Middle East Aggregator

Oil prices dropped more than a dollar on Monday after rocketing to record heights near 140 dollars per barrel late last week, but some analysts warned of a bubble that could burst soon.

Crude soared beyond 139 dollars on Friday after a shock jump in US unemployment sent the dollar reeling and Wall Street plunging by more than three percent amid fears of sharply slower economic growth.

New York's main oil futures contract, light sweet crude for July delivery, gave back 1.27 dollars to 137.27 dollars a barrel on Monday.

The contract had spiked on Friday by 10.75 dollars a barrel -- the biggest-ever one-day jump -- after soaring to an all-time high of 139.12 dollars.

On Monday, Brent North Sea crude for July delivery slid 1.73 dollars to 135.96. Brent had hit a lifetime pinnacle of 138.12 and gained 10.15 dollars in value on Friday.

"The extreme price volatility that we are now seeing is characteristic of bubbles that are about to burst," said Capital Economics analyst Julian Jessop.

"The next big move is therefore likely to be down." (AFP)

Labels: Oil

The oil price reached a new record of more than $138 a barrel after a report suggested it could reach $150 by July amid rising geopolitical tensions.

Crude oil in New York gained more than $10 to hit $138.54 a barrel.

The rise came as US shares fell sharply in response to unemployment figures reaching 5.9%, a four-year high.

Increased demand by China and India is also pushing up oil prices along with the weaker dollar, which has made commodities an attractive investment.

Crude oil hit a record high of $135 a barrel last month.

The BBC's North America Editor, Justin Webb, says the gloomy figures are a reminder to all Americans that the nation faces serious economic problems and perhaps even a recession.

Oil prices were given a boost on a report by Morgan Stanley analyst Ole Slorer, who suggested the price of oil could rocket to $150 as early as July.

Some analysts have suggested that prices would reach as high as $200 a barrel during the next 18 months. (BBC)

Labels: Oil

Iraq should boost crude oil export capacity to 6 million barrels a day, nearly three times the amount the country currently sends to international markets, a top Kurdish political leader urged Tuesday.

The goal set by Nechirvan Barzani, the prime minister of Iraq's semiautonomous Kurdish region, gave no proposed timetables and would far exceed even the nation's peak oil output shortly before the 1990 invasion of Kuwait. But the Kurds and the Iraqi government are locked in a dispute over the rights to sign oil contracts, and export levels remain a critical issue for both sides.

"We think Iraq needs to export more oil," Barzani told a news conference.

He added that talks over Iraq's long-awaited oil law will resume within two weeks in Baghdad, according to Dow Jones Newswires.

On Monday, Iraq's oil ministry said the country's oil production and exports have risen to their highest levels since the March 2003 U.S.-led invasion.

Iraq's exports reached 2.11 million barrels a day in May while the total output - which include exports and domestic consumption - stood at about 2.5 million barrels a day, spokesman Assem Jihad told The Associated Press. (AP)

Labels: Iraq, Oil

Threatened at home by a massive Al Quaeda infiltration at all levels of society, and intimidated by neighboring ascending Iran with its fundamentalist Shia push, - Saudi Arabia’s rulers embark on a multi-tier homeland security project to protect themselves and their oil infrastructure, creating a market of more than $115 billion over the coming decade. This prediction is part of a new market research report published on May 27 by Homeland Security Research Corp. (HSRC), titled: “Saudi Arabia Homeland Security Market – 2009-2018.”

Oil and policy experts around the world are unanimous in their opinion that a significant damage to Saudi Arabia’s oil exporting facilities or a major regime changing event in the kingdom might precipitate a debilitating economic crisis, possibly plunging the world’s economy into a deep recession, caused by a sharp increase in energy prices.

Saudi Arabia is the only country in the world where a vast majority of its homeland security components report directly to the royal court, and not to the ministries of Defense, Security or Interior. In the 1950s, the Kingdom dedicated about 30% of its GDP to protecting itself. Currently, the allocation for HLS is about 5%, a modest expenditure by comparison.

Over the coming decade, Saudi Arabia’s homeland security market is forecasted to be the largest after that of the U.S. The Kingdom boasts 24 separate agencies and organizations, arranged in a three-tier structure, employing more than 250,000 personnel (a number that is expected to grow by an additional 35,000 over the forecast period). (Market Watch)

Labels: Oil, Saudi Arabia

Given their significant level of oil and gas revenues for over three decades, there can be little debate that the oil exporting countries of the Persian Gulf have failed economically. Their average annual per capita economic growth was negative from 1975 to 2002 and has only become positive and high since 2002 because of booming energy markets, underscoring their continued dependence on oil and gas.
At the same time, depletable oil and gas reserves, the underlying source of all wealth in the region and the birthright of all current and future citizens, has resulted in anything but equity among the citizenry. While oil has supported government revenues, economic failure and social injustice has become all pervasive.
It is time for a change while oil and gas reserves last. Comprehensive sovereign wealth funds, or SWFs, will afford these countries the means to achieve superior economic and social results. SWFs will take easy money away from the hands of governments and of rulers, military expenditures, waste and corruption are likely to be reduced and there will be better chance of adopting and implementing rational economic policies.
At the same time, equal annual real payouts to each citizen today and over time will support equity across generations, while promoting more rational consumption patterns because citizens will be free to do what they wish with their income instead of governments and rulers spending it on their behalf and to preserve their own power. In this way SWFs could have an all-encompassing impact on economic developments and on the lives of citizens in the Persian Gulf. (Asia Times)

Labels: GCC, Iran, Oil

Oil prices shattered records Wednesday - speeding to an intraday high above $132 a barrel - after the government said crude and gasoline stockpiles decreased last week, surprising analysts who were expecting an increase.

U.S. light crude for July delivery reached as high as $132.25 a barrel, and was up $3.10 to $132.08 a barrel on the New York Mercantile Exchange at 12:53 p.m. ET. Prior to the 10:30 a.m. ET report, oil was down 29 cents to $128.69.

"There is a tremendous amount of fear and greed driving this market," said Stephen Schork, publisher of the industry newsletter The Schork Report. "This is a runaway train. I don't think the fundamentals justify the runup."

Earlier Wednesday, oil prices soared past $130 a barrel for the first time ever amid continuing supply concerns and a weakening dollar. The contract retreated just before the government data were released.

In its weekly inventory report, the Energy Information Administration said crude stocks fell by 5.4 million barrels last week. Analyst expected crude oil stocks to be up 900,000 barrels, according to a survey from Platts, an energy research firm.

Weather along the Gulf of Mexico's coast contributed to the shortfall, according to analysts. (CNN)

Labels: Oil

The price of oil rocketed to a record high 129.58 dollars on Tuesday as investors dived into a market driven higher by concerns about tight global energy supplies and strong demand.

After striking the historic summit, New York's main oil futures contract, light sweet crude for June delivery, pulled back slightly to stand at 129.24 dollars a barrel, up 2.19 dollars on Monday's close.

London's Brent crude contract for July hit an all-time peak of 127.90 dollars Tuesday. It later stood at 127.46 dollars, up 2.40 dollars.

The market was reacting to oil supply disruptions in France and OPEC's unwillingness to hike output, analysts said.

"Overall, (oil) market participants are currently choosing to focus on the supply side, with investors doubting that robust demand for distillate fuels from Asian, Middle Eastern and other emerging market economies would be met with enough supply," said Sucden analyst Andrey Kryuchenkov.

French fishermen demanding state aid to cope with soaring fuel costs blockaded France's largest Mediterranean oil depot at Fos-sur-Mer on Tuesday, escalating a 10-day protest movement. (AFP)

Labels: France, Oil, OPEC

President Bush said Saudi Arabia's small increase in oil production will not solve soaring U.S. fuel prices, but he defended the wealthy kingdom Saturday against American lawmakers "screaming the loudest" for Riyadh to open its spigots.

Bush also encountered bitter Arab criticism that he favors Israel too heavily and was bluntly questioned by Egyptian President Hosni Mubarak about whether he is serious about peacemaking. Bush said he was "absolutely committed" to reaching an Israeli-Palestinian agreement by the end of his presidency next January. But there was no sign during Bush's five-day Mideast trip that the two sides are moving closer toward an accord.

"It breaks my heart to see the vast potential of the Palestinian people really wasted," Bush said. Pledging the creation of an independent homeland, Bush said "It'll be an opportunity to end the suffering that takes place in the Palestinian territories."

With Israel's occupation of Arab lands captured in the 1967 Mideast war entering its fifth decade, most Palestinians live in dire poverty. (AP)

Labels: Oil, Saudi Arabia, U.S.

U.S. President George W. Bush, visiting the Saudi capital on Friday, hoped to formalize new agreements that would give the relationship between the two countries a boost.
Among them was an agreement for the U.S. to assist the kingdom in developing civilian nuclear power. Another agreement involves U.S. promises to help protect any Saudi nuclear infrastructure with training, the exchange of experts and other support services as needed. Hadley said it would not involve U.S. troops.
But the rising price of oil commanded attention.

Saudi Arabia's leaders made clear they see no reason to increase oil production until customers demand it, apparently rebuffing Bush amid soaring U.S. gasoline prices.
It was Bush's second personal appeal this year to King Abdullah, head of the monarchy that rules this desert kingdom that is a longtime prime U.S. ally and home to the world's largest oil reserves. But Saudi officials stuck to their position that they will only pump more oil into the system when asked to by buyers, something they say is not happening now, the president's national security adviser told reporters.  (Reuters)

Labels: Nuclear Power, Oil, Saudi Arabia, U.S.

Saudi Arabia, the world's biggest oil exporter, has increased its output to meet rising demand and to compensate for declining production from other countries.

Ali al-Naimi, the Saudi oil minister, said on Friday that from May 10 the kingdom had raised supplies by 300,000 barrels per day.

Saudi Arabia's output in June will reach 9.45 million barrels per day, al-Naimi said.

The statement came hours after George Bush, the US president, arrived in Riyadh for talks with King Abdullah of Saudia Arabia.

King Abdullah led a red-carpet welcome for Bush and his wife Laura as he landed at King Khaled airport.

Before Bush arrived in Saudi Arabia, Dana Perino, White House spokeswoman, told reporters that oil supply would be on the agenda.

"We do count on the Opec (Organisation of Petroleum Exporting Countries) to keep adequate [oil] supplies out there, so the president will talk again with the king about that," Perino said. (Al Jazeera)

Labels: Oil, OPEC, Saudi Arabia, U.S.

Saudi Arabia's leaders made clear Friday they see no reason to increase oil production until customers demand it, apparently rebuffing President Bush amid soaring U.S. gasoline prices.

It was Bush's second personal appeal this year to King Abdullah, head of the monarchy that rules this desert kingdom that is a longtime prime U.S. ally and home to the world's largest oil reserves. But Saudi officials stuck to their position that they will only pump more oil into the system when asked to by buyers, something they say is not happening now, the president's national security adviser told reporters.

"Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy," Stephen Hadley said on a day when oil prices topped $127 a barrel, continuing to set records. "What the Saudis wanted to tell us was we're doing everything we can do ... to meet this problem, but it's a complicated problem."

The Saudi oil minister, Ali al-Naimi, said the kingdom decided on May 10 to raise production by 300,000 barrels, at the request of customers, and that increase was sufficient.

"Supply and demand are in balance today," he told a news conference. "How much does Saudi Arabia need to do to satisfy people who are questioning our oil practices and policies?" (AP)

Labels: Oil, Saudi Arabia, U.S.

Oil prices shot to a new record near $127 a barrel Tuesday on concerns that Iran may consider cutting crude oil production. Gas prices, meanwhile, rose to a new record over $3.73 a gallon Tuesday, and their advance shows little sign of slowing with Memorial Day weekend, the traditional start of the summer driving season, just 10 days away.

Light, sweet crude for June delivery rose as high as a record $126.98 a barrel in midday trading on the New York Mercantile Exchange Tuesday before retreating to trade up $1.70 at $125.93.

Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill., said traders reacted to news reports that Iran's government is considering cutting crude oil production. James Cordier, president of Tampa, Fla., trading firms Liberty Trading Group and OptionSellers.com, said the news quickly made its way around trading floors.

In later news reports, Iranian officials denied that production cuts were imminent, but said a reduction has been discussed. Cordier doubts Iran will actually cut oil production. The nation's economy is in bad shape, Cordier said: "They need all the petrodollars they can get." (AP)

Labels: Iran, Oil

Oil prices have fallen, after setting record highs every day last week.

US light crude slid 53 cents to $125.43 a barrel in New York, while London's Brent crude fell 55 cents to $124.85.

Last week, a mixture of strong demand, currency fluctuations, and continuing supply concerns, pushed US light crude to a record of $126.20 in New York.

Oil producers group Opec and analysts have suggested that oil may climb as high as $200 a barrel, a level that could hamper the global economy.

Oil prices have jumped 25% since the beginning of the year when they first broke through $100 a barrel.

Since then, trading has been volatile, dominated by geopolitical and economic concerns. (BBC)

Labels: Oil

At this huge oil field in southwest Iran, one building stands out among the pumps and maze of pipelines: On its roof in giant letters, big enough for satellites or pilots to see, are the words: "We can do it."

The slogan, made famous by Iran's revolutionary leader, Ayatollah Ruhollah Khomeini, highlights the country's new drive to tap its oil riches on its own - without Western investment or technological know-how - as Iran faces a threat of tighter U.N. sanctions and American financial pressure over its nuclear ambitions.

The Azadegan field in southwestern Iran showcases the bid: the first major field to be developed solely by Iranian companies. Pumping began in February in the vast oil basin - off limits to the public, but The Associated Press received permission to tour the site recently with a government escort.

The self-sufficiency drive has become a vital test of how well Iran can ride out more Western sanctions - and possibly rake in billions of dollars more in oil revenues as prices hit record highs. It also is shaping up as a political gamble for hardline President Mahmoud Ahmadinejad, the main proponent of using local firms.(AP)

Labels: Iran, Oil

The price of crude oil could soar to $200 a barrel in as little as six months, as supply continues to struggle to meet demand, a report has warned.

With benchmark US light crude passing the $122 mark for the first time on Tuesday, the warning comes from Goldman Sachs energy strategist Argun Murti.

Surging demand was increasingly likely to create a "super-spike" past $200 in six months to two years' time, he said.

Oil prices have now risen 25% in the last four months and by 400% from 2001.

Mr Murti correctly predicted three years ago - when oil was about $55 a barrel - that it would pass $100, which it reached for the first time in January of this year.

Soaring global demand for oil is being led by China's continuing economic boom and, to a lesser extent, by India's rapid economic expansion. (BBC)

Labels: Oil

Oil set a new record high of $122 a barrel on Tuesday, the latest spurt in an advance that has seen prices double over the past 12 months.

Supply disruptions in Nigeria, where a strike and attacks by militants has hit production, have helped boost a market that is nervous about any threats to supply.

Tensions with Iran ratcheted higher when the world's fourth-biggest oil producer refused to accept intrusive inspections of its nuclear programme that the West fears could be linked to weapons.

U.S. light crude for June delivery was up $1.79 at $121.76 a barrel, by 3:12 p.m. after earlier touching a record high of $122.

London Brent crude was up $2.29 at $120.28 a barrel, after an earlier record of $120.35. (Reuters)

Labels: Oil

Republican John McCain was forced to clarify his comments Friday suggesting the Iraq war involved U.S. reliance on foreign oil. He said he was talking about the first Gulf War and not the current conflict.

At issue was a comment he made at a town hall-style meeting Friday morning in Denver.

"My friends, I will have an energy policy that we will be talking about, which will eliminate our dependence on oil from the Middle East that will prevent us from having ever to send our young men and women into conflict again in the Middle East," McCain said.

The expected GOP nominee sought to clarify his comments later, after his campaign plane landed in Phoenix. He said he didn't mean the U.S. went to war in Iraq five years ago over oil.

"No, no, I was talking about that we had fought the Gulf War for several reasons," McCain told reporters. (AP)

Labels: Iraq, Oil, U.S.

Iraq's government is expected to reap a $70 billion windfall from soaring oil prices, about double the previous projections, the U.S. military's reconstruction watchdog reported Wednesday.

Although Iraq's oil production remains below its pre-war peak of 2.5 million barrels per day, the price per barrel has more than doubled since the U.S.-led invasion in 2003, said Stuart Bowen, the special inspector-general for Iraq reconstruction, in his quarterly report to Congress.

The issue has become a sore spot for some U.S. lawmakers as the war enters its sixth year, with both Republicans and Democrats raising complaints that U.S. taxpayers are footing the bill for reconstruction work in the now-flush nation.

Congress has approved about $47 billion in reconstruction funding since the invasion. About $30 million of that has been spent, the inspector-general's report found, and the country's U.S.-backed government was paying about half the cost of reconstruction projects by the end of 2007, the report states.

But further progress will depend on Iraq's ability to spend what it has budgeted and to keep a lid on a pervasive culture of corruption, which Bowen's office has described as a "second insurgency." Iraqi officials have said they plan to issue a supplemental budget to manage the additional money, according to Wednesday's report.

"This supplemental budget presents an extraordinary opportunity for Iraq to expand its infrastructure investment, but it also heightens concerns about corruption," the report states. (CNN)

Labels: Iraq, Oil, U.S.

CIBC World Markets analysts recently predicted that oil would sell for US$200 a barrel in 2012, as oil supplies grow ever tighter relative to demand. That would imply a continued global boom for the next four years, which would bring inflation, perhaps validating CIBC's prophesy as the dollar went the way of the 1923 Reichsmark.
All the same, that's not the way I'd bet; I think $50 is more likely. We are probably not quite at the end of this unprecedented oil and commodities bubble, but we are surely getting close.
To take the hyperinflationary possibility first. The St Louis Federal Reserve has since 1991 calculated a monetary statistic "money of zero maturity", which is M2 minus small time deposits plus institutional money market funds. In the absence of M3 statistics, discontinued by the Federal Reserve in March 2006, St Louis' MZM is a decent measure of broad money supply. MZM increased by a moderate 9.18% in 2007. However in the three months to April 14 2008, it has increased at an astounding annual rate of 30.3%, reflecting the massively expansionary monetary policy the Fed has followed since January. (Asia Times)

Labels: Oil

Opec, the oil producing cartel, has warned that the price of crude could keep rising to reach $200 a barrel.

Opec president Chakib Khelil blamed the falling value of the US dollar, which makes other assets, including oil, more attractive for foreign investors.

His comments came as oil prices hit a fresh high, just below $120 a barrel.

Prices were lifted by a strike at a UK refinery that disrupted North Sea production, and supply problems in Nigeria due to pipeline attacks.

BP shut down a key North Sea pipeline at the weekend after staff walked out of the Grangemouth refinery in Scotland in a two-day strike over pensions.

Providing a third of UK oil output, the closure of the Forties pipeline has raised fears about supply shortages. (BBC)

Labels: Oil, OPEC, U.K.

Oil struck a record high at $119.93 a barrel on Monday, extending the previous session's rally, as a strike closed a major British oil pipeline and as fresh violence in Nigeria reignited supply fears.

Simmering geopolitical tensions between the United States and Iran also helped boost oil prices.

U.S. light crude for June delivery rose 81 cents to $119.33 by 2249 GMT, after striking a lifetime high of $119.93 a barrel at the start of Globex electronic trade.

U.S. oil settled $2.46 higher at $118.52 a barrel on Friday.

London Brent crude rose 66 cents to $117.

"Supply side concerns underpinned the oil price," David Moore, a commodity strategist at the Commonwealth Bank of Australia, said in a note to clients. (Reuters)

Labels: Oil

An oil pipeline south of Baghdad has been blown up, wounding at least eight security guards, Iraqi police say.

The blast, near the town of Iskandiriya, caused a large fire and disrupted the flow of crude oil to refineries in the south of Iraq.

The pipeline carries fuel south from Baghdad's Doura oil refinery.

It was the second time in the past year the pipeline had been hit and the latest in a series of attacks on Iraqi oil refineries, blamed on insurgents.

Pumping from the refinery was stopped because of the explosion, and production was likely to be affected, according to an official speaking anonymously.

A police officer, also speaking on condition of anonymity, said "the bombing has caused a huge fire".

He added that at least 16 firefighting units had been sent to the area to deal with the explosion.

Iraq has the world's third-largest oil reserves, consisting of more than 115 billion barrels.

But oil pipelines have often been targeted around the country by insurgents or saboteurs. (BBC)

Labels: Iraq, Oil

Oil prices climbed towards this week's record peaks on Friday as traders fretted over threats to global energy supplies in Britain and Nigeria, analysts said.

New York's main oil futures contract, light sweet crude for delivery in June, rallied 1.68 dollars to 117.74 dollars a barrel.

London's Brent North Sea crude for June rose 1.57 dollars to 115.91 dollars.

This week, prices rocketed to historic highs as investors seized on mounting supply worries and the weak US currency, which makes dollar-priced crude cheaper for foreign buyers and tends to encourage demand.

New York crude jumped close to 120 dollars, hitting a record high 119.90 dollars on Tuesday, before dipping in line with the strengthening US currency.

Brent crude, meanwhile, set a high of 116.87 dollars on Thursday as fears grew over a looming strike at Grangemouth, one of Britain's biggest oil refineries. (AFP)

Labels: Oil

Record-breaking oil prices fell on Wednesday after spiking near 120 dollars per barrel, as international concern mounted over soaring energy costs and the world's top producer appealed for calm.

Traders were also on tenterhooks ahead of the weekly US energy inventories report, which has the potential to push prices beyond the psychological barrier of 120 dollars.

New York's main oil futures contract, light sweet crude for delivery in June, shed 33 cents to 117.74 dollars a barrel. The May contract had struck a record high 119.90 before expiring Tuesday.

London's Brent North Sea crude for June delivery lost 42 cents to 115.53 dollars on Wednesday, after hitting a lifetime peak of 116.75 on Tuesday.

Prices soared to historic heights on Tuesday as an attack on crude pipelines in Nigeria further tightened global energy supplies, which are under intense pressure with crude cartel OPEC refusing to raise short-term output.

Additional support came from the weak US currency, which makes dollar-priced oil cheaper for foreign buyers and stimulates demand. The euro surged past 1.60 dollars for the first time on Tuesday. (AFP)

Labels: Oil

Oil prices rocketed to historic highs above 118 dollars on Tuesday, lifted by the tumbling dollar, unrest in Nigeria and OPEC's reluctance to increase output.

New York's main oil futures contract, light sweet crude for delivery in May, jumped to an all-time high of 118.45 dollars.

At the same time, London's Brent North Sea crude for June hit a record 115.53 dollars a barrel.

"For the moment, there does not seem to be anything stopping the price juggernaut we are seeing in energy," said MF Global analyst Ed Meir.

In the foreign exchange market, the European single currency jumped to the historic 1.60 dollars level following further weak US economic data.

The weak US currency makes dollar-priced commodities like oil cheaper for foreign buyers and therefore tends to encourage demand.

"The (oil) market is still fairly tight, with OPEC reluctant to hike output, blaming speculators and the broad weakness in the dollar for driving prices higher," said Sucden analyst Andrey Kryuchenkov. (AFP)

Labels: Oil, OPEC

Italian oil and gas company Eni SpA (E) on Sunday continued its recent string of expanding ties with state-run oil companies, this time signing a deal to pursue multibillion dollar oil and natural gas projects with small Gulf state Qatar.

The deal comes weeks after Eni, one of Europe's biggest energy companies, signed new deals with the Venezuelan state-run oil company, Petroleos de Venezuela SA (PVZ.YY), and strengthened its relationship with Russian gas giant, OAO Gazprom (GAZP.RS).

Under the latest deal, Eni and state-run Qatar Petroleum will jointly pursue gas and oil exploration projects in Africa and the Mediterranean region. The agreement also entails cooperation on refining, petrochemical and power projects.

The agreement highlights the increased willingness of some Western oil and gas companies, largely shut out from drilling for hydrocarbons in the Middle East, to strike cooperation deals - often for less lucrative service contracts - with national oil companies in order to further their growth prospects. (CNN)

Labels: Italy, Oil, Qatar

OPEC president Chakib Khelil said on Sunday that the oil-producer cartel should not increase output now because the market was well-balanced.

"There is no need for OPEC to raise its production now ... Any increase in output will not affect oil prices because there is a balance between supply and demand," Khelil said in comments cited by the KUNA news agency.

Khelil, who is also Algerian Energy Minister, is in Kuwait as part of a delegation accompanying the Algerian president.

"We raised production last year and prices continued to rise ... If we raise output, we will not find buyers for the increase," he said.

On Friday, New York's main oil, light sweet crude for delivery in May, surged 1.83 dollars higher to a record close of 116.69 dollars a barrel. It had earlier hit an intraday all-time peak of 117 dollars.

Khelil however said that the 13-member OPEC has the ability to boost production by two million barrels per  (AFP)

Labels: Oil, OPEC

Belgium (AP) -- Iraqi Prime Minister Nouri al-Maliki gave notice to the European Union on Wednesday that his nation is open for business, despite its fighting with al-Qaida in Iraq and Shiite militias.

Al-Maliki said that in return for opening its vast oil and gas reserves to investors, Iraq wants EU know-how to rebuild its tattered institutions and industrial base.

During his talks with top EU officials, Iraq offered to forge closer economic and political ties by increasing its supply of natural gas to the European market over the next three years.

"We have come here to open the way - and pave the way - for a new relationship," al-Maliki said. "As you know, Iraq is a rich country. We are not asking for direct assistance to Iraq in order to fund our projects. What we need is technical assistance" to help rebuild.

Iraq's government has indicated that it is negotiating with U.S. and European oil companies to manage the development of new oil fields.(AP)

Labels: European Union, Iraq, Oil

The price of New York oil surged to a new record high 113.93 dollars a barrel on Tuesday, boosted by a weak US currency and tight energy supplies after OPEC held its demand forecast, traders said.

Later Tuesday, New York's main oil contract, light sweet crude for delivery in May, stood at 113.81 dollars a barrel, up 2.05 dollars from Monday's finish.

London's Brent North Sea crude for May struck its own record high of 112.08 dollars a barrel on Tuesday. The contract, which expires at the close, later stood at 111.70 dollars, up 1.86 dollars.

"The main reason for the rally is the dollar... but we also have some problems with supply," said CMC Markets trader Nas Nijjar.

"The market is really reacting to the fundamentals" of supply and demand.

He added: "People are talking about (lower US consumption), but there is still strong demand coming out of India and China." (AFP)

Labels: Oil

Iraq has named 35 foreign energy firms who are entitled to apply for contracts to develop the country's potentially lucrative oil and gas industries.

BP, Shell, ExxonMobil, Total, Petronas and China's CNOOC are among those firms seeking deals to extract and pump oil.

Oil sales account for nearly 85% of Iraq's total revenue, but its infrastructure has been damaged by years of sanctions, war and violence.

Daily oil output is now at a four-year high of about 2.3 million barrels.

Improved security in central Iraq has boosted production levels in recent months, although pipelines and oil refineries are still subject to regular attacks.

The US official charged with monitoring how funds are spent in the reconstruction effort in Iraq said in January that the country could reap an extra $15bn from oil sales if it received more investment and clamped down on corruption. (BBC)

Labels: Iraq, Oil

The International Energy Agency (IEA) has cut its forecast for oil demand in 2008 on expectations of a global economic slowdown.

The IEA has cut its 2008 forecast by 310,000 barrels per day to 87.2 million barrels per day.

The revision came after new projections on slower worldwide economic growth by the International Monetary Fund.

But demand for oil, which hit a record above $112 on Wednesday, is still expected to be 1.5% higher than 2007. (BBC)

Labels: Oil

Brent crude oil rallied to a new all-time high in midmorning trade after a surprise drop in US crude stockpiles yesterday fuelled fears supply will remain tight going forward.

'The data fuelled concerns of tight oil market conditions, pushing prices higher,' said David Moore, commodity strategist at the Commonwealth Bank of Australia.

At 11.20 a.m., Brent crude for May delivery was up $1.17 at $109.64 a barrel, having earlier touched a new record of $109.98 a barrel.

U.S. crude oil inventories fell by 3.2 million barrels in the week to April 4, the Dept of Energy said yesterday, against expectations for a rise of some 2.5 million barrels.

The department added that gasoline supplies fell by 3.4 million barrels, while distillates dropped by 3.7 million barrels, both declining by more than analysts had expected. (Forbes)

Labels: Oil

Oil prices have climbed towards $107 a barrel as the rally seen late last week continued.

US light, sweet crude rose 59 cents to $106.82 a barrel, having leapt $2.40 on Friday. London Brent crude, meanwhile, gained 33 cents to $105.22.

The rises were helped as producer group Opec reiterated that it saw no need to increase output.

Investors have also been looking to move out of the weak dollar and into commodities, pushing up the oil price.

"Oil supply to the market is enough and high oil prices are not due to a shortage of crude but rather it is because of the decrease in the dollar's value, shortage of refinery capacity and some political tensions in the world," Opec secretary general Abdullah al-Badri said. (BBC)

Labels: Oil, OPEC

While Gulf Arab oil producers reap windfall earnings, their poorer cousins elsewhere in the Arab world are struggling with soaring energy and food bills.

Inflation has surged in Gulf countries, fuelled partly by lavish spending of record oil and gas revenues. This is also spurring demand for everything from housing to power and water.

Gulf states with currencies pegged to the dollar have also been hit by the global weakness of the U.S. currency, which is driving inflation by making some imports more expensive.

But wrestling with rising prices is a grimmer business in Arab capitals not cushioned by oil wealth. From Cairo in Egypt to Sanaa in Yemen, mostly authoritarian governments have to weigh the fiscal costs of subsidizing fuel and food against the explosive political risks of social discontent.

"Nothing's inexpensive any more," griped Jihad al-Amin, who owns a dry-cleaning store in Damascus, Syria. "Even parsley, which has been dirt cheap for as long as I can remember, has tripled." (Reuters)

Labels: Oil

History may not repeat itself, but, as Mark Twain observed, it can sometimes rhyme. The crises and conflicts of the past recur, recognisably similar even when altered by new conditions. At present, a race for the world's resources is underway that resembles the Great Game that was played in the decades leading up to the First World War. Now, as then, the most coveted prize is oil and the risk is that as the contest heats up it will not always be peaceful. But this is no simple rerun of the late 19th and early 20th centuries. Today, there are powerful new players and it is not only oil that is at stake.

It was Rudyard Kipling who brought the idea of the Great Game into the public mind in Kim, his cloak-and-dagger novel of espionage and imperial geopolitics in the time of the Raj. Then, the main players were Britain and Russia and the object of the game was control of central Asia's oil. Now, Britain hardly matters and India and China, which were subjugated countries during the last round of the game, have emerged as key players. The struggle is no longer focused mainly on central Asian oil. It stretches from the Persian Gulf to Africa, Latin America, even the polar caps, and it is also a struggle for water and depleting supplies of vital minerals. Above all, global warming is increasing the scarcity of natural resources. The Great Game that is afoot today is more intractable and more dangerous than the last. (Guardian)

Labels: China, Oil, U.S.