NEWS

[OIL PRICES] OPEC Leader Khelil Says Dollar Will Drive Oil to $170

2008-06-29T23:55:00.002+02:00

Organization of Petroleum Exporting Countries President Chakib Khelil predicted that the price of oil will climb to $170 a barrel before the end of the year, citing the dollar's decline and political conflicts.

``Oil prices are expected to reach $170 as demand for fuel is growing in the U.S. during the summer period and the dollar continues to weaken against the euro,'' Khelil said today in a telephone interview. The leader of the Organization of Petroleum Exporting Countries also serves as Algeria's oil minister.

Political pressure on Iran and the depreciation of the U.S. currency have caused a surge in oil prices, Khelil said. New York- traded crude has more than doubled in a year and touched a record $142.99 a barrel yesterday on the New York Mercantile Exchange.

Organization of Petroleum Exporting Countries ministers generally say that oil output is sufficient, even as Saudi Arabia, the biggest producer, pledged to pump an extra 200,000 barrels a day next month to calm the market. ``The market is completely supplied,'' Venezuelan Oil Minister Rafael Ramirez said yesterday. Libya announced possible production cuts, calling the market oversupplied.

The rising cost of crude is not linked to supply, Khelil said today. ``There is more than enough oil in the market to meet the international demand,'' added the Organization of Petroleum Exporting Countries president, who will take part June 30 in an international energy forum in Madrid.

Prices, which are up 38 percent this quarter, are heading for the biggest quarterly gain since the first three months of 1999, when oil traded between $11 and $17.

Declining Dollar

``The decisions made by the U.S. Federal Reserve and the European Central Bank helped the devaluation of the dollar, which pushed up oil prices,'' Khelil said.

Oil may extend gains if the European Central Bank boosts rates on July 3, further weakening the U.S. currency. The dollar has declined 15 percent against the euro in 12 months.

European Central Bank President Jean-Claude Trichet reiterated June 25 that policy makers may increase the main refinancing rate by a quarter-percentage point next month to contain inflation. The Federal Reserve left the benchmark U.S. rate at 2 percent on June 25. On Sept. 18 the Fed began cutting rates to bolster an economy already reeling from the credit crisis.

Source: Bloomberg|By Ahmed Rouaba

[ASIA] Hong Kong govt plans to scrap fuel tax for public transport

2008-06-24T23:05:00.001+02:00

Hong Kong's government announced on Monday a plan to waive fuel taxes for public and commercial transport, following days of demonstrations by truck and bus drivers over surging oil prices.

The authorities hoped to get an approval from the legislature on scrapping taxes on Euro-five diesel by the end of next month, secretary for transport Eva Cheng told the city's lawmakers Monday. The environmentally friendly Euro-five is used by public transport vehicles such as buses, taxis and trucks.

"Our decision is based on the principle of fairness. At present, all fuel taxes for sea and air commercial transport have been waived," she said.

But there would be no change to the levies on the more polluting ultra-low sulphur diesel or petrol, commonly used in private cars, she said.

Prices for petrol, at about 2 US dollars a litre, were generally higher than Euro-five diesel to encourage people to use public transport, a government spokesman told AFP. Mirroring the action of their European counterparts, Hong Kong drivers staged marches and slow-drive protests earlier this month as their earnings were substantially reduced by surging oil prices.

Source: Agence France-Presse

[ASIA] China stresses price stability after fuel hikes

2008-06-24T22:28:00.002+02:00

China's top economic planner has urged local authorities to ensure goods prices remain stable after the government hiked fuel prices by as much as 18 percent.

The National Development and Reform Commission said in a statement on its website that local officials should closely monitor liquefied petroleum gas and natural gas, whose prices were not increased.

Local governments should also encourage producers to cut their costs rather than pass on rising prices to consumers, according to the statement, which was posted over the weekend.

Inflation has emerged as a top policy concern in Beijing, with increases in the consumer price index near 12-year highs.

China's inflation rate was 7.7 percent in May, easing only slightly from April's 8.5 percent, according to previously released data.

Analysts have said they expect manufacturers will be able to absorb the higher fuel costs in the short term.

Public transport fares including for buses, taxis and the railway should not be raised for the time being, and more subsidies should be allocated to taxis to cover losses incurred from rising fuel costs, the statement said.

Beijing announced retail petrol and diesel price hikes on Thursday as it seeks to close the gap between state-set domestic caps and soaring world oil costs. China's oil giants saw little incentive to increase production to meet surging demand as they were said to be selling refined products at a loss, although it remains unclear if the price hikes have put them in the black.

But economists said the hikes should prevent shortages as the country prepares to host the Olympics in August.

Source: Agence France-Presse

[UNITED STATES] Oil Rises on Dollar's Drop, Mideast Tensions. U.S. Commodities

2008-06-21T13:47:00.003+02:00

Crude oil rose as the weaker dollar enhanced the appeal of commodities as a currency hedge and the New York Times reported that Israel held a rehearsal for a potential bombing attack on nuclear targets in Iran.

Oil prices have almost doubled in the past year as investors sought refuge from a declining dollar, which fell again today after traders pared bets the Federal Reserve will raise interest rates on June 25. Iran, OPEC's second-biggest oil producer, would respond to an Israeli attack with a ``heavy blow,'' a senior cleric said.

``The only way to increase the value of the dollar is by increasing interest rates, which doesn't look likely,'' said Nauman Barakat, a senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``The simulated attack of Iran by Israeli warplanes is certainly not going to reduce geopolitical tensions.''

In other markets, coffee jumped the most in nine months on reduced shipments from Brazil, the biggest grower. Cattle also climbed. The UBS Bloomberg Constant Maturity Commodity Index gained 18.63 to 1,655.50 after reaching a record 1,668.25.

Crude oil for July delivery rose $2.69, or 2 percent, to $134.62 a barrel on the New York Mercantile Exchange. Prices declined 24 cents this week. Futures climbed to a record $139.89 on June 16.

Coffee
In the first 19 days of June, Brazil's exports of arabica beans, the main variety traded in New York, fell 10 percent to 871,402 bags from the same period in May, according to the country's Coffee Exporters Council.

``The coffee beans haven't been flowing,'' said Boyd Cruel, an analyst with Alaron Trading in Chicago. A lack of selling is supporting prices, he said.

Coffee futures for September delivery rose 7.05 cents, or 5.1 percent, to $1.467 a pound on ICE Futures U.S., the former New York Board of Trade. The percentage gain was the biggest since Sept. 17. Earlier, the price reached $1.485, the highest for a most-active contract since March 17. Coffee gained 7.2 percent this week and 25 percent in the past year.

Cattle
Cattle rose to the highest since at least 1986 as U.S. beef prices surged and high corn costs prolong losses for feedlots, encouraging some producers to shrink their herds.

Wholesale beef prices are the highest in 13 months, and domestic shipments of select and choice cuts yesterday totaled 14.9 million pounds, the most since Jan. 24, U.S. Department of Agriculture data show. Feedlot operators cut purchases of young cattle by 12 percent in May from a year earlier, the agency said after markets closed. Analysts projected a 8.9 percent drop.

``When grain prices are this high, the cattle should be staying out in the pasture,'' said Mark Schultz, a vice president at Northstar Commodity Investments LLC in Minneapolis. Livestock producers will ``try to keep them in the pasture longer, to feed them less corn,'' he said.

Cattle futures for August delivery rose 1.4 cents, or 1.4 percent, to $1.0485 a pound on the Chicago Mercantile Exchange, after earlier reaching $1.0615, the highest for a most-active contract since at least April 1986.

Commodities settled as follows:
Precious metals: August gold down 50 cents to $903.70 an ounce July silver down 7.3 cents to $17.397 an ounce July platinum up $6.60 to $2,062.40 an ounce September palladium unchanged at $479.20 an ounce

Livestock: August live cattle up 1.4 cents to $1.0485 a pound August feeder cattle up 2.475 cents to $1.13575 a pound August lean hogs up 2.925 cents to 78.375 cents a pound July pork bellies up 0.775 cent to 72.95 cents a pound

Grains: November soybeans down 12.5 cents to $15.09 a bushel December corn down 6 cents to $7.555 a bushel September wheat down 14.5 cents to $8.8425 a bushel December oats up 3.25 cents to $4.4525 a bushel

Food and Fiber: September coffee up 7.05 cents to $1.467 a pound September cocoa up $19 to $3,125 a metric ton December cotton up 0.04 cent to 80.11 cents a pound October sugar up 0.37 cent to 13.08 cents a pound September orange juice up 2.25 cents to $1.131 a pound

Energy: July crude oil up $2.69 to $134.62 a barrel July natural gas up 13.3 cents to $12.994 per million British thermal units July heating oil up 5.82 cents to $3.7717 a gallon July gasoline up 8.66 cents to $3.4392 a gallon

Others: September copper up 5.25 cents to $3.8305 a pound September lumber down $4.40 to $263.00 per 1,000 board feet.

Source: Bloomberg|By Mark Shenk

[OIL PRICES] Crude Oil Declines as China to Increase Fuel Prices Tomorrow

2008-06-19T18:21:00.003+02:00

Crude oil fell more than $4 a barrel on speculation demand will decline, after China said it will raise fuel prices starting tomorrow.

China, the second-biggest fuel consumer after the U.S., will increase gasoline and diesel prices by 1,000 yuan ($145.50) a ton, the National Development and Reform Commission said. The increases represent a 17 percent gain for gasoline and 18 percent for diesel. Oil has almost doubled in the past year, partially because of growing demand from China.

``The announcement of the Chinese fuel price increase sent the market sharply lower,'' said Michael Fitzpatrick, vice president for energy risk management at MF Global Ltd. in New York. ``This should have a big impact on demand.''

Crude oil for July delivery fell $4.10, or 3 percent, to $132.58 a barrel at 12:15 p.m. on the New York Mercantile Exchange. Futures climbed to a record $139.89 on June 16. Prices are 94 percent higher than a year ago.

Brent crude oil for August settlement declined $3.13, or 2.3 percent, to $133.31 a barrel on London's ICE Futures Europe exchange. Prices climbed to a record $139.32 on June 16.

China will also raise jet-fuel prices by 1,500 yuan a ton, or 25 percent, tomorrow, the top policy planner said. On July 1, China will increase electricity prices by an average 0.025 yuan a kilowatt-hour, or 4.7 percent. China will impose temporary caps on thermo-coal prices until the end of this year.

The government is considering a so-called environmental tax, a new levy on auto fuels and changes to existing taxes on natural-resource use, Fu Jing, deputy director of policy and legislation at the State Administration of Taxation, said at the Energy Efficiency Asia conference in Beijing today.

Developing Countries
``The developing countries, in particular China, have been driving demand growth,'' said Eric Wittenauer, an analyst at Wachovia Securities in St. Louis. ``Subsidies and price caps insulate consumers from the full impact of higher prices. By rolling them back, some of the insulation is reduced and we can expect to see a demand response.''

Oil demand will fall 240,000 barrels to 48.71 million barrels a day among the 30-member Organization for Economic Cooperation and Development, the U.S. Energy Department said in a report on June 10. The OECD doesn't include developing countries such as China.

Chinese consumption is expected to rise 440,000 barrels to an average 8.02 million barrels a day this year, according to the report.

India, Malaysia, Indonesia and Taiwan have increased fuel prices and reduced subsidies this year, a move that may cut Asian demand and slow global oil-consumption growth.

Oil rallied for the first time in four days yesterday as U.S. President George W. Bush said he doesn't expect pledges of higher supplies to emerge from a June 22 meeting of producers and consumers in Jeddah, Saudi Arabia. Prices also rose because a government report showed that U.S. crude-oil inventories fell for a fifth week.

Source: Bloomberg|By Mark Shenk

[OIL PRICES] Markets ignore Saudi oil concession

2008-06-17T23:29:00.001+02:00

Saudi Arabia's offer of a further increase in production to halt the oil price spiral failed to have any impact yesterday on markets more preoccupied with the shutdown of a North Sea oil and gas field, the weakness of the dollar and the renewed surge in product prices.

Futures contracts in New York hit a new intra-day peak of $139.89 a barrel at one stage, before closing down 25 cents at $134.61, while North Sea Brent jumped more than $2.40 to $137.52 in London, on the back of the Statoil decision to cut output from the Oseberg field by 150,000 barrels a day follow

More on oil

Sterling jumped to its highest level for two weeks on a trade weighted basis in anticipation that the Bank of England's Monetary Policy Committee will be pressured into increasing interest rates because of inflation worries, while the dollar continued to lose ground against the euro.

Figures out today are expected to show consumer price inflation in Britain is running at an annual rate of 3.1pc, well above the 2pc target level agreed with government. Mervyn King, Governor of the Bank, will have to write what analysts feel will be first of a series of letters to the Chancellor explaining why the target has been missed.

Saudi Arabia's decision to increase production by another 500,000 barrels a day followed a meeting with Ban Ki-moon, the United Nations secretary-general, in Jeddah. The increase, the second in a month, will push Saudi output to 9.7m daily barrels and comes as Saudi prepares for a meeting of oil producers and consumer governments in Jeddah to try to put a brake on rising prices.

Malcolm Wicks, energy minister, welcomed the Saudi decision but failed to get the United Arab Emirates to follow suit.

Source: The Telegraph|By Roland Gribben

[OIL PRICES] Oil hits new all-time high

2008-06-16T16:13:00.003+02:00

The oil price spiralled to a new all-time high today of almost $140 a barrel after worse-than-expected manufacturing data for the world's biggest economy weakened the dollar.
A barrel of US crude for delivery in July hit $139.89 in US trading, breaking through the previous high of $139.12 set last week. The sharp rise startled traders, who had expected the promise of increase production from Saudi Arabia to keep a lid on the oil price.

Brent crude also hit a record high today, touching $139.32 a barrel. The jump was sparked by the latest New York State manufacturing index, which fell for the fourth time in five months. This pushed the US currency down against other major currencies, affecting the oil price, which is quoted in dollars. Oil has more than doubled in value in the last year, driven by rising demand, weakness in the dollar and traders betting that the price will keep rising. This has pushed up motoring costs for business and consumers, fuelling inflation fears.

This has caused blockades in Spain, and protests in South America and Indonesia. In the UK, drivers have also been hit by the ongoing strike action between Shell and hundreds of its drivers.

Saudi Arabia is OPEC's largest oil producer, and yesterday it tried to take some of the heat out of rising fuel prices with plans to increase production next month. The Saudi move followed a weekend of talks between the UN secretary general, Ban Ki-moon; the Saudi ruler, King Abdullah, and the country's oil minister Ali al-Naimi.

Source: The Guardian| by Graeme Wearden

[INDIA] Refined soya oil prices rise by Rs 10 a litre

2008-06-15T15:20:00.002+02:00

Retail prices of refined soya oil, which fell sharply after removal of import duty on crude soya oil, have soared by about Rs 10 a litre in the national capital due to tight domestic supply and rising global prices.

"Retail prices have gone up by Rs 10 a litre in domestic market during last two months," Adani Wilmar Assistant Vice President (Sales and Marketing) Angshu Mallick said.

He said the company had raised the price of its fortune refined soya oil to Rs 73 a litre. Fortune is the largest selling brand of refined soya oil in India. Fortune refined soya oil had skyrocketed to about Rs 80 a litre in March at the retail market here.

Prices fell to Rs 63 a litre in April after government removed custom duty on crude soya oil on March 31 as part of its measures to control rising inflation.

When asked about the reason, Mallick said: "There is extreme shortage of local crop in India. Soya bean is almost finished and there is no stock. Whatever is available, the prices are higher than the imported oil prices."

Besides, he said the international prices of crude soya oil have gone up sharply because of rise in crude oil prices.

"The soyabean oil prices have gone up to 1,430 dollar a tonne from 1,200 dollar a tonne in the international market from April," Mallick pointed out.

The market is bullish because of crude oil prices and "edible oil prices is likely to go up further", he said.

Solvent Extractors Association of India (SEA) Executive Director B V Mehta noted that Indian market moves in tandem with global markets where prices have gone up by 50 dollars in last one week only. India imports more than 40 per cent of its requirement of edible oils.

Source: Indian Economic Times

[OIL PRICES] London exchange ICE may limit oil trades

2008-06-15T07:52:00.001+02:00

Intercontinental Exchange may be forced to limit the size of U.S. oil trades on its London energy market, U.S. Commodity Futures Trading Commissioner Bart Chilton said Friday.

Intercontinental, known as ICE, controls about one-fourth of the trading of U.S. West Texas Intermediate oil futures, with the New York Mercantile Exchange handling the remainder. ICE's London market operates without trading limits and is allowed to offer U.S. investors access to its U.K. exchange under a no-action letter from the CFTC. The letter may be revised to have ICE adopt trade limits imposed by Nymex, Chilton said.

"The issue is manipulation of oil prices," Chilton said. "It's critical we have as comprehensive as possible a view of all trading position in WTI."

The energy exchange's regulator, the U.K.'s Financial Services Authority, does not set limits on contracts held by investors on its London exchange, meaning those traders can build larger trades in U.S. oil than rivals on the Nymex, which sets limits. The position limits are aimed at reducing the ability of traders to influence prices near the expiration of futures contracts.

Source: Bloomberg

[OIL PRICES] The prices above $138

2008-06-10T00:34:00.001+02:00

Oil prices had their biggest gains ever jumping nearly $11 to a new record above $138 a barrel after the dollar fell sharply against the euro. The unprecedented gains on Friday capped a second day of strong gains on energy markets, and fueled suspicions that commodities might be caught in a speculative bubble.

Oil futures surged $10.75, or 8 percent, to $138.54 a barrel on the New York Mercantile Exchange. The record gain followed a jump of 5.5 percent on Thursday, bringing total two-day gains to $16 a barrel.

Stocks fell sharply. The Dow Jones industrials fell 394.64 points, or 3.1 percent, to close at 12,209.81. The S&P 500 Index plunged 43.37, or 3.1 percent, to 1,360.68, and the Nasdaq composite index sank 75.38 to 2,474.56. Chevron Corp. was the only stock that rose on the blue-chip index.

The latest jump in oil prices also came amid bleak economic news that fanned recession fears on Friday. The unemployment rate surged to 5.5 percent last month, the government said, the biggest increase in more than two decades.

Investors reacted to the latest forecast by a large Wall Street bank that oil prices would spike to $150 a barrel in the next month because of strong demand from Asian economies. Analysts said that the threat of a strike by Chevron's workers in Nigeria could lead to "considerable" shutdowns of Nigerian production.

A similar strike by Exxon Mobil workers last April, which lasted a week, reduced Nigerian output by 800,000 barrels a day, or nearly a third of the country's daily exports.

Source: Islamic Republic News Agency

[OIL PRICES] Oil rules over $128 on natural gas rally

2008-06-03T05:06:00.003+02:00

Oil rebounded from early lows to stand near $128 a barrel on Monday, as a rally in natural gas and refined oil products helped outweigh demand concerns and a firmer dollar.

At the time to print, US light, sweet crude oil futures rose $1.05 to $128.40 a barrel, off session lows of $125.22. London Brent rose 69 cents to $128.47 a barrel. Traders said the recovery in crude was led by gas, heating oil and gasoline. Investors, especially speculators, with oversold positions were also coming back into the market, they said.

Nymex natural gas futures was nearly 4% higher, while heating oil and gasoline were up nearly 1.5% and 1.3% higher. Oil fell nearly $5 lower last week as investors booked profits after rallying to a record high above $135.

The recovery in crude came despite a firmer dollar, which edged up against the euro on Monday after a survey showed stronger-than-expected US manufacturing activity in May.

The dollar has rebounded against the euro on the prospect of the Federal Reserve eventually lifting rates. The dollar scored back-to-back monthly gains against the euro in April and May for the first time since early 2007.

Oil fell more than $2 earlier in the session as an Iraqi official said the country expected to boost oil exports this month to a new post-war high of about 2.2 million barrels per day (bpd) — about 130,000 barrels a day higher than in May.

Oil prices hit an all-time high of $135.09 a barrel on May 22, boosted by rising flows of cash from investors and concerns supplies will struggle to match demand longer term, but a series of fuel price hikes across Asia and protests in Europe last week has shifted focus to the potential for weakening consumption.

Demand in consuming nations such as the US and the UK has already showed signs of faltering under the weight of rising fuel costs, and some analysts are concerned demand in some Asian countries could be hit as governments cut subsidies.

While the world’s number-two consumer China is resisting raising prices until after the August Olympics, other countries including Taiwan, Indonesia and Sri Lanka have been forced to hike pump rates as governments struggle to fund subsidies. India is expected to raise prices slightly this week and Malaysia may make a similar move.

Oil traders are also bracing for the possibility of more market surveillance by US regulators, under political pressure to stem the rise in prices, a move they fear may shake some speculators out of the market.

Speculators cut their net long positions in crude oil to 25,867 in the week to May 27, down from 50,060 in the previous week, data released by the US Commodity Futures Trading Commission (CFTC) showed last week. The CFTC said last week that it was investigating oil-market trading.

Source: Reuters

[OIL PRICES] The Oil price profiteering to be curbed at ICE Futures Europe and New York Mercantile Exchange

2008-05-31T21:56:00.002+02:00

Two of the world's largest energy exchanges have forced traders to deposit significantly more money when investing to curb volatility in energy markets and drive out speculators.

The exchanges and related clearing houses have found themselves at the centre of the growing storm over claims that speculators have been behind the recent rise in oil prices to record levels.

The New York Mercantile Exchange (Nymex) and ICE Futures Europe in London, the former International Petroleum Exchange, have now tripled "margin calls" for some contracts.

They hope the increased margin calls will reduce volatility and force out some of the more speculative players. Nymex has announced a threefold increase in margin calls for long-dated Brent crude futures in New York. As a result margin calls on some contracts will jump from $100 to $300 for clearing members.

On more popular contracts, such as Brent for one-month delivery, the margin call will rise by 12.5pc to $450 for clearing members.

For investors with sizeable positions, the increase could mean the difference between a profit and a loss and appears to have already forced some speculative traders to close their positions.

The move, introduced by ICE earlier in the week and followed by Nymex yesterday, has coincided with a fall in the price of oil by around $7 a barrel from last week's record high of more than $135. In London yesterday, a barrel of Brent crude for July delivery was up 88 cents at $127.77 in late trading. In New York, a barrel of sweet crude was up $1.34 at $127.96.

Rob Laughlin, senior energy broker for MF Global in London, said that, as a result of the increases, many "smaller speculators have finally taken their money and run". However, Walter Lukken, acting chairman of the US Commodities Futures Trading Commission, yesterday dismissed the idea that raising margin calls would help long- term, saying it would just force speculators to go elsewhere.

A spokesman for New York Mercantile Exchange would not explain why the margin calls had been raised, except to say that the calls are based on a formula linked to volume and volatility and are assessed on a daily basis.

The ICE in London, where the contracts are cleared by LCH. Clearnet, has also increased margin calls - for a "lot" of Brent crude, for example, the initial margin call has risen by a third to $10,000.

LCH.Clearnet said the margin call was raised because of "a change in the nature of the volatility across the oil curves".Lehman Bros' chief energy economist Edward Morse blamed the spike in oil prices on Wall Street analysts repeatedly raising their forecasts. The investment bank described the price rise as a repeat of the dotcom bubble of the late 1990s.

In a research note, entitled "Oil dotcom", Mr Morse and Lehman's fixed income and commodities research team argue that the ratcheting up of forecasts for oil is partly to blame for the recent increase.

"Fundamental changes cannot explain sudden, severe price or curve movements," wrote Mr Morse. "As in the dotcom period, when "new economy" stocks became popular, a growing number of Wall Street analysts have been repeatedly raising their forecasts as oil prices have risen."

Source: The Telegraph|By James Quinn

[OIL PRICES] Crude breaks the $130 a barrel level

2008-05-21T19:22:00.000+02:00

Crude-oil futures topped the $130-a-barrel mark for the first time on Wednesday ahead of a weekly report on energy inventories, continuing this month's ascent on the back of supply worries and bullish commentaries. July light sweet crude recently traded up $1.40 to $130.38 a barrel.

Source: MarketWatch|By Steve Goldstein

[MIDDLE EAST] Oil production meets demand. Saudi Arabia

2008-05-20T13:22:00.002+02:00

The current level of oil production is fulfilling market demand, Saudi Arabia's Oil Minister Ali Al-Naimi said in remarks carried by the state news agency.

"Saudi Arabia is permanently seeking to take into consideration the interest of consumers and producers and to achieve a balance between supply and demand," SPA quoted Ali Al-Naimi as saying at a cabinet meeting chaired by King Abdullah.

"The kingdom sees that quantities produced at the present time fulfil the market needs ... and that the production capacity can meet any additional and real energy needs," he added.

Saudi Arabia, the world's largest oil exporter and the Organization of the Petroleum Exporting Countries' most influential member, said on Friday it had raised output by 300,000 barrels per day.

Al-Naimi announced the increase while US President George W. Bush was visiting Riyadh.

Bush said on Saturday that he was pleased with the Saudi decision to boost output but that it was insufficient to solve problems in the world's largest energy consumer.

High oil prices are weighing on a US economy already hit hard by a housing slump and credit crisis.

Source: Reuters

[UNITED STATES] Oil prices gain while pump prices rise to new high

2008-05-19T18:05:00.004+02:00

Oil futures crept higher Monday while retail gas and diesel prices reached new records, adding to the pressure on drivers planning road trips for the coming holiday weekend.

Americans are now paying an average of $3.79 for a gallon of regular gas, according to a survey by AAA and the Oil Price Information Service. Diesel now costs $4.52 a gallon.

Drivers in some parts of the country are paying considerably more, however. Gas pump prices in parts of California, where the average is down to $3.96, have been stuck above $4 a gallon for weeks now. Prices in Alaska and Connecticut are averaging just above $4 a gallon statewide.

A report released Sunday showed pump prices topped an average $4 a gallon for the first time in two metropolitan areas: Chicago and New York's Long Island. The Lundberg Survey of 7,000 stations nationwide found the cheapest city to be Tucson, Ariz., where a gallon of regular sold for $3.48 on average. Pump prices may have further to go still, pressured by rising oil costs and a refinery shutdown.

Light, sweet crude for June delivery rose 33 cents to $126.62 a barrel on the New York Mercantile Exchange on Monday. Prices surged to a trading record near $128 a barrel Friday, but did not set a new closing high.

Crude was likely sent higher in part by a news report quoting Organization of Petroleum Exporting Countries President Chakib Khelil as saying OPEC won't increase production before its next meeting Sept. 9.

"There's a perception that demand is going to hold up pretty strongly this year," said Mark Pervan, senior commodity strategist at Australia & New Zealand Bank in Melbourne. "This idea that the market just couldn't handle $100 oil has just gone out the window, so there's a parallel shift at where the market will trade."

Holly Corp. said a key unit at its New Mexico refinery is down for repairs, cutting estimated gasoline production in May by as much as 756,000 gallons. The shutdown of the fluid catalytic cracking unit occurred while the unit was being brought back online from a previous shutdown on May 7.

Holly's Navajo Refinery in Artesia, N.M. is the refiner's largest facility.

With crude extending its advance, analysts warned of the negative impact for the world's greatest consumer, the U.S.

"The ongoing upward trend in crude prices is going to ensure that the U.S. economy remains under pressure," said James Hughes, an analyst at CMC Markets in London.

In other Nymex trading, heating oil futures were nearly flat at $3.7020 a gallon. Gasoline futures rose 0.61 cents to $3.2296 a gallon. Natural gas futures rose 9.4 cents to $11.188 per 1,000 cubic feet. July Brent crude rose 8 cents to $125.07 a barrel on the ICE Futures exchange in London.

Source: Yahoo News/ Associated Press| By ADAM SCHRECK

[OPEC] Organization of Petroleum Exporting Countries crude output increase ruled out

2008-05-18T07:16:00.004+02:00

Iran's oil minister yesterday rejected any idea of Organization of Petroleum Exporting Countries raising production, saying it would fail to ease record prices as the market was already "saturated" with oil. Gholamhossein Nozari also dismissed as a "political move" Saudi Arabia's announcement on Friday of a modest hike in output after an appeal from visiting US President George Walter Bush.

"No, the market is saturated with oil and a hike in production does not have an impact on the price," Nozari told reporters when asked whether the Organization of Petroleum Exporting Countries would increase production.

Oil prices have risen six-fold since 2002 and doubled since last year as rising demand from China and other developing nations cinched spare production capacity, adding pressure on the US economy already hard hit by a housing slump.

Organization of Petroleum Exporting Countries's smallest producer, Ecuador, said on Friday that members should consider raising output to stem the oil rally because high prices are hurting the poor.

But Iran, Organization of Petroleum Exporting Countries's second-largest producer after Saudi Arabia, says the market is well-supplied with oil and blames the price rise on a weak US dollar, speculation and other factors outside the control of the 13-member cartel.

Oil shot to a record high near $128 a barrel on Friday as a bullish price forecast from investment bank Goldman Sachs drowned out the offer of more supply from Saudi Arabia.

George Walter Bush said yesterday he was pleased with a boost in Saudi oil output but it did not solve problems in the US.

Asked whether he was satisfied with the Saudi oil output boost, Bush said King Abdullah summoned his energy minister. "It's something but it doesn't solve our problem," Bush said. "Our problem in America gets solved if we expand our refining capacity, promote nuclear energy and continue our strategy for the advancement of alternative energies."

Source: Gulf Daily News

[RUSSIA] Oil Tax Pledge Buoys Markets

2008-05-18T03:15:00.004+02:00

Markets surged after the swearing-in of Dmitry Medvedev as president in a pomp-filled ceremony Wednesday and a tax-cutting speech by Vladimir Putin the day after, when he was approved as prime minister.

The RTS, Russia's benchmark index, rose 2 percent Wednesday, the day of the inauguration, while the MICEX Index fared a little better, increasing by 2.7 percent.

Oil stocks were buoyed by Putin's announcement Thursday that taxes on oil exploration would be cut significantly, pushing LUKoil up 6.4 percent and Rosneft up 6.7 percent on the day.

The RTS closed Thursday, the last day of trading before the Victory Day national holiday, up by 7.6 percent to 2283.99 points, while MICEX, where most trading takes place, rose 7.7 percent to 1795.67 points.

The RTS Oil & Gas Index rose 9.2 percent over the four days of trading, and in London on Friday Gazprom added 3.4 percent, LUKoil 4 percent and Rosneft 3 percent.

While Russia has been caught up in the maelstrom of the global financial crisis, which has sent global markets tumbling since the beginning of the year, analysts have noted large inflows into Russia-focused funds over the same period.

The MSCI Russia Index outperformed the global emerging-market index by 10.5 percent over the week and, having lagged behind the global benchmark in the year to date, it is now outperforming by almost 4 percent. According to EPFR Global, a total of $1.4 billion has been invested into Russia funds so far this year, compared with an outflow of $5.2 billion from China funds and a loss of $455 million from India funds.

Yet Russian markets still appear undervalued, as Bloomberg noted that stocks on the RTS are currently trading at an average of 9.52 times earnings, making it the worst-performing stock market among Europe's 10 largest.

Investors said one reason for this was that the Russian market was dominated by oil stocks, which typically have lower price-to-earning ratios than manufacturing or consumer stocks. Added to that, some investors have still shied away from the market in light of the political changeover.

"There has been a bit of a misunderstanding about what the transfer of power means in Russia," said James Fenkner, a director at Red Star Asset Management. "There has been a lot of pessimism in Russia, too, and we have seen big Russian sellers of Gazprom. This has lifted over the last couple of days."

The week's double coronation sparked a spurt of market activity in what has otherwise been a quiet couple of weeks, with many Russian-based buyers and sellers out of town for the traditional May vacation.

For the first time since January, the RTS was back above 2,200 points, led by the metals and mining sector. Coal firm Raspadaskaya attracted interest on the news that it planned to list Global Depositary Receipts in London, while steel companies Severstal and NLMK soared on Lehman Brothers coverage and high steel prices.

Oil prices hit another record high, soaring well above $120 per barrel, buoying oil stocks. Big names such as Gazprom and LUKoil did well, but investors were wary to place bets that it's a real recovery.

The recovery, said Fenkner, is "very specific." "Oil and metals have completely recovered, but what hasn't quite recovered is everything else."

"Telecoms are in the gutter, and retails are also doing pretty poorly," he said. Unified Energy Systems, which is to be broken up shortly, has started to climb back over the last two weeks after a sell-off, closing Thursday at $1.06 per share.

Unified Energy Systems, is "very cheap," said Alexander Kotikov, a utilities analyst at Troika Dialog. When Unified Energy Systems, is de-listed on Jun. 6, shareholders will receive holdings in a basket of 23 different companies, ranging from generating firms to transmission entities, in return for their UES shares.

Analysts have valuations for the majority of the basket of stocks, and UES is trading at a "deep discount" to that basket, Kotikov said.

"It represented a fantastic arbitrage opportunity, and still does," he said.

Source: The Moscow Times|By Catrina Stewart

[OIL PRICES] The prices must be controlled. Gordon Brown

2008-05-16T08:19:00.003+02:00

The British Primier Minister Gordon Brown blamed global factors, especially record oil prices, for the economic slowdown and rising inflation in Britain during a series of major interviews Thursday.

Speaking on BBC Radio Four's Today programme, Brown called for oil prices to be controlled and said that pressure must be put on OPEC to increase production.

OPEC was responsible for about 40 percent of the world's production and it is clear they should be raising their targets, he later said at his monthly press conference. The British premier said that he wanted OPEC to consider increasing their quotas, arguing that he believed its members had the capacity to do so.

They need to act to convince people demand can be met, he told domestic and foreign journalists. The supply of oil to meet demand was important not just now but in the future.

Brown also said that the rest of the international community need also to look at what can be done to bring down record oil prices of over 120 dollars per barrels, mentioning that there were other causes for the spike like geopolitics and speculators.

Under pressure from criticism about his own performance, the prime minister carried out four substantial interviews Thursday morning as well as hold his press conference at midday.

This was in addition to answering parliamentary questions on Wednesday. Defending questions on whether he would resign, he insisted that he had the best experience, including 10 years as Chancellor of the Exchequer, to carry on the job.

The reason the economy is going wrong is "international factors that we have had to deal with and I am probably best placed to deal with these issues because of what I know about dealing with other countries on oil and other issues," Brown said.

"Of course, there are many people that can take over, but I think I can help steer this economy through difficult times and make sure we do the best by Britain in difficult world circumstances," he told the BBC.

Source: Islamic Republic News Agency

[OIL PRICES] Crude Oil Is Steady After Report of Natural-Gas Supply Gain

2008-05-15T22:29:00.004+02:00

Crude oil was little changed after an Energy Department report showed that natural gas supplies rose and the U.S. Congress approved legislation that strengthens oversight of electronic energy trading.

Stockpiles climbed 93 billion cubic feet last week, the department said. The Senate approved the measure by a 81-15 vote, a margin large enough to override a threatened veto from President George W. Bush. Oil prices were up before the gas report's release on signs that European fuel demand will rise.

``We've been waiting for a correction to happen,'' said Daniel Flynn, a broker with Alaron Trading Corp. in Chicago. ``The bearish natural-gas inventory number appears to have started the selling today. I think once it was clear that we weren't going to break through $130 anytime soon, the funds started selling.''

Crude oil for June delivery dropped 10 cents to settle at $124.12 a barrel at 2:48 p.m. on the New York Mercantile Exchange. Futures touched $120.75, the lowest since May 7. The contract surged to a record $126.98 on May 13.

Analysts forecast a natural-gas inventory gain of 88 billion cubic feet, according to the median of 23 estimates in a Bloomberg News survey.

The House approved the bill governing electronic trading yesterday by a veto-proof majority. The measure is part of a farm bill. The legislation gives the Commodity Futures Trading Commission authority to regulate contract trades that either have a large volume, are used to help determine prices or are linked to a regulated contract.

It also requires an audit trail and record-keeping for electronic exchanges, imposes limits on speculation, calls for market monitoring and increases penalties the commission can levy to $1 million.

Intercontinental Exchange
Brent crude oil for June settlement fell 61 cents, or 0.5 percent, to settle at $121.25 a barrel on the ICE Futures Europe exchange. Trading resumed at 2 p.m. after a power failure shut the exchange earlier today. The contract touched a record $125.90 on May 9.

Prices might not fall much further, because of growing global demand for distillate fuels, such as heating oil and diesel. The profit margin, or crack spread, for making a barrel of oil into one of heating oil surged to $29.554 a barrel on May 13, the highest since at least 1989, according to futures prices.

``The heating oil crack tells me that this rally isn't over,'' said Jim Ritterbusch, president of Galena, Illinois-based energy consulting firm Ritterbusch & Associates. ``I think prices will be higher when we come in next week.''

Source: Bloomberg| by Mark Shenk

[OIL INDUSTRY] Economic Consequences Of Sky-Rocketing Oil

2008-05-14T17:49:00.004+02:00

Ages ago, in the basement of our five-story walk up, my father's sideline was packaging matzo farfel. I would help him mangle the matzos there and then sell farfel door-to-door like encyclopedias. Any housewife worth her salt fried up matzo brie fritters for her family over Passover using Old Ben's farfel.

It was my bad luck to hail from the East Bronx, far from Texas oil field country. I could'a been another Boone Pickens instead of a nerdy old MBA squinting at spread sheets with 40 lines of numbers filling the page.

Fast-forward to the presidential primaries: While my little lady was canvassing for Hillary in the Indianapolis suburbs (10 hours, daily) she noted pickup trucks sitting in driveways even though nobody was home. Families now carpool to work, their gas guzzlers abandoned.

Our airlines mothball in the desert more 20-year-old 737s and MD-80s, trimming the seats that would have been flown with these old and inefficient planes. Few of these carriers make the cash flow to replace these oldies with Boeing's (nyse: BA - news - people ) fuel efficient 737-900s.

Meanwhile, ExxonMobil, with momentous generosity to shareholders, kicked up its quarterly dividend from 35 cents to 40 cents a share--still under 20% of current earnings power. The company will spend an incremental $5 billion per annum looking for more oil because it failed to increase production the past five years.

Was ExxonMobil expecting $60-a-barrel oil--what we had little more than a year ago?

Delta Air Lines owns and leases over 100 16-year-old Boeing 757s--with just a dozen fuel-efficient aircraft on order--out of a 600-plus fleet. Fuel hedges for the rest of 2008 cover less than half the fleet's consumption and were written around gas pegged at $2.75 a gallon. Jet fuel this week sold at $3.41 a gallon, and Delta burns 500 million gallons quarterly. You do the arithmetic. The airline's fuel bill ballooned over $500 million during the March quarter, year over year.

In short, Delta Air Lines' incremental fuel bill runs over $2 billion this year. The company can raise ticket prices just so much before it eats into revenue passenger miles. Delta Air Lines' liquidity approximates $3.6 billion, but it could lose at least a billion this year. Crunch time comes some time in 2009 because mergers don't yield much in cost savings.

On the other side of the world, OPEC nations wallow in an embarrassment of riches. Sovereign funds, already in the trillions, will grow by $3 trillion to $5 trillion the next five years. This manna pours into direct investments around the world in real estate, minority interests in banks, brokerage houses and industrial ventures, as well as securities markets. The dollar can't rally much if $100-plus oil darkens our sky--even if European economies stall out. Remember, they pay in euros.

Energy is a meaningful cost of doing business, hitting mining operators, industrial plants and big box retailers. Alternative fuels like coal and natural gas key off oil in terms of equivalent British thermal units content pricing. Expect higher utility bills. My home fuel supplier always seems to fill my tank with diesel when prices peak. This winter, I'm setting my thermometer down to 67 degrees and wearing pullovers.

On short flights, passengers can expect double last year's ticket prices with no end in sight. Discretionary travel is suspect this summer with some impact on both hotel occupancy and room rates. Las Vegas is already feeling the pinch.

In the work force, the slowing economy is cutting into average hourly earnings, decelerating from 5% to 3% as payroll employment weakens. Overtime is down from over five to under four hours a week. It never fell below 2.5 hours in the horrendous recession of 1981-82. For guys in work boots and women on assembly lines in the heartland--who rely on some overtime--belts need to be tightened a notch.

Short of junking 100 million cars on the road today with poor gas mileage, it may take 10 years before we approach 30 miles per gallon efficiency. To cut back demand and consumption of gasoline, the country needs to shorten the grace period for Detroit to reach acceptable mpg standards, a costly makeover. Don't count on it.

Don't blame the refineries for gouging the public: Refining margins are paper thin because they're processing more expensive crude oil. With no quick fixes to sky-high oil, financial markets slog along. We are lucky the country doesn't face an inflationary bias in labor costs.

Food and energy inflation may be a way of life for us. Our domestic oil reserves peaked years ago, and attacking the demand side of oil consumption is a responsibility our politicos have ducked for 20 years.

Don't expect OPEC to open the spigots for us. Satellite photographs of the elephantine Saudi oil fields suggest there's more pressure-pumping going on to keep production at a high level. Aramco claims it can increase output a few million barrels a day over the next few years, but this is oil-speak politics.

If the bears are right that Saudi fields are peaking, only a decrease in demand (owing to higher and higher oil prices) keeps the equilibrium with world supply. Futures markets now reflect this point of view. Even long-term contracts track well over $100 a barrel.

The future market is in a state of regression, with spot prices much higher, but any serious shortfall in world supply sends the market into a contango mode with long-dated quotes higher than spot prices. Investors will read this as bearish for inflation, the dollar, our balance of trade and profitability of domestic businesses--not exactly bull market indicators. Half our trade deficit is oil imports.

I've increased my commitment to the energy sector from underweight to slightly overweight. If I include pipeline, storage and natural gas liquids partnerships--all of which yield rich investments--I'm about 20% allocated in energy, which is now 14% of the S&P 500, double what it was two years ago.

What stops me from grossly overweighting energy is that most oil and gas operators can't increase production or the reserve-life of their assets. Costs for everyone escalate 10% to 15% annually for labor, seismic services and drilling rigs. Transocean and Schlumberger make operators pay up, pegging prices to rising oil market quotes.

With refining margins minimal and chemicals profits somewhat depressed, a peaking of oil prices must impact earnings big time for all integrated oil producers. That's why ExxonMobil is a mediocre investment. The company can't increase production and needs to allocate more capital for drilling and exploration just to maintain the reserve life of its oil fields worldwide.

Strategically, I'm going with properties that can at least increase production modestly. My horses are Devon Energy, Apache and Occidental Petroleum. Service operators, like Schlumberger, and deep water rig outfits, like Transocean, get my money.

Source: FORBES | by Martin T. Sosnoff

[MIDDLE EAST] Iranian Oil minister denies crude output cut

2008-05-14T01:12:00.003+02:00

Oil Minister of Iran, Gholam-Hossein Nozari denied on Tuesday reports about Iran's decision to reduce its crude oil output. Speaking to IRNA on the sidelines of a high-level managerial meeting at the ministry, Nozari said Iran usually decided about prices of its crude oil and exports based on the present situation at oil world market.

"The Oil Ministry is regularly checking the crude oil production and its exports," he said.

His comments came amid some reports that Iran was planning to cut its oil production up to 1 million barrels per day.

"For the time being, we have no plan to cut crude output. We would check crude exports and then we may decide on increase or decrease," the minister added.

Iran, the world's fourth-largest oil producer, is exporting an average of 2.4 million - 2.5 million barrels of crude oil per day, said the minister. However, he added that the amount would sometimes increase to three million or decrease to two million bpd based on situation at oil market.

Nozari said that Iran's current crude output stands on 4.170 million bpd.

Source: Islamic Republic News Agency

[MIDDLE EAST] Iran official says dollar causes record oil

2008-05-11T14:41:00.000+02:00

The weak U.S. dollar is the main reason behind oil prices rising to record levels, not demand or supply factors, an Iranian Oil Ministry official was quoted as saying on Saturday.

“We must be aware that it is not the price of crude oil that has risen but the dollar value that has weakened,” said Mohammad Ali Khatibi, deputy director of international affairs at the National Iranian Oil Company.

“Currently the prices of crude oil do not follow supply and demand and they will gain moderation in the event of improvement in (the value of) the dollar,” he was quoted as saying by the Oil Ministry website Shana.

Khatibi was speaking a day after U.S. crude oil futures CLc1 jumped to a record above $126 a barrel, extending gains to more than 11 percent since the start of the month on fuel supply concerns and a rush of speculator buying. The steady rise in crude oil prices has turned the spotlight on the Organization of the Petroleum Exporting Countries (OPEC), which for months has insisted it has no control over the factors it blames for pushing up the price of oil, including speculation and the weak U.S. dollar.

Iran is the world’s fourth-largest oil producer and Organization of the Petroleum Exporting Countries’s second largest exporter.

“I believe there is a direct relationship between the drop in the value of the dollar and hike in the price of oil,” Khatibi said, adding oil prices rose eight percent in the first quarter of 2008 after the dollar fell as much the previous quarter.

On Thursday, Iran’s Oil Minister Gholamhossein Nozari said it would be possible to see a price of $200 per barrel for crude if existing conditions in the market continued. Nozari said the reasons behind the surge in oil prices were the weak U.S. dollar and supply concerns from Nigeria.

Source: Reuters

[OiL FUTURES] Oil and gas execs see oil prices fall below $100 by year-end–survey

2008-05-11T14:35:00.002+02:00

Oil prices will drop “significantly” from the current record level to below $100-a-barrel by the end of the year, a new survey of oil and gas executives showed. The survey results came as crude futures prices surged to a record above $126 a barrel Friday, fueled by weakness in the U.S. dollar, worries over supply disruptions and speculative demand.

About 55% of the 372 financial executives from oil and gas companies surveyed by KPMG’s Global Energy Institute think that crude oil price will drop below $100 by the end of the year, while only 9% believe it will close at above $120.

Some 21% of the executives think oil will close the year between $101 and $110, while 15% think it may end between $111 and $120.

What’s more, the survey found that while 44% of the respondents felt prices would peak by the end of the year, a further 39% thought that they would not peak until after 2010. Crude for June delivery touched a high of $126.20, before pulling back to last trade up $1.12, or 0.9%, at $124.82 a barrel on the New York Mercantile Exchange.

Oil prices have doubled over the past year. About 63% of oil and gas executives believe that growing demand from emerging markets is the major contributor to the high price of oil.

Source: Teheran Times

[OiL FUTURES] High energy prices lift earnings for BP and Royal Dutch Shell

2008-05-11T14:11:00.005+02:00

Higher oil and natural gas prices helped Royal Dutch Shell and BP report record first-quarter profits Tuesday, beating analysts' expectations and prompting share gains across the industry.

The two biggest oil companies in Europe more than offset declining refining margins as crude oil nears $120 a barrel. A move by investors to commodities as an alternative to the shrinking dollar, combined with a spate of supply disruptions, helped to push U.S. crude futures to a record $119.93 on Monday.

Shell's net income in the first three months of the year rose 25 percent to $9.08 billion. BP reported its profit increased 63 percent to $7.62 billion. Shares of Shell and BP trading in London rose more Tuesday than they had in at least two years, leading other oil companies, like ConocoPhillips and ExxonMobil, higher.

"The results are very good because of the high oil price but also without it because we had expected the refining margins, which collapsed, to affect earnings," said Christine Tiscareno, an oil analyst at Standard & Poor's in London. "Both companies did an excellent job controlling costs."

Tiscareno and other analysts warned that while a rising oil price might for now benefit Shell and its rivals, it would at some point start to hurt demand for gasoline, as customers became unable to afford the higher prices. Peter Voser, chief financial officer at Shell, told analysts during a conference call that it was "too early" to say how and when the higher oil price would affect demand.

Despite recent disruptions at BP, oil and natural gas production was unchanged at 3.9 million barrels of oil-equivalent a day, while output at Shell remained unchanged at 3.5 million barrels of oil-equivalent a day. BP closed a pipeline system Sunday after a strike at a refinery in Scotland cut supplies. Some investors are particularly worried about supplies from Nigeria, which produces the higher quality crude needed in the United States to meet the demand that is expected to increase during the upcoming summer driving season. This month, five police officers guarding an oil terminal in Nigeria were killed by armed militants, who aim to damage exports from the oil-rich Niger Delta.

Shell said attacks in Nigeria had halted 164,000 barrels of oil-equivalent a day of production in the country. Voser said Shell planned to invest up to $27 billion to add one million barrels a day of production.

To improve earnings, Tony Hayward, who succeeded John Browne as chief executive of BP last year, is focusing on restoring production capacity and finding new projects. BP began oil production at the Deep Water Gunashli field in the in the Azerbaijan section of the Caspian Sea this month and expects its Thunder Horse production platform in the Gulf of Mexico, which cost more than $1 billion to build, to start production this year following a three-year delay. The company also completed some repairs at its plant in Whiting, Indiana, and the Texas City refinery, where an explosion killed 15 people in 2005.

Edward Westlake, an analyst at Credit Suisse in London, said that the earnings were "strong" and that the "results have captured increases in oil and gas pricing, while keeping costs increases muted."

BP and Shell are both trying to regain investor confidence damaged by delays and higher costs associated with new projects last year. In the case of BP, a lack in safety measures led to the Texas explosion. Hayward pledged to remove layers of bureaucracy to make managers more accountable for their businesses and improve efficiency.

Oil companies are also under pressure to find new projects to grow as its traditional fields age. They are also facing competition with state-run oil companies in Russia and the Middle East.

Other oil companies that profited from higher prices included ConocoPhillips, whose first-quarter profit rose 17 percent to $4.14 billion. ExxonMobil, the world's largest oil company, is set to report its figures May 1, followed the next day by Chevron.

Source: International Herald Tribune| by By Julia Werdigier