakib Khelil was quoted by Newswires as saying that he expected oil prices to hit USD 70 dollars a barrel next year.



Oil at USD 70 a barrel is widely seen as the sustainable level for producers to resume large efforts to search for oil and gas.


The global economic crisis which towards the end of 2008 has seen energy demand plummets, dragging prices along with it.


Oil prices have fell from a record around USD 147 per barrel in July to about USD 32 in December as demand dropped off but have since risen gradually.