CRUDE OIL PRICING & RELATED / PART 1 - International In Scope
N AMERICA MID-CONTINENT (MAPP) ENERGY SUMMARY & 1-10 DAY TREND
Omaha, Neb.-Nov. 4-FWN--Strategic Weather Services
MID-CONTINENT (MAPP)
SUMMARY: Upper-level trough in central Plains combined with cold surface temperatures developed early morning rain/snow mix in eastern NE, and all day light snow in central and western NE and western SD; 2-4 inches of snow accumulated in Black Hills of SD. Light snow continues this morning in central NE westward into Black Hills.
Temperatures in the region continued much below normal with highs in the mid- to upper 30s from central Plains to central Saskatchewan and Manitoba. Low 40s prevailed in eastern IA/MN. Lows fell to teens and 20s in Saskatchewan/Manitoba and ND/MN, while remainder of region in upper 20s and low 30s.
FORECAST: Light snow will continue today in western High Plains, gradually diminishing overnight. Cloudy skies will remain over much of central and Northern Plains limiting temperature warming. Highs in upper 30s and low 40s central Plains with low to mid-30s Northern Plains into southern Canada. Upper 20s to low 30s in central Prairies of Saskatchewan and Manitoba. Lows will be the coldest of the year so far in upper Midwest with lows in low teens from Canada to southern ND/MN. Central Plains will see lows in upper teens to mid-20s.
1 TO 5 DAY TREND: Temperatures much below to below normal; precipitation near normal.
6 TO 10 DAY TREND: Temperatures below normal; precipitation above normal.
11/04 16:14 - World Oil prices steady as Iraq tensions simmer
LONDON, Nov 4 - The oil market was calm in the face of the latest Iraq-U.N. crisis as prices dropped then steadied on Wednesday on further evidence of comfortable supplies following publication of latest U.S. stocks figures.
World benchmark Brent Blend futures for December delivery closed the day one cent down at $12.83 a barrel after recovering from sharp falls earlier in the day.
Oil prices remain more than $6 a barrel below last year's average despite producers' efforts to lift them by agreeing a series of production cuts to remove some three million barrels per day (bpd) from the market this year.
Not even the threat of military action against Iraq nor disruption to Nigerian oil sales because of local unrest in oil producing areas in recent weeks has shaken the market.
"The Iraq story is on the backburner unless the market fears that there will be a suspension of oil supply, but this is unlikely to happen even if there is military action, and the possibility of that happening is quite remote," said a New York broker.
He added that so long as OPEC powerhouse Saudi Arabia maintained its opposition to further production cuts, the market would remain under pressure even beyond OPEC's scheduled meeting in Vienna on November 25.
"It doesn't look like our friends at OPEC are going to come up with any surprises beyond extending the current agreement.
The Saudis have made it quite clear that they do not favour any additional cuts and unless the market sees the Saudis rethinking, it will not rally," he added.
But the broker said there was not much downside to the market and, with prices at such low levels, oil was more a buy than a sell.
Ten of OPEC's 11 members -- Iraq is excluded while its oil exports remain under embargo -- agreed earlier this year to trim supplies by 2.6 million barrels per day. Members outside the Organisation of the Petroleum Exporting Countries took a cut of 500,000 bpd when prices sank to a new 10-year low earlier this year.
U.S. Defense Secretary William Cohen was on Wednesday trying to whip up support among America's Gulf allies over the new crisis with Iraq over Baghdad's decision to suspend cooperation with U.N. arms inspectors.
But the latest stand-off was not linked to oil sales under the U.N.-sponsored oil-for-food programme under which Iraq is currently exporting 1.9 million bpd.
The U.S. stock figures published late on Tuesday by the American Petroleum Institute showed crude stocks in the world's largest economy grew by 7.99 million barrels while imports rose by 32,000 to 8.54 million bpd. The stocks build was double that expected by traders and further proof that there was no shortage of oil.
11/04 16:24 NYMEX oil ends with slim loss as players eye Iraq
NEW YORK, Nov 4 - Crude oil futures slipped on the New York Mercantile Exchange Wednesday on a sharp build in U.S. crude stocks last week, but losses were limited amid renewed Iraq/U.N. tension, traders said.
The contract seesawed in late trading, moving down as players sold some positions but regained a few points later on short covering. It settled at $14.14, down six cents.
December heating oil ended at 39.39 cents a gallon, up 0.02 cent, but easing from its session high of 40.05. The contract traded as low as 39.00 cents.
December gasoline ended at 43.36 cents a gallon, down 0.35 cent. It ranged between 43.00/43.80 cents.
In London, December Brent on the International Petroleum Exchange recovered losses stemming from the bearish API data and settled at $12.83, off a penny.
In early trade Wednesday, NYMEX December crude dropped to $13.92 a barrel, down 28 cents from Tuesday, in reaction to an increase of nearly 8.0 million barrels of crude in weekly inventory data reported by the American Petroleum Institute Tuesday evening.
The stockbuild was larger than expected and seemed excessive in view of a jump of 5.1 percent in refinery runs, analysts said.
But the early fall was cushioned by the U.S. Department of Energy's status report Wednesday morning, showing a lower increase of 3.8 million barrels, which was in line with market expectations.
Still, bearish sentiment dominated as the latest stockbuild jacked up U.S. crude inventories to nearly 344 million barrels, rising more than 31 million barrels above their year-ago levels.
December crude regained strength at midday. Traders who opened shorts recently in anticipation of a stockbuild covered some of those shorts midday, pushing up the contract to $14.30.
Heating oil futures also strengthened. Distillates showed a draw of 2.1 million barrels in the DOE data and a drop of 946,000 barrels in the API's. Distillate stocks include heating oil, diesel oil and jet fuel.
Gasoline futures were sold off as U.S. stocks soared 3.2 million barrels in the API data. A slim build of just 500,000 barrels in the DOE data failed to stem the selling, traders said.
A trader from a large Midwest-based oil company said the simmering tension between the Iraq and the U.N. over arms inspections by the U.N. staff was "giving people a bit of an incentive not to sell," preventing crude from making deeper losses.
But the market appears confident that diplomatic measures will finally resolve the latest crisis over Iraq, other traders said, even as Iraq remained defiant amid growing calls for it to back down.
Defense Secretary William Cohen continued rallying support from U.S. allies in the Gulf, after he agreed earlier in the week with his British counterpart that force could be used -- if Iraq fails to back down on its decision to end cooperation with the weapons inspectors.
As this developed, Iran, a major oil producer, called for a diplomatic solution to the latest Iraq crisis, saying military action would increase regional instability, according to Tehran radio. Iran also called on Iraq to comply with U.N. arms inspections.
Meanwhile, meteorologists said late Wednesday that Hurricane Mitch, which has revived as a tropical storm, would bypass Mexico's oil production facilities in the Gulf of Mexico and instead head for Cuba.
Mexico's three main crude oil ports in the Gulf remained operating, although a port official at the largest, Cayo Arcas, said fierce winds could shut down the port later in the day.
The storm is blamed for the deaths of an estimated 7,000 Central Americans as it dumped heavy rains, causing severe flooding and horrendous mudslides, particularly in Honduras and Nicaragua.
"It's not headed toward the Gulf of Mexico -- it's actually leaving Mexico and seems to be headed toward Cuba and maybe Florida," said the meteorologist, who declined to be named.
11/04 17:13 North Sea Brent drops nine cents in U.S. trading
NEW YORK, Nov 4 - North Sea Brent lost nine cents a barrel in a flurry of late U.S. trading on Wednesday.
While December Brent closed at $12.83 a barrel on the International Petroleum Exchange earlier Wednesday, U.S. traders quoted it around $12.74 in the aftermarket.
Traders said it was a fairly heavy session, with two full cargoes of December cash Brent done at $12.76 a barrel and a third done at $12.75 a barrel. Other deals involved 750 lots of December cash partial cargoes at $12.70, 250 lots at $12.72, 100 lots at $12.73, 100 lots at $12.74, 200 lots at $12.75 and another 350 lots at $12.76.
Traders said the Brent December-January spread traded three times at minus 27 cents.
11/04 17:35 U.S. spot products-Diffs slip on rising throughput
NEW YORK, Nov 4 - Increased refinery runs and aggressive selling pushed U.S. product cash differentials down late Wednesday, trader said.
On the Gulf Coast, gasoline slipped 0.50 cent and distillates including jet fuel by 0.75 pts on the high stocks and ahead of the American Petroleum Conference next week in San Francisco.
New York Harbor fell on the back of the weaker Gulf market with low sulphur diesel shedding nearly half a cent and jet fuel around 0.75 cent amid increasing output, traders said.
The API said refinery runs in the last week of October were up 5.1 percent to 93.6 percent with refiners returning from turnaround and unplanned shutdowns.
On the NYMEX, December crude oil futures slipped six cents per barrel to settle at $14.14 amid a sharp build of 8.0 million barrels in U.S. crude stocks last week, but losses were limited amid renewed Iraq/U.N. tension, traders said.
December heating oil ended at 39.39 cents a gallon, up 0.02 cent, but easing from its session high of 40.05 after distillates showed a draw of 2.1 million barrels in the DOE data and a drop of 946,000 barrels in the API's. Distillate stocks include heating oil, diesel oil and jet fuel..
December gasoline ended at 43.36 cents a gallon, down 0.35 cent amid a sell off as U.S. stocks soared 3.2 million barrels in the API data. A slim build of just 500,000 barrels in the DOE data failed to stem the selling, traders said.
NEW YORK HARBOR
Diesel and jet fuel differentials slipped in thin trade while pipeline supplies of gasoline was firmed on tight piepeline supplies.
Prompt 54-grade pared some of its previous day's penny gains, pegged down at a 6.00/6.25 cents premium compared to 6.75/7.00 cents on Tuesday. 55-grade was quoted at 6.50 cents.
Low sulphur diesel also slipped amid talk of increased output with prompt supplies traded at 0.25 cent over the December screen, shedding around 0.40 cent.
Prompt regular conventional M5 gasoline traded at firm premium of around 0.50-0.75 cent for pipeline barrels because of "Buckeye problems" a trader said.
Barges however were offered a quarter cent lower at q 0.25 cent discount while premium conventional V5 was pegged around a penny lower at a 1.75/2.00 cent regrade over the M5.
The reformulated grades also slipped -- regular A5 traded over a quarter cent lower at a 0.90 cent premium, A9 at a 1.80 cents premium, and premium grades D5 at 2.75/3.00 and D9 at 4.75/5.00 cents.
Prompt heating oil No.2 held steady at a 1.25/1.00 cent discount.
GULF COAST
Gulf jet fuel and gasoline fell hard Wednesday afternoon as market sentiment turned bearish on reports of increasing refinery runs and amid selling ahead of the API conference next week, traders said.
Both grades of jet fuel fell also because players dumped barrels ahead of scheduling later in the day. Jet 55 grade was heard done at 2.85 over the screen while 54-grade was pegged at 1.75/2.00 over.
Regular gasoline front 32 cycle regular gasoline slipped 0.50 cent gain and was pegged at 5.50/5.25 cent under the December screen.
Low sulphur diesel slipped 0.25 cent from the morning for front 32 cycle, and was pegged 1.00/0.75 cent under.
Heating oil slipped was no stranger to the bears and was pegged 0.20 cent weaker at 2.60/2.50 under the screen for front 32 cycle material.
Premium V4 conventional gasoline was at a 3.00 cent regrade to the M4, the reformulated A4 at a 2.40 cent regrade, and the premium D4 at 0.75/0.50 cent under the screen.
MIDCONTINENT
Chicago low sulphur diesel differentials continued to firm on harvesting demand, traders said.
Chicago low sulph was pegged about 0.75 cent higher at 2.50/2.75 cent over the screen for prompt 2.25/2.50 over for the anys.
November regular gasoline in Chicago was pegged at a 3.75/3.50 cents discount and the premium grade at a 3.00/3.25 regrade.
Chicago jet was at a 4.50/5.00 cents premium.
Group Three November regular gasoline was pegged at a 3.75/3.50 cents discount, trading at 3.75 cent under and premium gasoline steady at a 3.25 cent regrade, jet fuel slipped 0.25 cent to 3.25/3.75 cents premium.
11/04 17:58 U.S. cash crude weakens on flood of imported oil
NEW YORK, Nov 4 - The story of an oversupplied oil market in the U.S. Gulf keeps repeating itself with this week's edition even more horrifying with domestic stocks way up and even more foreign crude on the water than usual.
So on Wednesday there was no surprise when cash values for crude oil grades slipped a bit despite the fact that uncertainty over the Iraqi helped keep differentials from changing much, traders said.
Traders say they await the future of sales of Basrah Light from Iraq to the U.S. A United Nations-administered "oil-for-food" program runs out November 25. There is uncertainty whether Iraq will continue to sell oil after that date. The United States and Iraq have consistently said that the political situation between the two doesn't affect the oil sale, but even they admit privately that the two are more than obliquely linked.
The U.N. Security Council is expected to vote Friday on a resolution that attempts to get Iraq back in line and cooperate with U.N. weapons inspectors.
Outright values of crude oil grades fell in line with the futures market of the New York Mercantile Exchange. The December crude oil contract settled Wednesday at $14.14 per barrel, down six cents. The January contract settled at $14.33 per barrel, down seven cents.
Light Louisiana Sweet/St. James has been the hardest hit over the last several days as traders have sold off positions in anticipation of European, West African, and Colombian cargoes hitting the Gulf Coast. LLS changed hands several times at 50 cents below benchmark West Texas Intermediate/Cushing.
While similar to deals on Tuesday, LLS is trading about 30 cents lower in relation to WTI/Cushing than it was only a week ago.
U.S. traders said differentials for most other cash crudes, including West Texas Intermediate/Midland, were steady early Wednesday.
The losses follow another bearish stock report from the American Petroleum Institute, which released figures late Tuesday showing a nearly eight million barrel build in nationwide crude stocks last week. It was the fourth consecutive build in inventories, leaving them more than 31 million barrels above year ago levels.
The U.S. Department of Energy released data early Wednesday showing a more modest 3.8 million barrel stock build.
A sharp rise of imports over the coming weeks could add to the supply glut, as prices for benchmark crude North Sea Brent have fallen enough to open the arbitrage to ship light, sweet crude cargoes across the Atlantic.
Sour crude also appears to be well-supplied, traders said Wednesday, but West Texas Sour/Midland differentials were up about three cents. WTS/Midland was done at minus $1.76 and minus $1.73.
Louisiana's Eugene Island was quoted between minus $1.45 and $1.40 a barrel, while Heavy Louisiana Sweet/Empire was camped closer to minus 80/75 cents a barrel.
11/04 19:09 U.S. foreign crude - Bears dominate as buyers hide
NEW YORK, Nov 4 - Bearishness reigned in the U.S. market for imported crude on Wednesday, as traders said buyers were lackadaisical while supplies ample.
NORTH SEA, WEST AFRICAN
-- With North Sea Brent on offer into the U.S. Gulf at a discount of $1.00 under December WTI, traders said other sweet crudes, especially Cusiana and domestic crude Light Louisiana Sweet were also under pressure.
Buyers for the Brent are said to be closer to $1.10-1.15, and some traders expect offers will slip.
Several traders are said to be showing the Brent, and the wide trans-Atlantic arb, relatively cheap freight rates as well as weak prices for prompt, or Dated, Brent ensure that even at $1.00 under WTI, they will still lock in substantial profit.
"People aren't selling at a loss," said one Gulf Coast trader drily.
The arb settled at $1.31 a barrel on Wednesday, but its slight decline was made up by cheaper prices for Dated Brent. A prompt Brent cargo was sold at $1.04, four cents cheaper than Tuesday's deals.
-- On Wednesday, Shell announced that it had lifted a force majeure declaration on exports from its Bonny Terminal in Nigeria. The emergency measure was imposed on October 8, after ethnic Ijaw militants seized oil facilities. Force majeure on Shell's Forcados terminal remained in place, however.
The almost month-long disruptions did little to support prices of West African grades, traders noted. Indeed, traders are pointing to a slew of unsold West African grades in the month of November as a relatively bearish sign.
Most of the unsold crude is Nigerian Bonny Light, which is valued around 5-10 cents over Dated Brent, traders said. Other unsold grades include Nigerian Qua Iboe, Escravos, Forcados and Congolese Kitina.
Angolan Cabinda is valued around 95-90 cents under Dated Brent on an fob basis, while Nigerian Qua Iboe was valued at flat to five cents over Dated Brent.
LATAM - VENEZUELA, COLOMBIA, ECUADOR, CHILE
-- Colombia's sweet crude, Cusiana was valued around $1.60-1.55 under West Texas Intermediate, but details about state-owned Ecopetrol's tenders for four December-loading cargoes was unavailable. Bids on the cargoes loading between December 8 and December 22 were due in on Wednesday.
Last week, Ecopetrol awarded three tenders for early December loading cargoes at differentials around $1.60-1.55 under WTI.
-- Ecuador's sour crude is also under pressure from weakening prices of sour crude, notably Alaska North Slope on the U.S. West Coast. Oriente was said to be on offer in the U.S. Gulf at $2.60 under WTI, although buyers may be as far away as minus $2.80.
-- Venezuela's sour crude Mesa/Furrial was valued at $2.70-2.65. The last deal for the grade was heard last week, at $2.65 under West Texas Intermediate, more than 30 cents weaker than the previous deal. Only one more November cargo of Mesa is said to be left, which traders expect to sell for around $2.70 under WTI. PDVSA's December program is expected to include 15 cargoes for spot sales, traders estimate.
-- Traders said Chilean ENAP's buy-tender for 960,000 barrels for delivery December 15-19 was filled with Nigerian Escravos. Traders said the price was equivalent to a slight premium to Dated North Sea Brent.
11/04 20:47 U.S West Coast ANS diffs steady again on Wednesday
LOS ANGELES, Nov 4 - U.S. West Coast crude oil differentials were steady Wednesday while absolute prices fell with broadly lower markets.
Trade was quiet for the third-straight day this week, as dealers assessed their needs for December and prepared for an industry conference next week.
The last cargo of Alaska North Slope (ANS) crude sold at the discount of $1.37 a barrel under December West Texas Intermediate/Cushing.
Traders dismissed any serious impact from an explosion and fire last week that shut in 10,000 barrels per day (bpd) of ANS crude oil for an indefinite period.
The fire occurred at a production platform on the western edge of the North Slope oil region midday Friday, BP said.
The lost output represents less than one percent of the North Slope's total output of 1.2 million bpd.
At least three buyers, meanwhile, were looking to push the December ANS differential as wide as $1.50 under WTI.
With the ANS discount flat, pure ANS prices fell with cash crude oil, which settled about 15 cents a barrel lower in daytime trade.
The notional price for West Coast ANS fell to $12.64/12.80 a barrel from $12.79/12.95.
West Coast spot crude markets were idle for other grades.
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