KLCC slide 1

KLCC slide 1

KLCC slide 2

KLCC slide 2

KLCC slide 3

KLCC slide 3

This is default featured slide 4 title

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam. blogger theme by BTemplates4u.com.

This is default featured slide 5 title

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam. blogger theme by BTemplates4u.com.

Oil prices recover slightly after steep drop

NEW YORK (AP) — Oil prices swung higher Tuesday, snapping a four-day plunge as investors temporarily halted their frantic selling to see whether the government's sweeping economic bailout can stem a widening global downturn.

Light, sweet crude for November delivery rose $2.25 to settle at $90.06 a barrel on the New York Mercantile Exchange, after earlier trading as high as $93.02.

Prices had lost nearly $13 in the past four trading sessions as a widening economic crisis spreads overseas and undercuts energy demand forecasts.

Despite Tuesday's modest advance, analysts said crude's fundamentals suggest prices are headed lower.

"We've just seen a huge shift in sentiment where the focus isn't on supply anymore. It's on demand, and that demand continues to weaken," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

At the pump, crude's general downward trend continued to weigh on retail gas prices. A gallon of regular fell 2.4 cents overnight to a new national average of $3.48, according to auto club AAA, the Oil Price Information Service and Wright Express. Prices peaked at $4.114 a gallon on July 17.

Crude's modest gains came as investors trickled back into the oil market a day after growing financial worries weighed down markets across the globe. Tensions eased some after the Federal Reserve announced an emergency plan to buy up massive amounts of companies' short-term debt in its latest effort to unclog jammed credit markets.

Still, the initiative, along with the government's $700 billion financial bailout plan approved last Friday, failed to soothe investors worried about a deepening economic malaise. The Dow Jones industrial average fell more than 500 points after advancing slightly earlier in the day. On Monday, the blue chip index fell below 10,000 for the first time in four years.

Meanwhile, oil market investors are looking for signs that the Organization of the Petroleum Exporting Countries may cut production if prices fall further. Iranian Oil Minister Gholam Hossien Nozari on Saturday called on fellow OPEC members not to pump too much oil in a bid to keep prices above $100.

However, OPEC may be reluctant to slash output since higher gasoline and heating costs would be a further drag on economic growth.

"I think it's very difficult for OPEC," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. "With the international economy looking weak, decisions to support oil prices have to be balanced against not making the situation worse."

A stronger dollar has also been pressuring oil prices lately. The greenback weakened slightly Tuesday, helping send prices higher. Investors tend to buy commodities like oil to defend against dollar weakness and a hedge against inflation, but sell crude as the U.S. currency strengthens.

The 15-nation euro bought $1.3595 in trading Tuesday, up from the $1.3457 late Monday in New York but still at lows not seen this year.

In other Nymex trading, heating oil rose 3.17 cents to settle at $2.5057 a gallon, while gasoline futures rose less than half a penny to settle at $2.0628. Natural gas for November delivery fell 6.7 cents to settle at $6.768 per 1,000 cubic feet.

In London, November Brent crude rose 98 cents to settle at $84.66 per barrel on the ICE Futures exchange.

Associated Press Writers George Jahn in Vienna, Austria and Alex Kennedy contributed to this report from Singapore.

Petronas posts record profit of $18.1 bil., interested in Iran gas+

AP
Posted: 2008-07-15 05:26:26
KUALA LUMPUR, July 15 (Kyodo) - Malaysia's state-owned oil company Petroliam Nasional Bhd. announced Tuesday a 40.3 percent increase in net profit to a record $18.1 billion for the financial year ended March 31, on the back of higher sales and higher oil prices.

Petronas, Malaysia's biggest and most globalized company, also said it is still interested in Iran's Pars liquefied natural gas project although its partner, Total SA of France, has canceled its investment over increasing political tension.

"We continue to be interested in operating in Iran. Yes, we know the situation there. I have read the announcement by Total, but as Petronas, we continue to be interested in Iran, " Petronas CEO Hassan Marican told a press conference.

Total, which has a 40 percent stake in the Iran's South Pars project, announced last week it would not spend any more money in the project due to political risk as Iran comes under increasing pressure from the United States to halt its nuclear energy program.

Petronas, which holds a 10 percent share, said it would reassess the project's cost structure.

The remainder of the consortium is held by National Iranian Gas Export Co.

"But on the LNG project specifically, where we are in a consortium with Total, I have said previously that we cannot come to a final decision on that particular project because of the increase in cost and because we have not completed our discussion with the Iranians," Hassan said.

Whether Petronas will go it alone on the project, he said: "We are capable and able to undertake the LNG projects but there are other factors. So we have to make an assessment."

The South Pars field holds around 14 trillion cubic meters of gas, about 8 percent of world reserves.

Petronas's aggressive expansion overseas has paid off handsomely for the company.

The group, which also controls several listed units such as shipping firm Malaysia International Shipping Corp. Bhd., retail gasoline station operator Petronas Dagangan Bhd. and gas distributor Petronas Gas Bhd., saw revenue rose 29.8 percent from the previous year to $66.2 billion.

But for the first time, the biggest contributor to revenue came from the group's international operations, which generated 40.3 percent of total revenue.

The high oil prices brought windfalls to Petronas and also to the Malaysian government, with Petronas now the single largest contributor to government revenues.

For the 2007 financial year it paid a total of 67.6 billion ringgit ($21 billion) in taxes, dividends, royalties and export duties, up from 52.3 billion ringgit the previous year.

Out of the 67.6 billion ringgit, 62.8 billion ringgit went to the federal government and made up 44 percent of government's total revenue.

The rest went to the state governments.

But despite the company's payments to the government, its huge profits became a political issue after the government decided to raise retail gasoline prices by nearly 41 percent and diesel prices by 63 percent.

Led by the opposition, there have been calls for the government to use Petronas's profits to subsidize fuel prices but Hassan said it would be dangerous for the government to do so.

"Given the volatile nature of the industry, given the fact that we are investing into new development of reserves at high cost, should there be a major downturn in the oil price, then the ability to maintain the high results would be a real challenge and would then have a major impact on government revenue," he warned.

He added that the 67.6 billion ringgit total payment to governments for the year represented 63.1 percent of the group's total profits even as operating costs are rising.

For example, he said, daily charter rates for drilling rigs have recently gone up almost 300 percent and the average price of steel has risen 225 percent.

Oil prices hold above $122 a barrel

By THOMAS HOGUE – 6 hours ago

BANGKOK, Thailand (AP) — Oil held above $122 a barrel Thursday in Asia after dropping more than $2 overnight on worries about declining demand in the U.S. and abroad.

In its weekly inventory report, the U.S. Energy Department's Energy Information Administration said American demand for gasoline dipped 1.4 percent over the last four weeks. Meanwhile, gasoline inventories rose by 2.9 million barrels last week, more than three times the increase analysts polled by energy research firm Platts had expected.

Concerns about demand have helped pull oil down nearly 10 percent from its May 22 high of $135.09. Those concerns were exacerbated Wednesday by the EIA report and by moves by India and Malaysia to cut fuel subsidies, effectively raising their retail prices for everything from gasoline to cooking gas. Many investors believe subsidy cuts will choke off demand for fuel in the developing world.

"There's definitively smaller demand, (and) you have subsidies that are going to fall in energy consuming nations," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com. "The psychology is just changing."

India announced increases that, for example, would boost gasoline prices in New Delhi by 11 percent. Malaysia said it would hike gasoline prices by 41 percent and electricity for commercial and industrial users by 26 percent.

Indonesia and Taiwan, among others, have taken similar steps in recent weeks.

Midafternoon in Singapore, light, sweet crude for July delivery was up 44 cents at $122.74 barrel in electronic trade on the New York Mercantile Exchange. The contract fell $2.01 in the floor session to settle at $122.30 a barrel.

That was oil's lowest settlement since May 6.

The EIA also said inventories of distillates, which include diesel and heating oil, rose by 2.3 million barrels. Investors shrugged off an unexpected decrease in crude oil inventories.

Many analysts have long questioned whether high oil prices could be sustained; many blame speculative investing fueled by the falling dollar for a near doubling of crude prices over the past year.

A weakening dollar can spur investors to buy oil and other commodities as a hedge against inflation, but the effect tends to reverse when the dollar strengthens. A stronger dollar also makes oil more expensive to buyers dealing in other currencies.

Recently, with some fluctuations, the dollar has been gaining against the euro and yen as U.S. economic data supports the view that the Federal Reserve isn't likely to cut its key interest rate further. In Asian currency trade later afternoon in Tokyo, the dollar was above 106 yen, while the euro was changing hands around $1.54.

Among other main factors cited for sustained high prices over the past year is the unexpected declines in production from some of the world's key exporters, particularly Russia, Venezuela and Mexico.

In other Nymex trading in Asian hours, heating oil futures rose 1.53 cents to $3.5611 a gallon while gasoline prices dropped 0.61 cent to $3.189 a gallon. Natural gas futures rose 1.2 cents to $12.391 per 1,000 cubic feet.

The July natural gas futures rose 15.8 cents to settle at $12.379 on Wednesday, again boosted by forecasts for hot temperatures in parts of the U.S. this weekend. That would boost demand from utilities for electricity generation to cool homes and businesses.

In London, July Brent crude futures rose 52 cents to $122.62 a barrel on the ICE Futures exchange.

AP Business Writer John Wilen in New York contributed to this report.

Oil crosses $129 for first time, heads for $130

By ADAM SCHRECK, AP Business Writer 36 minutes ago

NEW YORK - Oil prices spiked to a new trading high Tuesday, sweeping toward $130 a barrel as supply concerns intensified the momentum buying that has lifted crude deeper into record territory.

The June contract for light, sweet crude traded as high as $129.58 on the New York Mercantile Exchange before settling back to $129.12, up $2.07. The imminent expiration of the June contract created additional volatility in the market, and raised the very real possibility that crude could hit $130 before the end of the day, when the contract was ending.

Oil's trek toward $130 coincided with the Labor Department's report of an unexpectedly sharp rise in wholesale inflation last month. The combination raised fears that inflation will slice into Americans' discretionary spending, and that sent stocks falling sharply on Wall Street.

Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill., said prices were being supported by strong demand for diesel fuel in Asia, and a weakening of the U.S. dollar against the euro, which makes oil cheaper for some investors overseas.

"We're getting a combination of two price drivers this morning," he said.

Oil prices are now about twice as high as the were just a year ago. Prices have been propelled by a number of factors, including supply concerns, soaring global demand and a sliding dollar.

This latest surge comes after OPEC's president was quoted as saying his organization won't increase its output before its next meeting in September, adding to lingering worries about global supply.

The contract reached a new closing high of $127.05 Monday after Algerian Energy Minister Chakib Khelil, the current president of the Organization of Petroleum Exporting Countries, was quoted by a government newspaper as saying OPEC won't increase its output during the U.S. summer driving season, which begins this weekend. OPEC's next meeting is scheduled for Sept. 9.

Through Monday's close, the front-month contract has hit nine trading or closing records in 11 sessions. Analysts have said speculative buying has also contributed to oil's record high run.

In other news lifting prices, independent refiner Holly Corp. said a key unit at its New Mexico refinery was shut down for repairs, cutting estimated May gasoline production by as much as 756,000 gallons per day. The shutdown occurred while the fluid catalytic cracking unit was being brought back online from a previous shutdown May 7.

The refinery in Artesia, New Mexico, is Holly's largest.

As oil prices reach new heights, so have gasoline and diesel costs.

"Average gasoline prices in the U.S. rose for an eighth straight week and for the 15th time this year, up 1.8 percent or 6.9 cents to a record $3.791 a gallon," noted Stephen Schork in his Schork Report. "Gasoline at the pump is averaging 28.5 percent above last year's pace."

Drivers in some parts of the U.S. are paying considerably more, however. Gas pump prices in parts of California have been stuck above $4 a gallon for weeks now.

In other Nymex trading, heating oil futures rose 9.58 cents to $3.7709 a gallon while gasoline prices rose 5.92 cents to $3.2958 a gallon. Natural gas futures rose 29.1 cents to $11.245 per 1,000 cubic feet.

In London, Brent crude for July delivery added $2.46 to $127.52 on the ICE Futures Exchange.

___

Associated Press Writers Thomas Hogue in Bangkok, Thailand and George Jahn in Vienna, Austria contributed to this report.

Don't hope for gas prices to drop, says oil economist


By Ángel González
Seattle Times business reporter

John Felmey, of the American Petroleum Institute(pic)

Most drivers think $4 per gallon of gasoline is too much to pay in a weakening economy. Sales for sport-utility vehicles are plummeting. And people are actually driving less.

But don't expect prices to fall anytime soon despite slackening domestic demand, American Petroleum Institute chief economist John Felmy said Wednesday. The API, based in Washington, D.C., represents the U.S. oil and gas industry.

Gasoline prices are driven by the high cost of crude oil, which surpassed $125 a barrel on Wednesday. That's in large part because the slowdown in U.S. oil demand is being offset by growing consumption in China, India and the Middle East, said Felmy, who came here for a speech to the Seattle Economics Council.

"You have 2 billion people who want cars," he said.continue.....

Oil prices spike to record above $117 a barrel

By THOMAS HOGUE

BANGKOK, Thailand (AP) — Oil prices spiked to a record above $117 a barrel Monday in Asia following an attack on a key pipeline in Nigeria at the end of last week.

Comments over the weekend by an OPEC official that the group isn't likely to increase production also supported prices.

Abdullah el al-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said Sunday that oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply — something he doubted.

"Oil prices, there is a common understanding that has nothing to do with supply and demand," al-Badri said on the sidelines of an energy conference in Rome.

Light, sweet crude for May delivery rose as high as $117.05 a barrel in Asian electronic trading on the New York Mercantile Exchange early Monday. At midday in Singapore, the contract was trading at $116.73 a barrel, up 4 cents from the end of last week.

On Friday, May crude surged $1.83 to $116.69 a barrel following the attack on the Royal Dutch Shell PLC pipeline by the Movement for the Emancipation of the Niger Delta — the main militant group in Nigeria's restive south.

The group also promised further attacks on the petroleum industry in Africa's largest producer of crude oil.

Last Friday, Shell confirmed a pipeline leak that it said appeared to have been caused by explosives. It said it had isolated the line for repairs and that a small quantity of production had been shut.

Attacks since early 2006 on Nigerian oil infrastructure by the militant group have cut nearly one-quarter of the country's normal petroleum output, boosting oil prices. Nigeria is a major supplier of oil to the U.S.

A host of other supply and demand concerns in the U.S. and abroad, along with the dollar's weakness, have served to support prices, even as record retail gasoline prices in the United States appear to be dampening demand. Crude prices rose nearly 6 percent last week.

Analysts believe the weaker dollar is the primary reason oil has soared well past $100 a barrel this year. A sinking dollar draws investors to hard commodities such as oil and gold as hedges against inflation. Also, a weak dollar makes the commodities less expensive for buyers operating in other currencies.

OPEC Secretary-General al-Badri said Sunday that the group "will not hesitate" to increase production if it thought the higher prices were due to shortages. But he said more oil will not solve the high prices.

Also over the weekend, Iran's hard-line President Mahmoud Ahmadinejad was quoted Saturday as saying crude oil prices at $115 a barrel are too low, and that oil must "discover its real value."

"The oil price of $115 a barrel in today's global markets is a deceiving figure. Oil is a strategic commodity that needs to discover its real value," the Web site of Iran's state-run television quoted Ahmadinejad as saying.

The Iranian president made the remarks during a visit to an oil and gas exhibition in Tehran late Friday.

In other Nymex trading, heating oil futures were flat at $3.2923 a gallon while gasoline prices fell 0.18 cent to $2.9875 a gallon. Natural gas futures rose 1.3 cent to $10.60 per 1,000 cubic feet.

Brent crude futures for June rose 3 cents to $113.95 a barrel on the ICE Futures exchange in London.

Oil Falls a Second Day on Signs Prices Will Curb U.S. Demand

By Christian Schmollinger

April 11 (Bloomberg) -- Crude oil fell for a second day in New York on signs that high prices and a slowing economy will curb U.S. fuel consumption.

The four-week average of implied U.S. fuel demand was less than last year for the 10th straight week, the Energy Department reported on April 9. Gasoline use may drop this summer for the first time in 17 years, the agency said. Crude reached a record $112.21 a barrel on April 9.

``You look at the supply and demand fundamentals in the transportation fuel market, demand has been weak,'' said Victor Shum, senior principal at Purvin & Gertz Inc. in Singapore. ``The fundamentals don't support the rally in oil pricing so some caution has returned to the market.''

Crude oil for May delivery fell as much as 62 cents, or 0.6 percent, to $109.49 a barrel in after-hours trading on the New York Mercantile Exchange. It was at $109.92 at 2:59 p.m. Singapore time. Yesterday, futures fell 76 cents, or 0.7 percent, to settle at $110.11 a barrel. Prices are up 77 percent from a year ago.

Crude oil in New York rose to a record $112.21 a barrel on April 9 after an unexpected decline in U.S. oil inventories.

``The demand situation is deteriorating all the time,'' said Rowan Menzies, head of research at Commodity Warrants Australia Ltd. in Sydney. ``There is a disconnect between the price of oil right now and what the data is telling us in terms of demand slowing down.''

Weak Dollar

Brent crude for May settlement was at $108.29 a barrel, up 9 cents, on London's ICE Futures Europe exchange at 3 p.m. Singapore time. The contract yesterday declined 0.3 percent to settle at $108.20, after reaching a record $109.98.

Oil prices also fell as the euro declined from a record against the dollar. The dollar's drop has encouraged investors to buy commodities and made oil cheaper for buyers in other currencies.

Federal Reserve officials anticipated the U.S. economy will shrink in the first half of the year and expressed some concern about ``a prolonged and severe economic downturn'' as they cut interest rates last month, according to minutes of the March 18 Federal Open Market Committee meeting, released April 8.

U.S. implied fuel demand averaged 20.5 million barrels a day in the past four weeks, down 0.4 percent from a year earlier, the Energy Department said.

``Everyone seems to be blithely ignoring the fundamentals of supply and demand at the moment,'' said Commodity Warrants' Menzies. The economic situation in the U.S. ``should be having an impact on people's perceptions of what demand will do in the next three months.''

Crude oil may fall next week as imports increase and U.S. refiners operate at below-average rates, bolstering inventories.

Fifteen of 28 analysts surveyed by Bloomberg News, or 54 percent, said prices will drop through April 18. Eleven of the respondents, or 39 percent, said futures will rise and two forecast that prices will be little changed. Last week, 47 percent said oil would decline.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net.

Oil Prices Fall on Supply Report

By PABLO GORONDI

Oil prices fell further Thursday after dropping by more than a dollar in the previous session on larger-than-expected increases in U.S. crude and gasoline supplies.

Prices were still not far from Tuesday's record close of $100.88 a barrel as the U.S. dollar traded at fresh lows against the euro. Worries about the American economy is driving more money into energy futures as a hedge against inflation.

The report by the U.S. Energy Department's Energy Information Administration showed that country's crude oil inventories rose by 3.2 million barrels, or 1 percent, to 308.5 million barrels.

Although that number is slightly lower than levels a year ago, it is well ahead of the 2.4 million barrel gain analysts had been expecting, according to a survey by Dow Jones Newswires. It was the seventh straight week the report showed a rise in crude inventories, suggesting the U.S. at least has more than enough oil to meet demand.

Light, sweet crude for April delivery lost 39 cents to $99.25 a barrel in electronic trading on the New York Mercantile Exchange, midday in Europe.

The contract fell $1.24 to settle at $99.64 a barrel Wednesday after surging as high as $102.08 a barrel, a trading record. On Tuesday, the contract jumped $1.65 to settle at a record $100.88 a barrel.

In London, Brent crude fell 7 cents to $98.20 a barrel on the ICE Futures exchange.

The EIA data showed gasoline inventories also jumped more than expected — by 2.3 million barrels to 232.6 million barrels; analysts had expected a more modest rise of 400,000 barrels. Refinery activity also increased much more than expected.

The weakening U.S. dollar also helped prop up prices. The 15-nation euro jumped to a record $1.51 against the greenback, meaning that crude remains a relative bargain for buyers overseas. Gold — another commodity seen as a hedge against inflation — also struck a record Wednesday.

In his testimony to the U.S. Congress Wednesday, Federal Reserve Chairman Ben Bernanke warned of sluggish business growth ahead, and signaled a willingness by the central bank to cut interest rates again. But Bernanke also noted that the Fed must keep a close watch on inflation given the sharp rise in energy prices and other costs.

Heating oil futures lost 1.16 cents to $2.7595 a gallon (3.8 liters) while gasoline futures dropped 1.32 cents to $2.4645 a gallon.

Natural gas futures rose 4.5 cents to $9.105 per 1,000 cubic feet.

Associated Press writer Gillian Wong in Singapore contributed to this report.

Oil prices fall back from $100 barrel

updated 3:29 p.m. ET Jan. 4, 2008(A.P)

NEW YORK - Oil futures retreated further from their record levels above $100 a barrel Friday after the government reported lower-than-expected job growth in December, adding to fears of a recession that could crimp demand for oil. Gas prices, meanwhile, rose 2.2 cents a gallon overnight, following crude’s recent rally.

The Labor Department said employers created just 18,000 jobs last month, far less than the 70,000 analysts expected and the smallest increase since August 2003. The government also said the unemployment rate jumped to 5 percent in December from 4.7 percent in November, more than the 4.8 percent analysts expected and the highest level since November 2005.

While energy traders could have interpreted that data positively — in the past energy investors have seen reasons to buy in any economic news likely to prompt the Federal Reserve to cut interest rates — traders are becoming more concerned that record high energy prices are helping to push the economy into recession.

Light, sweet crude for February delivery fell $1.27 to settle at $97.91 a barrel on the New York Mercantile Exchange Friday.

Gas prices, meanwhile, jumped overnight to a national average of $3.074 a gallon, according to AAA and the Oil Price Information Service. Gas prices have risen in recent weeks, following oil’s rise into record territory. Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service, said gas prices are likely to add another 5 cents over the next week or so, but will likely then slide as demand ebbs in January and February.

Indeed, the Energy Information Administration on Thursday reported that gasoline demand rose a tepid 0.1 percent over the last four weeks.

“It’s just a terrible time of the year for demand,” Kloza said.

But in the spring, when demand picks up and refiners start cranking out gasoline to meet expected strong summer driving demand, gas prices will likely rebound and could set new records. The EIA predicts gas prices will peak over $3.40 a gallon this spring, well above the record price of $3.227 set last May.

Of course, while demand is a factor in the cost of gasoline, much of the price Americans pay at the pump is based on the price of crude oil. In recent months, oil prices have often moved higher after the government reported dismal economic data because traders believe signs of economic weakness raise the chances that the Fed will cut interest rates. Lower interest rates also weaken the dollar, whose decline has contributed to more expensive oil.

“Oil is in a Federal Reserve induced oil bubble,” said Phil Flynn, an analyst at Alaron Trading Corp., of Chicago, in a research note. “The Fed’s response to the housing crisis been essentially to aggressively cut rates but that has come at the expense of the dollar and has fed directly in to commodity price inflation.”

But traders will only stick with that investment strategy for so long. A recession is seen as much more important to long-term energy prices than the easy money that is a byproduct of lower interest rates, Kloza said. Reflecting this, oil prices reacted little Friday afternoon to the Federal Reserve’s plans to increase the amount of money available to banks under the auction process it created to try to ease the credit shortage.

Other energy futures also fell Friday. February heating oil futures fell 3.56 cents to settle at $2.6835 a gallon on the Nymex while February gasoline futures dropped 3.04 cents to settle at $2.511 a gallon.

Oil prices recover slightly after steep drop

NEW YORK (AP) — Oil prices swung higher Tuesday, snapping a four-day plunge as investors temporarily halted their frantic selling to see whether the government's sweeping economic bailout can stem a widening global downturn.

Light, sweet crude for November delivery rose $2.25 to settle at $90.06 a barrel on the New York Mercantile Exchange, after earlier trading as high as $93.02.

Prices had lost nearly $13 in the past four trading sessions as a widening economic crisis spreads overseas and undercuts energy demand forecasts.

Despite Tuesday's modest advance, analysts said crude's fundamentals suggest prices are headed lower.

"We've just seen a huge shift in sentiment where the focus isn't on supply anymore. It's on demand, and that demand continues to weaken," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

At the pump, crude's general downward trend continued to weigh on retail gas prices. A gallon of regular fell 2.4 cents overnight to a new national average of $3.48, according to auto club AAA, the Oil Price Information Service and Wright Express. Prices peaked at $4.114 a gallon on July 17.

Crude's modest gains came as investors trickled back into the oil market a day after growing financial worries weighed down markets across the globe. Tensions eased some after the Federal Reserve announced an emergency plan to buy up massive amounts of companies' short-term debt in its latest effort to unclog jammed credit markets.

Still, the initiative, along with the government's $700 billion financial bailout plan approved last Friday, failed to soothe investors worried about a deepening economic malaise. The Dow Jones industrial average fell more than 500 points after advancing slightly earlier in the day. On Monday, the blue chip index fell below 10,000 for the first time in four years.

Meanwhile, oil market investors are looking for signs that the Organization of the Petroleum Exporting Countries may cut production if prices fall further. Iranian Oil Minister Gholam Hossien Nozari on Saturday called on fellow OPEC members not to pump too much oil in a bid to keep prices above $100.

However, OPEC may be reluctant to slash output since higher gasoline and heating costs would be a further drag on economic growth.

"I think it's very difficult for OPEC," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. "With the international economy looking weak, decisions to support oil prices have to be balanced against not making the situation worse."

A stronger dollar has also been pressuring oil prices lately. The greenback weakened slightly Tuesday, helping send prices higher. Investors tend to buy commodities like oil to defend against dollar weakness and a hedge against inflation, but sell crude as the U.S. currency strengthens.

The 15-nation euro bought $1.3595 in trading Tuesday, up from the $1.3457 late Monday in New York but still at lows not seen this year.

In other Nymex trading, heating oil rose 3.17 cents to settle at $2.5057 a gallon, while gasoline futures rose less than half a penny to settle at $2.0628. Natural gas for November delivery fell 6.7 cents to settle at $6.768 per 1,000 cubic feet.

In London, November Brent crude rose 98 cents to settle at $84.66 per barrel on the ICE Futures exchange.

Associated Press Writers George Jahn in Vienna, Austria and Alex Kennedy contributed to this report from Singapore.

Petronas posts record profit of $18.1 bil., interested in Iran gas+

AP
Posted: 2008-07-15 05:26:26
KUALA LUMPUR, July 15 (Kyodo) - Malaysia's state-owned oil company Petroliam Nasional Bhd. announced Tuesday a 40.3 percent increase in net profit to a record $18.1 billion for the financial year ended March 31, on the back of higher sales and higher oil prices.

Petronas, Malaysia's biggest and most globalized company, also said it is still interested in Iran's Pars liquefied natural gas project although its partner, Total SA of France, has canceled its investment over increasing political tension.

"We continue to be interested in operating in Iran. Yes, we know the situation there. I have read the announcement by Total, but as Petronas, we continue to be interested in Iran, " Petronas CEO Hassan Marican told a press conference.

Total, which has a 40 percent stake in the Iran's South Pars project, announced last week it would not spend any more money in the project due to political risk as Iran comes under increasing pressure from the United States to halt its nuclear energy program.

Petronas, which holds a 10 percent share, said it would reassess the project's cost structure.

The remainder of the consortium is held by National Iranian Gas Export Co.

"But on the LNG project specifically, where we are in a consortium with Total, I have said previously that we cannot come to a final decision on that particular project because of the increase in cost and because we have not completed our discussion with the Iranians," Hassan said.

Whether Petronas will go it alone on the project, he said: "We are capable and able to undertake the LNG projects but there are other factors. So we have to make an assessment."

The South Pars field holds around 14 trillion cubic meters of gas, about 8 percent of world reserves.

Petronas's aggressive expansion overseas has paid off handsomely for the company.

The group, which also controls several listed units such as shipping firm Malaysia International Shipping Corp. Bhd., retail gasoline station operator Petronas Dagangan Bhd. and gas distributor Petronas Gas Bhd., saw revenue rose 29.8 percent from the previous year to $66.2 billion.

But for the first time, the biggest contributor to revenue came from the group's international operations, which generated 40.3 percent of total revenue.

The high oil prices brought windfalls to Petronas and also to the Malaysian government, with Petronas now the single largest contributor to government revenues.

For the 2007 financial year it paid a total of 67.6 billion ringgit ($21 billion) in taxes, dividends, royalties and export duties, up from 52.3 billion ringgit the previous year.

Out of the 67.6 billion ringgit, 62.8 billion ringgit went to the federal government and made up 44 percent of government's total revenue.

The rest went to the state governments.

But despite the company's payments to the government, its huge profits became a political issue after the government decided to raise retail gasoline prices by nearly 41 percent and diesel prices by 63 percent.

Led by the opposition, there have been calls for the government to use Petronas's profits to subsidize fuel prices but Hassan said it would be dangerous for the government to do so.

"Given the volatile nature of the industry, given the fact that we are investing into new development of reserves at high cost, should there be a major downturn in the oil price, then the ability to maintain the high results would be a real challenge and would then have a major impact on government revenue," he warned.

He added that the 67.6 billion ringgit total payment to governments for the year represented 63.1 percent of the group's total profits even as operating costs are rising.

For example, he said, daily charter rates for drilling rigs have recently gone up almost 300 percent and the average price of steel has risen 225 percent.

Oil prices hold above $122 a barrel

By THOMAS HOGUE – 6 hours ago

BANGKOK, Thailand (AP) — Oil held above $122 a barrel Thursday in Asia after dropping more than $2 overnight on worries about declining demand in the U.S. and abroad.

In its weekly inventory report, the U.S. Energy Department's Energy Information Administration said American demand for gasoline dipped 1.4 percent over the last four weeks. Meanwhile, gasoline inventories rose by 2.9 million barrels last week, more than three times the increase analysts polled by energy research firm Platts had expected.

Concerns about demand have helped pull oil down nearly 10 percent from its May 22 high of $135.09. Those concerns were exacerbated Wednesday by the EIA report and by moves by India and Malaysia to cut fuel subsidies, effectively raising their retail prices for everything from gasoline to cooking gas. Many investors believe subsidy cuts will choke off demand for fuel in the developing world.

"There's definitively smaller demand, (and) you have subsidies that are going to fall in energy consuming nations," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com. "The psychology is just changing."

India announced increases that, for example, would boost gasoline prices in New Delhi by 11 percent. Malaysia said it would hike gasoline prices by 41 percent and electricity for commercial and industrial users by 26 percent.

Indonesia and Taiwan, among others, have taken similar steps in recent weeks.

Midafternoon in Singapore, light, sweet crude for July delivery was up 44 cents at $122.74 barrel in electronic trade on the New York Mercantile Exchange. The contract fell $2.01 in the floor session to settle at $122.30 a barrel.

That was oil's lowest settlement since May 6.

The EIA also said inventories of distillates, which include diesel and heating oil, rose by 2.3 million barrels. Investors shrugged off an unexpected decrease in crude oil inventories.

Many analysts have long questioned whether high oil prices could be sustained; many blame speculative investing fueled by the falling dollar for a near doubling of crude prices over the past year.

A weakening dollar can spur investors to buy oil and other commodities as a hedge against inflation, but the effect tends to reverse when the dollar strengthens. A stronger dollar also makes oil more expensive to buyers dealing in other currencies.

Recently, with some fluctuations, the dollar has been gaining against the euro and yen as U.S. economic data supports the view that the Federal Reserve isn't likely to cut its key interest rate further. In Asian currency trade later afternoon in Tokyo, the dollar was above 106 yen, while the euro was changing hands around $1.54.

Among other main factors cited for sustained high prices over the past year is the unexpected declines in production from some of the world's key exporters, particularly Russia, Venezuela and Mexico.

In other Nymex trading in Asian hours, heating oil futures rose 1.53 cents to $3.5611 a gallon while gasoline prices dropped 0.61 cent to $3.189 a gallon. Natural gas futures rose 1.2 cents to $12.391 per 1,000 cubic feet.

The July natural gas futures rose 15.8 cents to settle at $12.379 on Wednesday, again boosted by forecasts for hot temperatures in parts of the U.S. this weekend. That would boost demand from utilities for electricity generation to cool homes and businesses.

In London, July Brent crude futures rose 52 cents to $122.62 a barrel on the ICE Futures exchange.

AP Business Writer John Wilen in New York contributed to this report.

Oil crosses $129 for first time, heads for $130

By ADAM SCHRECK, AP Business Writer 36 minutes ago

NEW YORK - Oil prices spiked to a new trading high Tuesday, sweeping toward $130 a barrel as supply concerns intensified the momentum buying that has lifted crude deeper into record territory.

The June contract for light, sweet crude traded as high as $129.58 on the New York Mercantile Exchange before settling back to $129.12, up $2.07. The imminent expiration of the June contract created additional volatility in the market, and raised the very real possibility that crude could hit $130 before the end of the day, when the contract was ending.

Oil's trek toward $130 coincided with the Labor Department's report of an unexpectedly sharp rise in wholesale inflation last month. The combination raised fears that inflation will slice into Americans' discretionary spending, and that sent stocks falling sharply on Wall Street.

Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill., said prices were being supported by strong demand for diesel fuel in Asia, and a weakening of the U.S. dollar against the euro, which makes oil cheaper for some investors overseas.

"We're getting a combination of two price drivers this morning," he said.

Oil prices are now about twice as high as the were just a year ago. Prices have been propelled by a number of factors, including supply concerns, soaring global demand and a sliding dollar.

This latest surge comes after OPEC's president was quoted as saying his organization won't increase its output before its next meeting in September, adding to lingering worries about global supply.

The contract reached a new closing high of $127.05 Monday after Algerian Energy Minister Chakib Khelil, the current president of the Organization of Petroleum Exporting Countries, was quoted by a government newspaper as saying OPEC won't increase its output during the U.S. summer driving season, which begins this weekend. OPEC's next meeting is scheduled for Sept. 9.

Through Monday's close, the front-month contract has hit nine trading or closing records in 11 sessions. Analysts have said speculative buying has also contributed to oil's record high run.

In other news lifting prices, independent refiner Holly Corp. said a key unit at its New Mexico refinery was shut down for repairs, cutting estimated May gasoline production by as much as 756,000 gallons per day. The shutdown occurred while the fluid catalytic cracking unit was being brought back online from a previous shutdown May 7.

The refinery in Artesia, New Mexico, is Holly's largest.

As oil prices reach new heights, so have gasoline and diesel costs.

"Average gasoline prices in the U.S. rose for an eighth straight week and for the 15th time this year, up 1.8 percent or 6.9 cents to a record $3.791 a gallon," noted Stephen Schork in his Schork Report. "Gasoline at the pump is averaging 28.5 percent above last year's pace."

Drivers in some parts of the U.S. are paying considerably more, however. Gas pump prices in parts of California have been stuck above $4 a gallon for weeks now.

In other Nymex trading, heating oil futures rose 9.58 cents to $3.7709 a gallon while gasoline prices rose 5.92 cents to $3.2958 a gallon. Natural gas futures rose 29.1 cents to $11.245 per 1,000 cubic feet.

In London, Brent crude for July delivery added $2.46 to $127.52 on the ICE Futures Exchange.

___

Associated Press Writers Thomas Hogue in Bangkok, Thailand and George Jahn in Vienna, Austria contributed to this report.

Don't hope for gas prices to drop, says oil economist


By Ángel González
Seattle Times business reporter

John Felmey, of the American Petroleum Institute(pic)

Most drivers think $4 per gallon of gasoline is too much to pay in a weakening economy. Sales for sport-utility vehicles are plummeting. And people are actually driving less.

But don't expect prices to fall anytime soon despite slackening domestic demand, American Petroleum Institute chief economist John Felmy said Wednesday. The API, based in Washington, D.C., represents the U.S. oil and gas industry.

Gasoline prices are driven by the high cost of crude oil, which surpassed $125 a barrel on Wednesday. That's in large part because the slowdown in U.S. oil demand is being offset by growing consumption in China, India and the Middle East, said Felmy, who came here for a speech to the Seattle Economics Council.

"You have 2 billion people who want cars," he said.continue.....

Oil prices spike to record above $117 a barrel

By THOMAS HOGUE

BANGKOK, Thailand (AP) — Oil prices spiked to a record above $117 a barrel Monday in Asia following an attack on a key pipeline in Nigeria at the end of last week.

Comments over the weekend by an OPEC official that the group isn't likely to increase production also supported prices.

Abdullah el al-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said Sunday that oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply — something he doubted.

"Oil prices, there is a common understanding that has nothing to do with supply and demand," al-Badri said on the sidelines of an energy conference in Rome.

Light, sweet crude for May delivery rose as high as $117.05 a barrel in Asian electronic trading on the New York Mercantile Exchange early Monday. At midday in Singapore, the contract was trading at $116.73 a barrel, up 4 cents from the end of last week.

On Friday, May crude surged $1.83 to $116.69 a barrel following the attack on the Royal Dutch Shell PLC pipeline by the Movement for the Emancipation of the Niger Delta — the main militant group in Nigeria's restive south.

The group also promised further attacks on the petroleum industry in Africa's largest producer of crude oil.

Last Friday, Shell confirmed a pipeline leak that it said appeared to have been caused by explosives. It said it had isolated the line for repairs and that a small quantity of production had been shut.

Attacks since early 2006 on Nigerian oil infrastructure by the militant group have cut nearly one-quarter of the country's normal petroleum output, boosting oil prices. Nigeria is a major supplier of oil to the U.S.

A host of other supply and demand concerns in the U.S. and abroad, along with the dollar's weakness, have served to support prices, even as record retail gasoline prices in the United States appear to be dampening demand. Crude prices rose nearly 6 percent last week.

Analysts believe the weaker dollar is the primary reason oil has soared well past $100 a barrel this year. A sinking dollar draws investors to hard commodities such as oil and gold as hedges against inflation. Also, a weak dollar makes the commodities less expensive for buyers operating in other currencies.

OPEC Secretary-General al-Badri said Sunday that the group "will not hesitate" to increase production if it thought the higher prices were due to shortages. But he said more oil will not solve the high prices.

Also over the weekend, Iran's hard-line President Mahmoud Ahmadinejad was quoted Saturday as saying crude oil prices at $115 a barrel are too low, and that oil must "discover its real value."

"The oil price of $115 a barrel in today's global markets is a deceiving figure. Oil is a strategic commodity that needs to discover its real value," the Web site of Iran's state-run television quoted Ahmadinejad as saying.

The Iranian president made the remarks during a visit to an oil and gas exhibition in Tehran late Friday.

In other Nymex trading, heating oil futures were flat at $3.2923 a gallon while gasoline prices fell 0.18 cent to $2.9875 a gallon. Natural gas futures rose 1.3 cent to $10.60 per 1,000 cubic feet.

Brent crude futures for June rose 3 cents to $113.95 a barrel on the ICE Futures exchange in London.

Oil Falls a Second Day on Signs Prices Will Curb U.S. Demand

By Christian Schmollinger

April 11 (Bloomberg) -- Crude oil fell for a second day in New York on signs that high prices and a slowing economy will curb U.S. fuel consumption.

The four-week average of implied U.S. fuel demand was less than last year for the 10th straight week, the Energy Department reported on April 9. Gasoline use may drop this summer for the first time in 17 years, the agency said. Crude reached a record $112.21 a barrel on April 9.

``You look at the supply and demand fundamentals in the transportation fuel market, demand has been weak,'' said Victor Shum, senior principal at Purvin & Gertz Inc. in Singapore. ``The fundamentals don't support the rally in oil pricing so some caution has returned to the market.''

Crude oil for May delivery fell as much as 62 cents, or 0.6 percent, to $109.49 a barrel in after-hours trading on the New York Mercantile Exchange. It was at $109.92 at 2:59 p.m. Singapore time. Yesterday, futures fell 76 cents, or 0.7 percent, to settle at $110.11 a barrel. Prices are up 77 percent from a year ago.

Crude oil in New York rose to a record $112.21 a barrel on April 9 after an unexpected decline in U.S. oil inventories.

``The demand situation is deteriorating all the time,'' said Rowan Menzies, head of research at Commodity Warrants Australia Ltd. in Sydney. ``There is a disconnect between the price of oil right now and what the data is telling us in terms of demand slowing down.''

Weak Dollar

Brent crude for May settlement was at $108.29 a barrel, up 9 cents, on London's ICE Futures Europe exchange at 3 p.m. Singapore time. The contract yesterday declined 0.3 percent to settle at $108.20, after reaching a record $109.98.

Oil prices also fell as the euro declined from a record against the dollar. The dollar's drop has encouraged investors to buy commodities and made oil cheaper for buyers in other currencies.

Federal Reserve officials anticipated the U.S. economy will shrink in the first half of the year and expressed some concern about ``a prolonged and severe economic downturn'' as they cut interest rates last month, according to minutes of the March 18 Federal Open Market Committee meeting, released April 8.

U.S. implied fuel demand averaged 20.5 million barrels a day in the past four weeks, down 0.4 percent from a year earlier, the Energy Department said.

``Everyone seems to be blithely ignoring the fundamentals of supply and demand at the moment,'' said Commodity Warrants' Menzies. The economic situation in the U.S. ``should be having an impact on people's perceptions of what demand will do in the next three months.''

Crude oil may fall next week as imports increase and U.S. refiners operate at below-average rates, bolstering inventories.

Fifteen of 28 analysts surveyed by Bloomberg News, or 54 percent, said prices will drop through April 18. Eleven of the respondents, or 39 percent, said futures will rise and two forecast that prices will be little changed. Last week, 47 percent said oil would decline.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net.

Oil Prices Fall on Supply Report

By PABLO GORONDI

Oil prices fell further Thursday after dropping by more than a dollar in the previous session on larger-than-expected increases in U.S. crude and gasoline supplies.

Prices were still not far from Tuesday's record close of $100.88 a barrel as the U.S. dollar traded at fresh lows against the euro. Worries about the American economy is driving more money into energy futures as a hedge against inflation.

The report by the U.S. Energy Department's Energy Information Administration showed that country's crude oil inventories rose by 3.2 million barrels, or 1 percent, to 308.5 million barrels.

Although that number is slightly lower than levels a year ago, it is well ahead of the 2.4 million barrel gain analysts had been expecting, according to a survey by Dow Jones Newswires. It was the seventh straight week the report showed a rise in crude inventories, suggesting the U.S. at least has more than enough oil to meet demand.

Light, sweet crude for April delivery lost 39 cents to $99.25 a barrel in electronic trading on the New York Mercantile Exchange, midday in Europe.

The contract fell $1.24 to settle at $99.64 a barrel Wednesday after surging as high as $102.08 a barrel, a trading record. On Tuesday, the contract jumped $1.65 to settle at a record $100.88 a barrel.

In London, Brent crude fell 7 cents to $98.20 a barrel on the ICE Futures exchange.

The EIA data showed gasoline inventories also jumped more than expected — by 2.3 million barrels to 232.6 million barrels; analysts had expected a more modest rise of 400,000 barrels. Refinery activity also increased much more than expected.

The weakening U.S. dollar also helped prop up prices. The 15-nation euro jumped to a record $1.51 against the greenback, meaning that crude remains a relative bargain for buyers overseas. Gold — another commodity seen as a hedge against inflation — also struck a record Wednesday.

In his testimony to the U.S. Congress Wednesday, Federal Reserve Chairman Ben Bernanke warned of sluggish business growth ahead, and signaled a willingness by the central bank to cut interest rates again. But Bernanke also noted that the Fed must keep a close watch on inflation given the sharp rise in energy prices and other costs.

Heating oil futures lost 1.16 cents to $2.7595 a gallon (3.8 liters) while gasoline futures dropped 1.32 cents to $2.4645 a gallon.

Natural gas futures rose 4.5 cents to $9.105 per 1,000 cubic feet.

Associated Press writer Gillian Wong in Singapore contributed to this report.

Oil prices fall back from $100 barrel

updated 3:29 p.m. ET Jan. 4, 2008(A.P)

NEW YORK - Oil futures retreated further from their record levels above $100 a barrel Friday after the government reported lower-than-expected job growth in December, adding to fears of a recession that could crimp demand for oil. Gas prices, meanwhile, rose 2.2 cents a gallon overnight, following crude’s recent rally.

The Labor Department said employers created just 18,000 jobs last month, far less than the 70,000 analysts expected and the smallest increase since August 2003. The government also said the unemployment rate jumped to 5 percent in December from 4.7 percent in November, more than the 4.8 percent analysts expected and the highest level since November 2005.

While energy traders could have interpreted that data positively — in the past energy investors have seen reasons to buy in any economic news likely to prompt the Federal Reserve to cut interest rates — traders are becoming more concerned that record high energy prices are helping to push the economy into recession.

Light, sweet crude for February delivery fell $1.27 to settle at $97.91 a barrel on the New York Mercantile Exchange Friday.

Gas prices, meanwhile, jumped overnight to a national average of $3.074 a gallon, according to AAA and the Oil Price Information Service. Gas prices have risen in recent weeks, following oil’s rise into record territory. Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service, said gas prices are likely to add another 5 cents over the next week or so, but will likely then slide as demand ebbs in January and February.

Indeed, the Energy Information Administration on Thursday reported that gasoline demand rose a tepid 0.1 percent over the last four weeks.

“It’s just a terrible time of the year for demand,” Kloza said.

But in the spring, when demand picks up and refiners start cranking out gasoline to meet expected strong summer driving demand, gas prices will likely rebound and could set new records. The EIA predicts gas prices will peak over $3.40 a gallon this spring, well above the record price of $3.227 set last May.

Of course, while demand is a factor in the cost of gasoline, much of the price Americans pay at the pump is based on the price of crude oil. In recent months, oil prices have often moved higher after the government reported dismal economic data because traders believe signs of economic weakness raise the chances that the Fed will cut interest rates. Lower interest rates also weaken the dollar, whose decline has contributed to more expensive oil.

“Oil is in a Federal Reserve induced oil bubble,” said Phil Flynn, an analyst at Alaron Trading Corp., of Chicago, in a research note. “The Fed’s response to the housing crisis been essentially to aggressively cut rates but that has come at the expense of the dollar and has fed directly in to commodity price inflation.”

But traders will only stick with that investment strategy for so long. A recession is seen as much more important to long-term energy prices than the easy money that is a byproduct of lower interest rates, Kloza said. Reflecting this, oil prices reacted little Friday afternoon to the Federal Reserve’s plans to increase the amount of money available to banks under the auction process it created to try to ease the credit shortage.

Other energy futures also fell Friday. February heating oil futures fell 3.56 cents to settle at $2.6835 a gallon on the Nymex while February gasoline futures dropped 3.04 cents to settle at $2.511 a gallon.