CRUDE OIL PRICING & RELATED / PART 1 - International In Scope
11/05 14:21 Abby Cohen says energy prices may have bottomed
BOCA RATON, Fla., Nov 5 - Abby Joseph Cohen, one of Wall Street's most-watched stock market analysts, said on Thursday that oil prices could be headed higher, which would boost profits at energy firms and help lift U.S. stock indices.
"It is possible we are close to a trough," said Cohen, the U.S. equity market strategist for Goldman Sachs & Co.
"All you have to do, at the least, is assume we will have a normal winter," she told a crowd of more than 400 at the 26th annual Securities Industry Association convention.
"A cut in the price of energy means a fairly substantial decline in operating profits, so we may be on the very tip of a positive point of inflection," she said.
Oil prices have plummeted over the past year, falling from prices of more than $20 a barrel down to a 12-1/2 year low in June. They have recovered slightly since then, but not much, with oil trading at about $14 a barrel.
Shares of energy-producing companies in the Standard & Poor's 500 Index fell 22 percent in the first half of 1998, she said, battered by the global slowdown and the rising dollar. Most of the world's oil supply is priced in dollars.
Oil profits should also be stimulated by the pullback in the greenback.
"Nations in Asia, particularly Japan, the world's second largest economy, saw dramatic price increases," Cohen said, which strangled energy demand.
A jump in oil prices, and a resulting jump in oil shares, could help U.S. stocks reach Cohen's bullish targets. Oil companies make up 7.6 percent of the S&P 500. Cohen is projecting the Standard & Poor's 500 will hit about 1200 to 1250 in 12 months.
Cohen, who had been bearish on oil stocks for roughly two years, first became bullish on the issues at the end of August.
On the recent stock market volatility, Cohen said that interest rate cuts by global central banks as well as statements by the Group of Seven "have been extremely helpful to calm things around the world."
Cohen still remains steadfastly bullish.
"The bull market is not over and the U.S. economic expansion is not over," she said. "This has been primarily a market event and not an economic event."
11/05 16:09 NYMEX oil ends below $14 on glut, Iraq "sideshow"
NEW YORK, Nov 5 - The December crude oil futures contract bobbed and weaved around $14 a barrel late Thursday before settling lower on the New York Mercantile Exchange, its strength zapped by a month-long inventory buildup, traders said.
News that the United Nations Security Council was expected to adopt a resolution later in the day that would condemn Iraq's decision to stop cooperation with U.N. weapons teams and demand an unconditional immediate reversal hardly stirrred the market, traders said.
The draft resolution does not authorize any military action. The United States and Britain, which threatened military action after Iraq announced its decision on Saturday, did not seek to get such language in the resolution.
"Iraq is like a sideshow. We keep an eye on it because of the outside chance something may happen, but really, traders are already jaded over this routine," said one NYMEX floor trader, who asked not to be named.
"Unless there's a threat to oil supply from the Gulf because of military action, the market will view prolonged rhetoric over Iraq's actions with cynicism," he said.
December crude settled at $13.97, down 17 cents. It hit a session high of $14.20, but came off quickly as buying momentum could not be sustained. In early trading, it dipped to an intraday low of $13.84, extending losses in overnight trading and in Brent crude trade in London.
December heating oil ended lower at 39.10 cents a gallon, off 0.29 cent. The contract traded between 38.80/39.70 cents a gallon.
December gasoline lost 0.56 cent at 42.80 cents a gallon, just above its session low 42.60 cents. Earlier, the contract had eked out a session high of 43.55 cents.
In London, December Brent crude on the International Petroleum Exchange ended at $12.51, breaking below its initial support level of $12.57 on market-on-close (MOC) selling. A key base support at $12.45 was untested.
At the NYMEX, traders said there was a push to test December crude's resistance at $14.25, but a soon as it hit $14.20, buying interest evaporated, a trader said.
"Whatever little upticks we had were due to locals (exchange members trading for their own accounts) buying on the dips," he added.
A report that U.S. refinery margins were likely to remain in negative territory added to bearish sentiment in refined products, another trader said.
U.S. Gulf Coast refiners, which account for around half of the country's total output, have in the first five days of November seen returns for processing benchmark West Texas Intermediate (WTI) crude flip to negative $0.17 per barrel from positive $0.38 in October, according to Reuters calculations based on standard product yields.
Nationwide, refinery margins or profits started to crumble in the last week of October, falling to $2.99 per barrel from the month's average of $3.04, according to Salomon Smith Barney analyst Paul Ting.
Margins were due for more pressure as the rest of planned autumn maintenance turnarounds are completed, including Chevron Corp.'s 295,000 bpd Pascagoula, Miss., refinery, restarts in November. The Chevron plant was flooded in late September when Hurricane Georges swept through the Gulf Coast, after hitting production platforms in the Gulf of Mexico and creating havoc in the Caribbean.
11/05 17:08 U.S. cash crude softens in sluggish session
NEW YORK, Nov 5 - U.S. cash crude oil differentials posted slight gains Thursday for the first time this week, but prices still finished lower alongside weaker futures.
In Thursday' session, LLS/St. James managed to recover several cents, trading at 45 and 43 cents below West Texas Intermediate/Cushing, the crude benchmark. Nevertheless, traders said that with light sweet crudes from Europe, West Africa, and Colombia steaming toward the Gulf Coast, the LLS/St. James market remained decidedly bearish.
"It's still extremely weak any way you slice it," said one trader Thursday, brushing off the slight rise in differentials.
Benchmark WTI/Cushing is also suffering from persistent concerns about oversupply, closing Thursday at just $14.00 a barrel. The losses mirrored those in the New York Mercantile Exchange futures market, where the December contract settled down 17 cents at $13.97 a barrel.
Focused for the moment on the glut, crude traders seemed to take little comfort from expectations that the United Nations Security Council will soon adopt a resolution condemning Iraq's decision to stop cooperation with weapons inspectors.
Meanwhile, cash traders said differentials for most other grades were steady to slightly stronger on Thursday.
Heavy Louisiana Sweet/Empire changed hands at 75 and 70 cents below WTI/Cushing, while Louisiana's Eugene Island was quoted by traders at between $1.45 and $1.40 under WTI/Cushing.
West Texas Intermediate/Midland and West Texas Sour/Midland were hovered around minus 33 cents and minus $1.70, respectively. WTS/Midland traded at $1.70, &1.69, and $1.68 a barrel.
U.S. traders added that the postings-plus market traded at $2.36 a barrel.
11/05 17:21 North Sea Brent slips a cent in late U.S. trading
NEW YORK, Nov 5 - North Sea Brent slipped a cent in late U.S. trading on Thursday, dealers said.
December Brent was valued at $12.50 a barrel in the U.S. aftermarket, down from a close of $12.51 earlier on the International Petroleum Exchange.
U.S. traders said two full cargoes of December cash Brent traded Thursday, one at $12.47 a barrel and the other at $12.54 a barrel. They said other deals during the session included 100 lots of December cash partial cargoes at $12.48, and 850 partial lots at $12.50 a barrel.
Traders said the Brent December-January spread traded twice at minus 31 cents and once at 30 cents.
11/05 17:36 U.S. foreign crude - Talk of Bonny heading to U.S.
NEW YORK, Nov 5 - The U.S. market for imported crudes was steady but with a weaker bias on Thursday, as traders lamented the oversupplied market, and in fact pointed to talk of additional imports on Thursday.
WEST AFRICAN, NORTH SEA
-- A U.S. refiner is reportedly looking into bringing a VLCC of Nigerian Bonny Light to the U.S. Gulf in early December, traders said. But reports are mixed as to the price of the light sweet crude. Some say Bonny is on offer at 40 cents under December WTI, while others say the price is closer to 80 cents under WTI.
Another trader is also said to be offering Bonny arriving in the December 1-5 window at a discount of 50 cents to December WTI, traders said.
In other talk, traders said Angolan Cabinda was also on offer for arrival December 10-20 at $1.35-1.30 under January WTI on a delivered basis.
-- North Sea Brent is also being actively offered into the U.S. Gulf, and there is talk that November-arriving barrels were sold at $1.05 under December WTI to a Gulf Coast refiner.
Several traders are said to be showing the Brent, as a wide trans-Atlantic arbitrage encourages players to take advantage of profits to be made from bringing the North Sea crude over to the U.S.
The arb widened yet further on Thursday, settling at $1.46 a barrel, adding to the incentive from cheap prices of prompt or Dated Brent, which traded at $1.04 under December Brent on Wednesday.
LATAM - VENEZUELA, COLOMBIA, ECUADOR, CHILE
-- Traders were still waiting for details about the latest tenders for four cargoes of Colombian light sweet Cusiana, for which bids were due on Wednesday. The cargoes are scheduled to load between December 8 and 22, and traders said on Thursday that bids put in to the Colombian state-owned oil company ranged between $1.49 and $1.70 under WTI.
Last week, Ecopetrol awarded three tenders for early December loading cargoes at differentials around $1.60-1.55 under WTI.
-- Traders said sour crudes were under quite a bit of pressure in the U.S. Gulf, partly as a result of Chevron's damaged 295,000 barrel per day refinery at Pascagoula, Miss. That pressure is apparent in cuts in both Saudi and Mexican official selling prices to the U.S., traders said.
-- Ecuador's sour crude Oriente is 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.
IRAQ
-- Traders said barrels of Iraqi sour crude Basrah Light are still amply offered into the U.S. Barrels arriving in the first half of December were on offer at January WTI minus $2.10, while second-half December barrels were offered at WTI minus $2.20.
TRINIDAD AND TOBAG0
-- A December 8-10 loading cargo of Trinidadian light, sweet Galeota Mix was on offer. The last price heard for the grade was an fob price of 75 cents under WTI for a prompt cargo, traders said.
11/05 18:14 U.S. spot products-Thin trade ahead of API meeting
NEW YORK, Nov 5 - Trade on the U.S. products cash market by late Thursday thinned out ahead of the American Petroleum Institute (API) conference at the weekend, trader said.
Differentials were steady from the morning with talk in the Northeast focusing on imported cargoes of gasoline, jet fuel and gas oil.
But New York Harbor differentials were steady, resisting the weaker lead from the Gulf Coast, where jet fuel slipped lower post-scheduling and motor gasoline was weaker on heavy selling.
NYMEX oil futures ended weaker as December crude settled at $13.97 per barrel, down 17 cents, December heating oil at 39.10 cents a gallon, off 0.29 cent and gasoline lost 0.56 cent at 42.80 cents a gallon.
A report that U.S. refinery margins were likely to remain in negative territory added to bearish sentiment in refined products, another trader said.
U.S. Gulf Coast refiners, which account for around half of the country's total output, have in the first five days of November seen returns for processing benchmark West Texas Intermediate (WTI) crude flip to negative $0.17 per barrel from positive $0.38 in October, according to Reuters calculations based on standard product yields.
Nationwide, refinery margins or profits started to crumble in the last week of October, falling to $2.99 per barrel from the month's average of $3.04, according to Salomon Smith Barney analyst Paul Ting.
Margins were due for more pressure as the rest of planned autumn maintenance turnarounds are completed, including Chevron Corp.'s 295,000 bpd Pascagoula, Miss., refinery, restarts in November.
NEW YORK HARBOR
Gasoline differentials ended unchanged to slightly softer on second half November supplies on aggressive offers, while jet fuel and diesel found some support despite talk of an Mideast and Russian cargoes on offer.
Talk was thin in the northeast ahead of the API conference, leaving cargo talk to dominate the markets.
Some traders earlier in the day said an influx of over 2.0 million barrels of gasoline arriving before November 20 was exerting pressure on differentials on in market with Nov. 17-20 arrival barrels of regular conventional M5-gasoline sold at 2.75 cents under the December print.
But other sources said later the deal was done at a 1.75 cent discount, more in line with market talk.
Other more bullish sources also said the arbitrage however for European grade gasoline was not attractive and any supplies slated to arrive have mostly been committed, including one sold to Canada.
Prompt M5 barges were pegged steady at a 0.25 cent discount and premium conventional V5 was pegged at a 1.75/2.00 cent regrade over the M5.
The reformulated grades were steady notionally, regular A5 at a 0.75/1.00 cent premium, A9 at a 1.50/1.75 cents premium, and premium grades D5 at 2.75/3.00 and D9 at 4.75/5.00 cents.
Diesel and jet fuel differentials found a floor to Wednesday's late 0.75 cent falls as buyers emerged, with prompt 54-grade traded at a 6.00 cents premium, and at 5.00 for supplies by Nov. 15. 55-grade was quoted at 6.50/6.75 cents.
Traders said a Mideast late Nov arrival cargo was on offer at 3.50 cents over the print, but said it did not make economical sense and did not think the offer was firm.
Low sulphur diesel also saw a little strength after shedding 0.40 cent in the previous day, pegged at 0.25 cent over the December screen, with heating oil No.2 steady at a 1.25/1.00 cent discount.
A second half Nov. arrival cargo of Russian gas oil was also offered at 1.50 below the screen, sources said.
GULF COAST
Gulf jet fuel Thursday continued to shed Wednesday's more than a penny scheduling gains amid an influx of material to the hub, traders said.
"Jet is dying a slow death," said one Gulf trader.
Jet 54 grade was pegged about a penny weaker on the day at 1.25/1.75 cents over the screen, while 55-grade was pegged 0.50 cent weaker at 2.50/2.85 over.
Regular gasoline front 32 cycle held losses and was pegged at 5.50/5.25 cent under the December screen.
Low sulphur diesel slipped 0.25 cent for front 32 cycle, and was pegged 1.40/1.20 cent under.
Heating oil held steady and was pegged at 2.60/2.40 under the screen for front 32 cycle material. It traded several times at 2.60 under the screen.
Premium V4 conventional gasoline was at a 2.80/3.00 cent regrade to the M4, the reformulated A4 rose about 0.20 cent to 2.40/2.20 cent regrade, and the premium D4 was at 0.75/0.50 cent under the screen.
MIDCONTINENT
Chicago low sulphur diesel differentials continued to hold strong on harvesting demand, traders said.
Chicago first cycle spiked about a penny and was pegged at 3.25/3.50 cents over, though nobody was buying it traders said, and second and third cycle, were pegged at 1.90/2.10 over.
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.
11/05 20:30 U.S West Coast ANS diffs unchanged again Thursday
LOS ANGELES, Nov 5 - U.S. West Coast Alaskan crude oil differentials were steady Thursday while absolute prices fell with broadly lower markets.
Trade was quiet for the fourth-straight day this week, as dealers assessed their needs for December and prepared for an industry conference in San Francisco on Monday.
The last cargo of Alaska North Slope (ANS) crude sold at the discount of $1.37 a barrel under December West Texas Intermediate/Cushing on October 28.
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.
With the ANS discount flat, pure ANS prices fell with cash crude oil, which settled about 17 cents a barrel lower in daytime trade.
The notional price for West Coast ANS fell to $12.47/12.64 a barrel from $12.64/12.80.
West Coast spot crude markets were idle for other grades.
11/05 21:13 ACCESS U.S crude futures slip on continuing glut
LOS ANGELES, Nov 5 - U.S. December crude oil futures prices slipped Thursday in the ACCESS after-hours market, driven lower by a long-term oil glut.
No fresh news emerged in the after-hours market following a downturn for daytime prices.
The American Petroleum Institute (API) on Tuesday released weekly inventory numbers Tuesday that showed an 8 million barrel rise in U.S. crude oil stocks, a 3.2 million barrel rise in unleaded gasoline stocks, and distillate stocks that fell by 946,000 barrels.
Petroleum products and crude oil settled lower on the New York Mercantile Exchange (NYMEX) Thursday, as traders ignored a dispute between the U.N. and Iraq that could possibly disrupt U.N.-monitored exports from the key producing nation.
December crude oil traded at $13.86 a barrel in after-hours trade on ACCESS, down 11 cents a barrel from its NYMEX close where it finished 17 cents a barrel lower amid high stockpiles and no news to spark fears of shortages.
Crude futures volume was a light 1,373 lots for all months and 1,032 lots for December on ACCESS.
December unleaded gasoline traded 42.65 cent a gallon on ACCESS, down 0.15 cent with 154 lots exchanged for all months and 146 the front month.
December heating oil traded 48 lots total. The contract fell 0.10 cent a gallon to 39 cents on ACCESS.
Oil Charts
IPE BRENT
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NYMEX LIGHT SWEET CRUDE
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NYMEX HEATING OIL
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NYMEX UNLEADED GASOLINE
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OIL INDUSTRY COMBINED GRAPH
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