CRUDE OIL/PART 1 - International In Scope
10/30 16:08 - Oil Prices End Higher With Help From OPEC
LONDON, Oct 30 - Oil prices ended higher on Friday with help from OPEC and non-OPEC producers who discussed ways to try to strengthen cooperation and stabilise the market.
The world benchmark crude, Brent blend, was last traded 13 cents higher at $13.21, up on comments by OPEC Secretary-General Rilwanu Lukman that the producers' group was not ruling out any options in its effort to increase prices.
The price was still well below the $13.80 average for the year so far.
OPEC and non-OPEC producers meeting in South Africa discussed ways of using informal contacts to address the current market weakness, Lukman told reporters.
Eight oil ministers who met to discuss the issue found a rapport and achieved a very good understanding, he said.
The Organisation of the Petroleum Exporting Countries is already trying to increase low prices and Lukman said: "The idea is to reinforce what OPEC is doing."
He said the meeting, held on the sidelines of an international energy conference in Cape Town, discussed ways of boosting the kind of OPEC and non-OPEC contacts that resulted in unprecedented production cuts earlier this year.
"The idea of cooperation is not new. We want to strengthen that, without formalising it," Lukman said.
He said the non-OPEC producers who have joined in cuts in concert with OPEC producers had made a very good effort to fulfil their promises.
Saudi Arabia and other leading oil producers have played down the prospect of deeper supply cuts and insist that the deal in place should be given more time.
The Saudis spearheaded a 3.1 million barrel per day (bpd) cut which helped to stabilise oil markets after prices hit 10-year lows in the northern hemisphere summer.
Lukman said the meeting between the oil ministers of OPEC states Saudi Arabia, Venezuela, Qatar, Algeria, Libya, the United Arab Emirates and non-OPEC producers Egypt and Mexico had achieved "good understanding" on the current situation and possible future steps to revive oil prices.
Over the past five years, oil prices have doubled and then halved again as OPEC tried to restrain surging output and demand faltered in battered Asian economies.
Saudi Arabian Oil Minister Ali al-Nami said earlier in Cape Town that his country wanted to pursue efforts to smooth out the volatility in the market.
"To assure an adequate return to producers, the price of crude oil must be higher to justify the investment and keep supplies coming, yet not so high as to stifle demand or overstep competitive lines," Naimi said.
Determining a fair oil price and "setting the mechanism" to maintain it would be one of the main issues facing the world's oil market, he said.
With oil in the bargain basement, OPEC's current deal to trim supply has achieved a relatively high degree of compliance from members, who have seen their income falling steadily.
Smaller oil producers Algeria, Kuwait and Libya have called for further reductions but found little support in the powerful Saudi camp, which appears to support an extension of the current levels to the end of next year rather than deeper cuts.
That is the option more likely to gain support from Venezuela, which cannot afford more reductions in output.
Non-OPEC Mexico said it would support an extension of the cuts if OPEC agreed on that course at its meeting in Vienna next month and Norway said it would make up its mind by the end of the year.
OPEC members have delivered some 90 percent of the 2.6 million bpd pledged cuts, surprising many analysts who had expected a lower level of compliance.
But even with another 500,000 bpd of cuts from non-OPEC members such as Russia, Oman and Mexico, oil prices remain depressed.
10/30 16:18 NYMEX Crude Surges Past $14 Near End Of Session
NEW YORK, Oct 30 - Crude oil futures on the New York Mercantile Exchange sprinted past $14 and kept running on Friday in a late-day rally that was largely driven by short-covering, funds buying and other technical factors, traders said.
"There wasn't a lot of news," said one floor trader who wished to remain anonymous. "We've got some things on the forefront, but there was no real news today that was driving the surge. Short-covering rally that turned into speculative buying. It was an unusual day. People were calling up wanting to know what was the news to drive this market. There was no news."
Another factor, traders said, was the expiration of both the distillate fuels and gasoline benchm contracts.
The NYMEX front-month December crude oil contract settled up 18 cents at $14.42 per barrel. The November Heating oil retired at 38.82 cents per gallon, up 0.46 cents on the day. The November gasoline contract retired at 45.17 cents per gallon, up 0.27 cents from Thursday.
The news from South Africa, where oil minister met this week, was disappointing in terms of supporting the market, traders said.
"Cape Town has been a waste of time," said Tom Bentz of Cresvale International.
The oil ministers did a lot of jawing, but came up with no plans to cut production, which traders hoping for a bullish market wanted.
Another trader said that the only news that possibly fed the late-day rise of prices across the NYMEX energy board was the delay in the restart of Chevron's 295,000-barrel-per-day refinery in Pascagoula, Mississippi. The company said that the plant will begin restart by the end of November and be back in full production by the end of December. The plant has been down since a late-September flood caused by Hurricane Georges.
But the impact of those headlines was seen as minimal, but still the most significant news to come out during the surge of the NYMEX, traders said.
Once the NYMEX December contract hit $14.10 per barrel, funds began buying with ferver.
There was fear that once-mighty Hurricane Mitch would regain strength after entering the Gulf of Mexico over the weekend. But fear of a strong blow became interest in a heavy rain as forecasters altered their once-dire predictions for a storm that at one time had winds up to 180 mph.
10/30 16:31 U.S. Cash Crude - Sweet, Sour Grades Turn Bearish
NEW YORK, Oct 30 - U.S. crude oil prices were pulled higher after the futures contract rallied late Friday, but the gains did little to mask a spreading bearish sentiment in the cash market.
U.S. cash crudes including Light Louisiana Sweet/St. James and West Texas Sour/Midland lost ground Friday against benchmark West Texas Intermediate/Cushing in a broad sell-offprompted by concerns about competition from foreign sources. By the close of the session, traders said LLS/St. James had lost more than a nickel, finishing at a discount of between 39 and 35 cents a barrel.
The decline in differentials came as WTI/Cushing jumped to finish the week around $14.45 a barrel, well above a day's low of about $14.00 a barrel.
The New York Mercantile Exchange (NYMEX) December contract settled 18 cents higher at $14.42 a barrel as OPEC oil ministers spoke of strengthening ties but acknowledged that no new production cuts had come out of their discussions in Cape Town, South Africa.
Meanwhile, cash crude traders said there was growing concern in the market about competition from foreign suppliers with the arbitrage now open to bring incremental North Sea crude from Europe into the Gulf Coast.
LLS/St. James has been hard hit by the prospect of foreign cargoes pouring into the market, and has tumbled steadily lower since hitting a discount of just 10 cents earlier in the week.
On Friday, lower LLS/St. James differentials pulled Heavy Louisiana Sweet/Empire down to minus 65 cents, while Eugene Island dipped to $1.20 a barrel below WTI/Cushing.
West Texas Sour/Midland also lost ground Friday, as concerns passed that Mitch, once a hurricane but now a tropical storm, would have a long-term impact on Mexican production. Early Friday, WTS/Midland changed hands at $1.58 and $1.60 below the benchmark, then later plummeted to minus $1.65 a barrel. On Thursday, it traded late at minus $1.56 a barrel.
10/30 16:48 US Foreign Crude - LATAM Tenders Results By Monday
NEW YORK, Oct 30 - Traders on Friday said bids and offers for tenders involving Chile's and Colombia's state oil companies won't be known until Monday.
They said the market for foreign crudes into the United States is steady but that little was done on Friday.
Brent to be sold during the last days of November into the Gulf Coast was said to be valued around 90 cents under December West Texas Intermediate.
Colombia's state-owned oil company Ecopetrol on Thursday issued a call for bids for a 500,000-barrel boat of Vasconia crude. One trader predicted bids will come in around 2.60/2.65 under December West Texas Intermediate, FOB Covenas. However, the last done for Vasconia was minus $2.80 from WTI, and other trades said they expected little change.
The dates of the loading of the Vasconia will be November 25-29. Deadline for the bids was Thursday.
Ecopetrol is also looking for bids for three Cusiana cargoes. One is offered November 30-December 1, one December 3-7, and another December 4-8. A trader said he expected the bids to come in around $1.55 to $1.50 under January West Texas Intermediate. Deadline for bids is Friday.
Chile's national oil company ENAP has put out a tender to buy almost a million barrels of crude oil. Deadline for the offers was Thursday. Delivery is seen in Chile around December 15.
ENAP put out a buy tender for 960,000 barrels for December 15-19 delivery. They want crude with a gravity of 25 API and a sulfur content of 2% or less.
The European Union on Friday lightened up on Nigeria now that Lagos has promised to return to civil rule next year. The EU's 15 members unanimously approved easing diplomatic and sporting sanctions, but to keen an embargo on arms sales and on cooperation with Nigeria's military.
The new policy takes effect November 1.
Nigeria's military ruler Gen. Abdulsalami Abubakar has promised a return to democratic rule in May.
In Colombia, the Cano Limon pipeline on Friday was said to be repaired after the 67th bombing this year by rebels. Occidental was forced on Thursday to cut production from 152,000 barrels-per-day of the Cano Limon field to 30,000 bpd.
10/30 16:58 U.S. Spot Prod-Jet Fuel Diffs Soar On Tight Supply
NEW YORK, Oct 30 - Jet fuel took the spotlight in the U.S. products cash market on Friday amid tight non-contaminated supplies, in an otherwise dull end to the month, traders said.
The Colonial Pipeline said Friday that on October 29 it declared 77,000 barrels of 54-grade jet fuel to be off-spec and tanked the barrels in Greensboro, North Carolina.
Northeast jet fuel differentials were punched higher as the contamination of the pipeline supplies comes at a time when stocks were still low from Tosco and Sun's plant turnarounds, traders said.
Gulf Coast was also supported on the bullish sentiment ahead of its scheduling.
Traders also expected supplies to be cut for some time since Chevron Corp.'s flood-damaged 295,000 bpd refinery and petrochemical plant at Pascagoula, Mississippi, will be fully operational by the end of the year.
Oil futures onthe NYMEX ended firmer in a late-day rally that was largely driven by short-covering, funds buying and other technical factors, traders said.
December crude oil contract settled up 18 cents at $14.42 per barrel.
The November Heating oil retired at 38.82 cents per gallon, up 0.46 cents on the day. December heating oil settled up 0.39 at 39.86 cents.
The November gasoline contract retired at 45.17 cents per gallon, up 0.27 cents from Thursday, December up 0.24 cent to 44.17 cents, narrowing the backwardation which had blown up since Thursday on a market squeeze, traders said.
NEW YORK HARBOR
Harbor jet fuel kept most of its gains from Thursday on off-spec pipeline supplies from the Gulf Coast, and low supllies following the Sun and Tosco scheduled turnarounds, while the rest of the market was quiet in thin trade, players said.
New York prompt 54-grade jet fuel held about 0.25 cent of gains and traded at 6.00 cents over the screen.
Friday morning the Colonial Pipeline said it had tanked 77,000 barrels of New York Harbor-bound jet fuel in Greensboro, N.C. after the material had been declared off-spec.
Prompt by November 8 gasoline M4 was pegged at 0.70/0.50 cent under the screen. On the futures side, traders said a Wall Street trader was sitting on a large amount of barrels into the expiration date.
Low sulphur diesel was steady pegged at 1.25/1.50 cents over the screen.
Heating oil kept Tuesday's gains as players looked to take advantage of the steep NYMEX contango, traders said.
Prompt heat was slightly stronger at 0.40/0.20 under the December screen. By late afternoon, NYMEX December heat futures were running a 0.95 cent a gallon firmer than November heat futures.
Regular reformulated gasoline, the A4 Grade was pegged at 0.40/0.60 cents over the NYMEX. The premium D2 reformulated gasoline was pegged at 3.25/3.50 over the December screen.
GULF COAST
Jet fuel differentials rose by up to 0.75 cents ahead of its scheduling deadline late Friday as tight supplies saw buyers scrambling for barrels, traders said.
Prompt back 31 cycle of jet fuel was pegged firm on its differentials, the 54-grade trading at 2.25/2.35 cents over the print compared to Thursday's at 1.50 to 1.75 cents. The 55-grade was pegged as high as a penny higher that the 54-grade.
Distillates tightened a little while gasoline "slipped noticeably", a trader said.
Distillates ended a shade firmer - low sulphur diesel on the prompt back 31 cycle was pegged at a 0.60-0.55 cent discount, heating oil at 2.30 cents below the print.
On the gasoline, prompt back 31 cycle of regular M4 was last offered at 4.40 cents discount, with buyers only 0.20 cent lower. Anys were pegged at 4.60/4.50 cents discount.
Premium V4 conventional gasoline was at a 3.00 cent regrade to the M4, the reformulated A4 at a 2.25 cent regrade, and the premium D4 which schedules Friday, at 0.50 cent over the Vs.
MIDCONTINENT
Trade in Group Three remained thin but weak on the last trading day of the month, with gasoline softer on back of the Gulf Coast and growing Williams inventories, traders said.
November regular gasoline in the Group was pegged at a 3.50/3.00 cents discount and the premium grade at a 2.75/3.25 regrade.
On the low sulphur diesel, the emphasis was on the prompt, trading firm at a 2.20 cents premium. Jet fuel was at a 3.50/4.00 cents premium.
Chicago was similarly dull - November regular gasoline was pegged at a 3.10 cents discount, premium gasoline steady at a 3.25 cent regrade, jet fuel at 4.50 cents premium and low sulphur trading at a 1.20 premium.
10/30 17:21 North Sea December Brent even U.S. aftermarket
NEW YORK, Oct 30 - North Sea Brent remained steady late Friday in the United States aftermarket, traders said.
December Brent was valued at about $13.21 a barrel, on par with its close earlier Friday on the International Petroleum Exchange.
One full boats of 500,000 barrels of crude was done on Friday at $13.20 per barrel. A 300-lot cargo was done at $13.22 per barrel. Three 200-lot cargoes were also done, at $13.22, $13.21, and $13.20.
10/30 19:55 U.S West Coast ANS Diffs Steady Ahead Of Weekend
LOS ANGELES, Oct 30 - U.S. West Coast crude oil differentials were steady Friday while absolute prices rose with higher NYMEX oil futures.
Trade was quiet ahead of the weekend and there were no fresh reports of Alaska North Slope (ANS) trade following a sale Wednesday at the discount of $1.37 a barrel under December West Texas Intermediate / Cushing.
The cargo was slated to arrive at an independent refiner's Hawaii plant in mid-December, traders said.
Buyers said the deal signaled cheaper ANS for December. They claimed adequate production and plenty of foreign alternatives were discouraging them from buying ANS.
At least three buyers were looking to push the December ANS differential as wide as $1.50 under WTI.
With the discount flat, pure ANS prices rose with NYMEX oil, which settled 18 cents a barrel higher in daytime trade.
The notional price for West Coast ANS fell to $13.02/13.19 a barrel from $12.85/13.02.
West Coast spot crude markets were idle for other grades.
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