Tokyo, Singapore: Saudi Arabia has raised the official selling prices (OSPs) of its heavier crudes in September by more than expected for Asian buyers, setting Arab Heavy at its highest in two years, traders said yesterday.
The world's top oil exporter also raised prices to Europe but cut the OSPs sharply for all its crude supplies to the US.
For Asian customers, Arab Heavy, the kingdom's heaviest grade, was set at a discount of $3.60 a barrel to the Oman/Dubai average, up 70 per cent from August and at the strongest level since July 2005, exceeding the top end of forecasts in a Reuters survey last week.
"Refiners in Asia are all after medium and heavy crudes. It's very economical for them now," a seller said, referring to the relatively cheaper heavy crude grades compared with lighter Brent-linked crudes.
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The front-month Brent/ Dubai Exchange of Futures for Swaps (EFS) stood at $5.35/$5.40 a barrel yesterday morning against around $3.60 a month ago, making it more expensive for refiners to buy Brent-related crude from Europe.
Heavier grades also drew support from a strong fuel oil crack last month. The front-month fuel oil crack rose to an average of $10.96 a barrel below Dubai swaps in July, against a $11.44 discount in June, and has extended those gains to near minus $8, Reuters data show.
Arab Medium and Arab Light grades for Asia were raised by 50 cents and 20 cents a barrel from August, respectively, also above market forecasts.
The differential for Arab Extra Light for Asia was unchanged, in line with forecasts, while the Super Light crude OSP was cut by $1 a barrel amid weakening naphtha prices.
Monday, August 6, 2007
Kuwaiti dinar at 18-year high against dollar
Kuwait: Kuwait's central bank allowed the dinar to appreciate on Sunday for the second time in a week, taking the currency to at least an 18-year high against a tumbling US dollar.
The dinar will trade up 0.11 per cent around a midpoint of 0.28170 per dollar compared with 0.28200 on Thursday, the central bank said, the strongest since at least January 1989, according to Reuters data.
The currency of the Middle East's fourth-largest oil exporter has now risen 2.64 per cent since May 19, a day before the central bank dropped its peg to the weakening dollar andadopted a basket of currencies. Kuwait has declined to give the composition of the basket.
The dollar tumbled on Friday, hitting two-year lows versus the Swiss franc as fears about losses in the US credit sector intensified.
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The US currency declined to a record low last month against the euro in which Kuwait pays for more than a third of its imports.
"I expect the dinar, adjusted on a regular basis, to reflect the dollar's performance against major currencies," said Simon Williams, Middle East economist at HSBC.
The dinar will trade up 0.11 per cent around a midpoint of 0.28170 per dollar compared with 0.28200 on Thursday, the central bank said, the strongest since at least January 1989, according to Reuters data.
The currency of the Middle East's fourth-largest oil exporter has now risen 2.64 per cent since May 19, a day before the central bank dropped its peg to the weakening dollar andadopted a basket of currencies. Kuwait has declined to give the composition of the basket.
The dollar tumbled on Friday, hitting two-year lows versus the Swiss franc as fears about losses in the US credit sector intensified.
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The US currency declined to a record low last month against the euro in which Kuwait pays for more than a third of its imports.
"I expect the dinar, adjusted on a regular basis, to reflect the dollar's performance against major currencies," said Simon Williams, Middle East economist at HSBC.
Commodity Prices Sag on Economic Worries
NEW YORK -
Commodities prices tumbled Monday as investors questioned the strength of the U.S. economy and what impact any weakness in this country might have on global demand for crude oil, copper and other raw materials.
Oil plummeted more than $2 on Monday, while industrial and precious metals prices slumped lower. Agriculture futures were mixed, meanwhile.
Without fresh economic news, commodities traders continued to digest last week's barrage of mostly weak data on personal income, construction spending, factory orders and other indicators. Data gauging the health of the overall economy in July has come in worse than economists expected and left commodities investors disquieted.
Investors are also awaiting a decision by the Federal Reserve on its benchmark interest rate, which has held firm at 5.25 percent since June 2006. Although the Fed is widely expected to leave the key rate untouched at its meeting on Tuesday, investors will scour the central bank's policy statement comments for clues into the health of the economy - and the troubled credit markets in particular.
Commodities prices tumbled Monday as investors questioned the strength of the U.S. economy and what impact any weakness in this country might have on global demand for crude oil, copper and other raw materials.
Oil plummeted more than $2 on Monday, while industrial and precious metals prices slumped lower. Agriculture futures were mixed, meanwhile.
Without fresh economic news, commodities traders continued to digest last week's barrage of mostly weak data on personal income, construction spending, factory orders and other indicators. Data gauging the health of the overall economy in July has come in worse than economists expected and left commodities investors disquieted.
Investors are also awaiting a decision by the Federal Reserve on its benchmark interest rate, which has held firm at 5.25 percent since June 2006. Although the Fed is widely expected to leave the key rate untouched at its meeting on Tuesday, investors will scour the central bank's policy statement comments for clues into the health of the economy - and the troubled credit markets in particular.
Dollar rebounds from early run at record low against euro
The dollar fell to within touching distance of its record low against the euro and a four-month trough against the yen on Monday, only to subsequently recover as turbulence on global stock markets continued.
Both the dollar and euro reached their highs for the day against the Japanese currency as US stocks surged in late trade.
In spite of the rebound, the dollar faces a testing time say traders. A US interest rate cut is forecast by Fed fund futures before the end of the year. Analysts said weaker-than-expected US jobs data on Friday had done little to alleviate bearish sentiment towards the dollar.
While the Federal Reserve was expected to keep interest rates on hold after its policy meeting on Tuesday, analysts said the accompanying statement would be scoured for any suggestions that the central bank could react to recent problems in the US subprime mortgage sector by easing monetary policy.
Moreover, Hans Redeker at BNP Paribas said there had been a significant change in the dollar’s trading behaviour as equities markets tumbled on Friday. He said unlike during previous global stock market sell-offs in recent weeks, the dollar had come under pressure. “Previously the dollar had gained on equity market declines as US investors were perceived to be repatriating capital,” he said.
“However, the latest dollar weakness suggests that international investors are now becoming more concerned with the spillover from the subprime and housing market crisis into the rest of the US credit markets and economy.”
The dollar fell to a low of $1.3839 against the euro on Monday in early trade, just shy of the all-time trough of $1.3852 it hit two weeks ago. It later rallied and was up 0.1 per cent at $1.3786 late in New York on Monday. The dollar rebounded 1.2 per cent to Y119.04 after making a low against the yen of Y117.20. The dollar rose 0.5 per cent to SFr1.1918 against the Swiss franc.
Both the dollar and euro reached their highs for the day against the Japanese currency as US stocks surged in late trade.
In spite of the rebound, the dollar faces a testing time say traders. A US interest rate cut is forecast by Fed fund futures before the end of the year. Analysts said weaker-than-expected US jobs data on Friday had done little to alleviate bearish sentiment towards the dollar.
While the Federal Reserve was expected to keep interest rates on hold after its policy meeting on Tuesday, analysts said the accompanying statement would be scoured for any suggestions that the central bank could react to recent problems in the US subprime mortgage sector by easing monetary policy.
Moreover, Hans Redeker at BNP Paribas said there had been a significant change in the dollar’s trading behaviour as equities markets tumbled on Friday. He said unlike during previous global stock market sell-offs in recent weeks, the dollar had come under pressure. “Previously the dollar had gained on equity market declines as US investors were perceived to be repatriating capital,” he said.
“However, the latest dollar weakness suggests that international investors are now becoming more concerned with the spillover from the subprime and housing market crisis into the rest of the US credit markets and economy.”
The dollar fell to a low of $1.3839 against the euro on Monday in early trade, just shy of the all-time trough of $1.3852 it hit two weeks ago. It later rallied and was up 0.1 per cent at $1.3786 late in New York on Monday. The dollar rebounded 1.2 per cent to Y119.04 after making a low against the yen of Y117.20. The dollar rose 0.5 per cent to SFr1.1918 against the Swiss franc.
Speculators cash in to send price of crude lower
Commodities prices on Monday fell from recent highs on profit-taking after speculators began to liquidate their record bet on surging prices, particularly in the energy complex.
Oil tumbled more than $2 a barrel to its lowest for nearly three weeks, with worries that the credit turmoil could slow down the US economy adding to the negative mood. Expectations that the hurricane season might not be as bad as feared also contributed to the losses, analysts said.
In late afternoon London trade, Nymex September West Texas Intermediate was down $3.42 at $72.06 a barrel while ICE September Brent fell $3.58 to $71.17 a barrel – the lowest levels since mid-July.
Nymex September RBOB gasoline fell 6.11 cents to $1.9679 a gallon – the lowest since April. Nymex September heating oil dropped 5.7 cents to $1.9774 a gallon.
Non-commercial net long positions on the Nymex oil contract – speculative bets on higher prices – in the week to July 31 were at an all-time high of 127,941 contracts, according to the US Commodity Futures Trading Commission. The record bet on surging prices came just one day before the Nymex WTI price touched an all-time high of $78.77 a barrel.
Barclays Capital said that given the large size of speculative long positions in the market, further downwards pressure in the short-term cannot be ruled out.
Harry Tchilinguirian, of BNP Paribas, added: “The question is whether the accumulation of this length will unwind as it did in 2006 when it had reached comparable levels.”
In August last year, oil prices plunged by about $20 a barrel just a few weeks after surging to $77.40 a barrel on fears of an escalation of the Israeli-Lebanon war and with speculators betting on higher prices.
The large drop forced the Organisation of the Petroleum Exporting Countries to convene an emergency meeting and to agree to cut its output.
Gold prices slid $1.05 to $671.85 an ounce troy, in spite of renewed US dollar weakness against the euro. Silver was little moved at $12.93 an ounce troy while platinum rose to $1,292 an ounce troy, from $1,281 last Friday.
Base metals were mixed, with lead plunging more than 6.5 per cent after surging recently to an all-time, but tin rose 1 per cent $16,150 a tonne level, close to last week’s record.
London Metal Exchange lead fell 6.2 per cent to $3,086 a tonne but is still up 90 per cent since January. Copper was flat at $7,675 a tonne while aluminium moved 0.6 per cent lower to $2,653 a tonne. UBS said in a report: “In an environment where equities are weak and investors are clearly worried about the fall-out from the US housing market woes it is hard to make a case for firmer near-term base metal prices barring exceptional circumstances.”
Oil tumbled more than $2 a barrel to its lowest for nearly three weeks, with worries that the credit turmoil could slow down the US economy adding to the negative mood. Expectations that the hurricane season might not be as bad as feared also contributed to the losses, analysts said.
In late afternoon London trade, Nymex September West Texas Intermediate was down $3.42 at $72.06 a barrel while ICE September Brent fell $3.58 to $71.17 a barrel – the lowest levels since mid-July.
Nymex September RBOB gasoline fell 6.11 cents to $1.9679 a gallon – the lowest since April. Nymex September heating oil dropped 5.7 cents to $1.9774 a gallon.
Non-commercial net long positions on the Nymex oil contract – speculative bets on higher prices – in the week to July 31 were at an all-time high of 127,941 contracts, according to the US Commodity Futures Trading Commission. The record bet on surging prices came just one day before the Nymex WTI price touched an all-time high of $78.77 a barrel.
Barclays Capital said that given the large size of speculative long positions in the market, further downwards pressure in the short-term cannot be ruled out.
Harry Tchilinguirian, of BNP Paribas, added: “The question is whether the accumulation of this length will unwind as it did in 2006 when it had reached comparable levels.”
In August last year, oil prices plunged by about $20 a barrel just a few weeks after surging to $77.40 a barrel on fears of an escalation of the Israeli-Lebanon war and with speculators betting on higher prices.
The large drop forced the Organisation of the Petroleum Exporting Countries to convene an emergency meeting and to agree to cut its output.
Gold prices slid $1.05 to $671.85 an ounce troy, in spite of renewed US dollar weakness against the euro. Silver was little moved at $12.93 an ounce troy while platinum rose to $1,292 an ounce troy, from $1,281 last Friday.
Base metals were mixed, with lead plunging more than 6.5 per cent after surging recently to an all-time, but tin rose 1 per cent $16,150 a tonne level, close to last week’s record.
London Metal Exchange lead fell 6.2 per cent to $3,086 a tonne but is still up 90 per cent since January. Copper was flat at $7,675 a tonne while aluminium moved 0.6 per cent lower to $2,653 a tonne. UBS said in a report: “In an environment where equities are weak and investors are clearly worried about the fall-out from the US housing market woes it is hard to make a case for firmer near-term base metal prices barring exceptional circumstances.”
Wall St surges in big market rally
US stocks rallied overnight as investors snapped up beaten-down shares of financial companies after a sharp drop at the end of last week.
The fall had come on mounting concerns about the stability of the US credit markets.
But the worries about the impact of the struggling US housing sector on the global economy still affected Europe's main stock markets fell overnight.
London's FTSE 100 index lost 0.57 per cent to close at 6189.10 points. In Paris the CAC 40 shed 1.16 per cent to 5532.99 while in Frankfurt the Dax lost 0.11 per cent to finish at 7,444.04 points.
The DJ Euro Stoxx 50 index of top eurozone shares shed 0.62 per cent to close at 4202.78 points.
In the US the Dow erased Friday's losses, and had its biggest daily percentage advance since June 2003, while the Standard & Poor's 500 index turned in its best one-day performance since April 2003.
Stocks also got a boost from speculation the Federal Reserve may take steps to reassure investors that troubles in the sub-prime mortgage market won't slow economic growth.
Wells Fargo & Co announced the buyback of another 50 million shares, while Merrill Lynch's stock was upgraded by UBS AG, which said the stock's price already reflects risks the company faces in the mortgage market.
Shares of Bear Stearns rose 5 per cent after a Standard & Poor's analyst said the market's response to the ratings agency's recent outlook change to negative was a "vast overreaction".
"People feel like there's some confidence being restored in the debt markets," Stephen Massocca, co-chief executive of San Francisco-based investment bank Pacific Growth Equities, said, noting Wells Fargo's buyback and other financial sector news.
The fall had come on mounting concerns about the stability of the US credit markets.
But the worries about the impact of the struggling US housing sector on the global economy still affected Europe's main stock markets fell overnight.
London's FTSE 100 index lost 0.57 per cent to close at 6189.10 points. In Paris the CAC 40 shed 1.16 per cent to 5532.99 while in Frankfurt the Dax lost 0.11 per cent to finish at 7,444.04 points.
The DJ Euro Stoxx 50 index of top eurozone shares shed 0.62 per cent to close at 4202.78 points.
In the US the Dow erased Friday's losses, and had its biggest daily percentage advance since June 2003, while the Standard & Poor's 500 index turned in its best one-day performance since April 2003.
Stocks also got a boost from speculation the Federal Reserve may take steps to reassure investors that troubles in the sub-prime mortgage market won't slow economic growth.
Wells Fargo & Co announced the buyback of another 50 million shares, while Merrill Lynch's stock was upgraded by UBS AG, which said the stock's price already reflects risks the company faces in the mortgage market.
Shares of Bear Stearns rose 5 per cent after a Standard & Poor's analyst said the market's response to the ratings agency's recent outlook change to negative was a "vast overreaction".
"People feel like there's some confidence being restored in the debt markets," Stephen Massocca, co-chief executive of San Francisco-based investment bank Pacific Growth Equities, said, noting Wells Fargo's buyback and other financial sector news.
Gold's grand vision
NEWMONT Mining vice-chairman Pierre Lassonde believes the China-led resources boom will last a generation, and has tipped the price of gold will pass $US1000 ($A1169) an ounce.
Speaking at the annual Diggers and Dealers forum in Kalgoorlie yesterday, Mr Lassonde said China and India were likely to power world commodities markets for a further two decades.
He said the developing economies might experience hiccups along the way, but that wouldn't disrupt the upward trajectory of prices.
"This bull market in natural resources will last a whole generation. That's 20 years," Mr Lassonde said.
Known to be a gold bull, Mr Lassonde yesterday tipped that the price of the yellow metal would pass $US850 an ounce in the next 12 months but declined to put a timeframe on the $US1000 mark.
"I believe that gold will have three zeros after the first number. I just don't know what the first number will be." he said.
Gold is now fetching about $US670 an ounce. He said platinum and oil prices also had room to rise, but predicted copper and molybdenum prices had hit the peak in the cycle.
Newmont is the world's second largest gold producer and expects to produce up to 5.6 million ounces from its global operations this year.
It lost the number one spot to Canada's Barrick gold last year, but Mr Lassonde said yesterday the company would attempt to reclaim the title over the coming months
Speaking at the annual Diggers and Dealers forum in Kalgoorlie yesterday, Mr Lassonde said China and India were likely to power world commodities markets for a further two decades.
He said the developing economies might experience hiccups along the way, but that wouldn't disrupt the upward trajectory of prices.
"This bull market in natural resources will last a whole generation. That's 20 years," Mr Lassonde said.
Known to be a gold bull, Mr Lassonde yesterday tipped that the price of the yellow metal would pass $US850 an ounce in the next 12 months but declined to put a timeframe on the $US1000 mark.
"I believe that gold will have three zeros after the first number. I just don't know what the first number will be." he said.
Gold is now fetching about $US670 an ounce. He said platinum and oil prices also had room to rise, but predicted copper and molybdenum prices had hit the peak in the cycle.
Newmont is the world's second largest gold producer and expects to produce up to 5.6 million ounces from its global operations this year.
It lost the number one spot to Canada's Barrick gold last year, but Mr Lassonde said yesterday the company would attempt to reclaim the title over the coming months
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