Mangalore Refinery and Petrochemicals Ltd., a unit of India’s Oil and Natural Gas Corp., declared that it plans to invest INR18 billion to set up a 440,000-ton-per-annum polypropylene plant. For full story, click here
Crude oil fell on Tuesday, snapping four days of gains, on concern a U.S. government report will show stockpiles climbed from the highest level since September 1990. Crude oil for June delivery declined as much as 77 cents, or 1.4 per cent, to $53.70 a barrel in electronic trading on the New York Mercantile Exchange. Oil is up 21 per cent this year.
Libya’s top oil official declared that his country is keen to invest in oil-and-gas exploration off Cyprus’ southern coast. For full story, click here
Brazil plans to invest some $400 bn in coming 10 years to develop new offshore fields that may contain as much as 80 billion barrels of oil. For full story, click here
It is obvious that a barrel price below $60 on the NYMEX is bad news for oil companies. Part of the drop reflects a strengthening American dollar, but recent demand forecast revisions are bleak. Governments, companies and investors think a prolonged recession or period of low growth is in the offing, and everyone should take note.
Clearly Monday was not particularly good news for oil companies. With futures settling below $90 per barrel, ($87.81 when Benchmark went to proofing) the industry is seeing the lowest prices since February.
Another rough day for investors this Monday. As it became clear that the American House of Representatives would reject the authorization law for the executive’s $700 billion financial sector bailout plan, commodities began to tank. Oil futures shed more than $10 of their value during the day, dropping to $96.37 per barrel.
The expiration of October trading certainly played a disproportionate role in the record one-day gain, as it exercised a huge pressure on short positions. The meteoric rise also illuminates how much the vacillation is due to speculative activity.
Though ConocoPhillips (NYSE:COP) and Placid Refining Company are both receiving hundreds of thousands of barrels of crude from America’s federal reserves to continue refinery operations, and two rigs in the Gulf have been knocked adrift, the overall impact of Ike appears fairly benevolent to energy companies.
OPEC’s meeting tomorrow will almost certainly result in talk of cutting production, but not much in the way of concerted action. Member nations’ motivations are not synchronized, so consensus is exceedingly unlikely. Iran wants to impose OPEC-wide decreases, but the UAE thinks current levels are appropriate. Although OPEC will not move together on this issue, some countries (notably Saudi Arabia) are likely to retrench significant volumes.
Get our independent commentary on oil trends and companies delivered to your inbox.
