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Posts Tagged ‘oil prices’

Glencore lists, commodities’ mkts collapse

In Commodities on 06/05/2011 at 4:35 pm

As trading and mining house Glencore is listing, making some mgrs billionaires, commodity prices have fallen for a second day in early trading in Europe, led by another drop in crude oil.

This comes after markets were hit by one of the biggest sell-offs in two years on Thursday. Brent crude fell 4.3% to below $106 a barrel, adding to a 8.6% drop on Thursday, and bringing its cumulative fall over the past week to over 16%.

Industrial metals such as copper also saw further falls, as did some foodstuffs.

If this goes on, the view blogged here earlier that the Glencore IPO is a sign that commodities mkts have peaked for the time being, was a gd call.

High Oil Prices: India in trouble

In Energy, India, Uncategorized on 23/03/2011 at 9:15 am

On all four counts* … India scores badly. New Delhi has already seen street rallies protesting rising food prices. And if India needs higher subsidies, its weak and cash-strapped coalition government – dented anew by last week’s WikiLeaks claims – seems powerless to deliver them. The sovereign most exposed to an oil shock could be the least well prepared to deal with it.

*a country’s oil intensity (how much oil it takes to produce a unit of output), its energy trade balance, its current level of price inflation, and the government’s fiscal position. The first two give an indication of a country’s exposure to higher prices; the latter two suggest how much scope it has to absorb and defray them through fuel, electricity and food subsidies.

FT’s Lex

High Oil Prices: M’sia Boleh

In Energy, Malaysia on 22/03/2011 at 11:21 am

Consider four metrics: a country’s oil intensity (how much oil it takes to produce a unit of output), its energy trade balance, its current level of price inflation, and the government’s fiscal position. The first two give an indication of a country’s exposure to higher prices; the latter two suggest how much scope it has to absorb and defray them through fuel, electricity and food subsidies. By that reckoning, Malaysia may come out best. Its oil intensity is just the wrong side of the Asian average, on BP data. But as one of only two net exporters of oil and gas in Asia, its terms of trade should benefit. Aggressive monetary tightening, moreover, has so far helped to keep inflation tamed. The fiscal picture could be prettier: this chronic over-spender has run five budget surpluses in the past 40 years. But while subsidies remain a big burden – second only to Indonesia, as a percentage of gross domestic product – they are cushioned by oil revenues.

FT Lex

Oil at US$120: Buy M’sia

In Energy, Indonesia, Malaysia on 26/02/2011 at 5:45 am

As Asia’s largest net energy exporter, only Malaysia will benefit significantly from higher energy prices. With crude oil, natural gas and palm oil making up almost 30% of total exports, the country is experiencing a significant positive terms-of-trade shock, says Barclays Capital.

It says US$120 oil would add 3.1 percentage points to  Malaysia’s current account balance as a percentage of GDP, and 0.9 percentage points to Indonesia’s.

Oil: An alarmist call

In Energy on 24/02/2011 at 9:43 am

Japanese bank Nomura talks of a doubling in oil price to U$220a barrel if unrest in Libya continues.

Before you do anything stupid remember that Nomura called a buy on Indonesia and other regional markets last December. Waz that call worth?

A worrying combination

In Commodities, Emerging markets, Energy on 17/12/2010 at 5:35 am

A strong oil price and a strengthening US$.

Article

Oil: Did anyone notice?

In Energy on 06/12/2010 at 5:14 am

The price of oil on both sides of the Atlantic has hit its highest level since the financial crisis.

In Europe, Brent crude futures rose to $91.58 per barrel, while in the US, West Texas Intermediate hit $89.35 – the highest levels since October 2008.

Despite the market rally, prices still remain 40% below their pre-crisis peak.

Among the factors driving prices higher are rising demand because of the global economic recovery and cold weather in Europe, as well as the weak US dollar.

Meanwhile, temperatures are also expected to fall in the eastern United States, according to the US National Weather Service.

BBC Online story.

An oil bull still?

In China, Energy on 23/11/2010 at 12:14 pm

Hedge funds cut bullish bets on oil by the most in almost three months amid speculation fallout from the Irish debt crisis and China’s efforts to curb inflation will slow economic growth, sapping demand for fuel.

The funds and other large speculators reduced so-called long positions, or wagers on rising prices, by 15 percent in the seven days ended Nov. 16, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report, released Nov. 19. It was the first drop in four weeks and the largest decline since the seven days ended Aug. 24.

Bloomberg story

And remember that if China uses its energy resources as efficiently as the West and Japan

http://atans1.wordpress.com/2010/09/28/whither-the-price-of-oil/

Oil: Neither too hot nor too cold

In Economy, Indonesia, Temasek on 01/04/2010 at 7:22 am

Juz like Goldilock’s porridge.

Since August last year, oil prices have stabilised in the US$70 to US$83 range and according to this NYT articleEconomists and government officials say that if prices remain in that band, it could benefit the world economy, the future security of energy supplies and even the environment. The price is high enough to drive investment in future oil production and in supplies of alternative energy, they note, but low enough that consumers can bear it.

“It’s a sweet spot,” said Kenneth S. Rogoff, a Harvard professor of international finance. “It’s not too low that it’s crushing demand for renewable energy sources or causing debt and fiscal crises in oil-exporting countries. And it’s not so high that it’s driving African countries deeper into poverty and threatening the recovery in the U.S. and Europe.”

So for us value investors, the issue is avoiding being complacent because, For all the good that stable prices can do, however, no one is willing to predict they will last forever.

“Demand will change; supply will change,” said Christof Rühl, chief economist of BP, the oil company. “The world changes all the time.”

BTW looks like Temasek goofed in selling Orchard Energy

http://atans1.wordpress.com/2009/12/09/time-to-load-up-on-oil-connected-stocks/

But the buyer, RH Petrogas, is having difficulties completing the deal because the Indonesian authorities are insisting a transfer of an oil interest needs their approval.

Time to load up on oil-connected stocks? II

In Energy, Temasek on 09/12/2009 at 1:59 pm

A follow-up to comment on Temask selling its oil and gas E&P, Orchard, at the wrong time.  

“Oil prices have fallen for the fifth day in a row, weighed down by a stronger US dollar and amid concerns over demand.

‘US crude oil for January delivery fell $1.31 to settle at $72.62 a barrel.

‘In London, Brent crude fell $1.24, settling at $75.19.” – BBC Online report. $=US$

Remember as the price of oil falls, the more the financial pressure on smaller E&P outfits. The slowdown in bank lending doesn’t help their finances. They will be under pressure to sell stakes in their properties.

Time to load up on oil-connected stocks?

In Energy, Temasek on 09/12/2009 at 5:56 am

For those who believe that Temasek always gets things wrong (buying into and selling out of Barclays, Merrill Lynch/ BoA; buying into Shin, ABC Learning, Global Crossing), then Temasek’s sale of its oil and gas exploration and production company, Orchard, is a sign to load up on oil-related stocks.

It got its timing into E&P wrong, creating Orchard just as world oil prices started their climb towards a record US$147 in July last year. High oil prices  meant it was more expensive to buy into E&P assets then. But one would have thought that the fail in oil prices combined with the credit crisis should have meant opportunities for Orchard.  Smaller oil amd gas E&P companies needed funding.Apparently,  Orchard did nothing because it was sold to listed RH Petrogas for “peanuts”:  S$351,000-$371,000.

One can reasonably wonder if MM’s thoughts affected Orchard’s plans. MM Lee said (at about the same time as Orchard was created) GIC would not invest in mining ventures, because he didn’t understand mining. What is oil and gas E&P except a form of mining?

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