Developing Nation Yields Soar on Bailouts, Russia Rating Threat http://www.bloomberg.com/apps/news?pid=20601087&sid=aAXz7yGSpXM4&refer=home
Oil Falls as Saudi Arabian Minister Fails to Endorse OPEC Cut http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a9ogUG3HZOpA Oct. 23 (Bloomberg) -- Crude oil fell, giving up earlier gains, after Saudi Arabia failed to endorse Iran's call for an OPEC production cut when the group meets tomorrow. Oil prices lost earlier gains after the oil minister of Saudi Arabia, the group's biggest producer, declined to express his support for a possible cut on his arrival in Vienna. Iranian Oil Minister Gholamhossein Nozari had earlier called for the group to slash production by 2 million barrels a day. ``OPEC's major problem is that they have never faced a demand-led surplus before,'' David Hufton of London-based PVM Oil Associates Ltd. said in an e-mailed note today. ``Cutting supply when the other leg is being cut off faster does not restore the balance.'' Crude oil for December delivery fell as much as 85 cents, or 1.3 percent, to $65.90 a barrel on the New York Mercantile Exchange. The contract traded at $66.88 at 1:57 p.m. London time. It earlier rose as much as $1.75 to $68.50 a barrel. ``Who said anything about a cut?'' Saudi Arabia's Ali al- Naimi said when asked whether he supports the possibility of the group agreeing to reduce output when it meets tomorrow. ``Prices will be determined by the market.'' Prices have more than halved since rising to a record $147.27 on July 11 on concerns that the global economic slow down will cut oil demand. Yesterday, futures fell $5.43 to $66.75, the lowest settlement since June 13, 2007. U.S. Demand Falls U.S. fuel demand during the past four weeks was down 8.5 percent from a year ago, according to an Energy Department report yesterday. Gasoline demand averaged 8.8 million barrels a day in the past four weeks, down 4.3 percent from the same period last year, the report showed. The global economy will be in a recession through most of next year as weak demand in the U.S. spreads to Europe and beyond, Dow Chemical Co. Chief Executive Officer Andrew Liveris said in a telephone interview today. ``The rate of reduction in demand is good for cutting,'' Iran's Nozari told reporters today. Brent crude oil for December settlement fell as much as 52 cents, or 0.8 percent, to $64 a barrel on London's ICE Futures Europe exchange. It traded at $64.51 at 1:45 p.m. local time. On Oct 22, 4:05 pm, "[EMAIL PROTECTED]" <[EMAIL PROTECTED]> wrote: > Crude Oil Falls to 15-Month Low on Weakening Demand for > Fuelshttp://www.bloomberg.com/apps/news?pid=20601087&sid=akVUWReOJLmM&refe... > > Oct. 22 (Bloomberg) -- Crude oil fell more than $3 a barrel to a 15- > month low as weakening fuel consumption outweighed prospects of a > production cut by OPEC at a meeting this week. > > The global financial crisis, which helped send U.S. fuel use to the > lowest since 1999, is spreading to emerging markets. OPEC, supplier of > more than 40 percent of the world's oil, will decide on Oct. 24 to > lower output by 1 million barrels a day, according to a Bloomberg > survey. > > ``The market is more concerned about slowing demand than OPEC right > now,'' said Phil Flynn, senior trader at Alaron Trading Corp. in > Chicago. ``Any OPEC cut will probably be outpaced by the rate demand > is falling.'' > > Crude oil for December delivery declined $3.50, or 4.9 percent, to > $68.68 a barrel at 9:05 a.m. on the New York Mercantile Exchange. > Futures touched $68.48, the lowest since June 27, 2007. Prices, which > have tumbled 53 percent since reaching a record $147.27 on July 11, > are down 21 percent from a year ago. > > Argentina's planned seizure of $29 billion of private pension funds > stoked concern the nation is heading for its second default in a > decade. President Cristina Fernandez de Kirchner's decision hurt > markets already reeling from slumping commodity prices and slower > growth. > > U.S. gasoline demand dropped 6.4 percent last week from a year > earlier, the 26th consecutive weekly decline, a MasterCard Inc. report > showed yesterday. > > Fuel demand in the U.S. averaged about 18.6 million barrels a day > during the four weeks ended Oct. 10, the lowest since June 1999, > according to an Energy Department report last week. The department is > scheduled to release its report on U.S. supply in the week ended Oct. > 17 at 10:35 a.m. today in Washington. > > Higher Inventories > > The report will probably show that crude oil inventories climbed 2.65 > million barrels in the week ended Oct. 17, the fourth-straight weekly > gain, according to the median of responses in a Bloomberg News > survey. > > The Organization of Petroleum Exporting Countries may disregard pleas > from oil-consuming nations on the brink of recession and cut output > this week, a Bloomberg survey showed. > > Thirty of 33 analysts surveyed yesterday and today forecast that OPEC > will lower production by 1 million barrels a day or more at the > meeting in Vienna, which was brought forward from November. That's > more oil than Australia consumes. OPEC also may signal plans for an > additional reduction of at least 500,000 barrels a day by early 2009. > > Brent crude oil for December settlement fell $2.79, or 4 percent, to > $66.93 a barrel on London's ICE Futures Europe exchange. > > On Oct 22, 4:00 pm, "[EMAIL PROTECTED]" <[EMAIL PROTECTED]> wrote: > > > > > Gazprom Warns Crisis May Affect Borrowing After Record > > Profithttp://www.bloomberg.com/apps/news?pid=20601087&sid=azZ3vRBoNxuM&refe... > > > Oct. 22 (Bloomberg) -- OAO Gazprom, Russia's natural-gas exporter, > > said it may have trouble obtaining new loans and refinancing debts > > even after posting record earnings. > > > ``Deteriorating operating conditions for borrowers may also have an > > impact on management's cash flow forecasts,'' the Moscow-based company > > said today in a statement on its Web site. > > > Chief Executive Officer Alexei Miller had said at the weekend that the > > credit crisis wasn't a ``troubling factor'' for the company. First- > > quarter net income rose 30 percent to 273 billion rubles ($10.1 > > billion), beating the 221 billion-ruble median estimate of eight > > analysts in a Bloomberg survey. > > > ``These are great numbers, the best numbers they've ever had, but they > > are more than half a year out of date, and the world is changing > > beneath our feet,'' said Ronald Smith, chief strategist at Moscow- > > based Alfa Bank. > > > Gazprom slid 7.4 percent to 109.50 rubles on Moscow's Micex Stock > > Exchange as of 3:43 p.m. local time. Shares of the state- run company > > have tumbled about 70 percent since May as investors pulled their > > money out of emerging markets as the financial crisis spread. > > > The cost of protecting against a default by Gazprom rose to 1,140 > > basis points yesterday, according to data from CMA Datavision, putting > > it into the category investors refer to as ``distressed'' debt. > > > Credit-default swaps protect bondholders against default by paying the > > buyer face value in exchange for the underlying securities or the cash > > equivalent should a company fail to adhere to its debt agreements. A > > basis point, or 0.01 percentage point, is equivalent to $1,000 on a > > contract that protects $10 million of debt from default. > > > Outstanding debt > > > Gazprom and its subsidiaries have $55 billion in outstanding bonds and > > loans, according to data compiled by Bloomberg. The company is > > scheduled to repay $6.6 billion next year and $12.5 billion in 2010, > > the data show. > > > The energy producer has already said it's reviewing its spending > > program amid tightening credit markets and lower revenue expectations. > > It has laid out plans to spend more than $30 billion this year on new > > projects as output drops at mature fields in western Siberia. > > > Gazprom's results were boosted by higher gas prices in Europe, where > > the company supplies a quarter of all demand. Gazprom's prices in > > dollar terms rose 28 percent for European gas sales, reaching $345.5 > > for 1,000 cubic meters. > > > Lag Behind > > > Natural gas prices lag oil prices by about six months, meaning Gazprom > > will continue to post ``solid'' financial results through the end of > > 2008, Citigroup Inc. said in an e- mailed research note today. > > > The European gas price may peak at $500 for 1,000 cubic meters of gas > > in the fourth quarter before declining, Citigroup analysts Alexander > > Korneev and Ildar Khaziev wrote. Crude oil futures have tumbled 52 > > percent from a record $147.27 in July. > > > Gazprom will have to ``significantly'' increase capital spending on > > gas production in the ``short term,'' limiting free cash flow > > generation, Citigroup said. > > > Gazprom and the country's three largest oil companies earlier this > > month appealed to Prime Minister Vladimir Putin to provide financing > > for energy projects should it become necessary. > > > On Oct 22, 3:58 pm, "[EMAIL PROTECTED]" <[EMAIL PROTECTED]> wrote: > > > > My comment: I quote "Saudi Arabia needs oil prices of less than $30 a > > > barrel to balance its government budget, according to Merrill Lynch & > > > Co. estimates. The United Arab Emirates requires $40 a barrel and > > > Qatar $55. > > > > Iran, with double the population of Saudi Arabia, has a breakeven > > > point of about $100 a barrel, according to Edward Morse, managing > > > director and chief economist at Louis Capital Markets LP in New York. > > > In Venezuela, where President Hugo Chavez's government is spending oil > > > revenue on social programs, the figure is about $120, he said." > > > > Something like that happens with Russia. > > > > That is what Americans and Europeans are really paying for and this is > > > the short term reason that deepened the banking crisis. That is behind > > > the rise of the US dollar. And that is behind the scarcity of US > > > dollars in markets. > > > > OPEC Risks Split on Cuts as Economies Reel, Oil Drops > > > (Update1)http://www.bloomberg.com/apps/news?pid=newsarchive&sid=avyteJ5WWJ1c > > > > Oct. 22 (Bloomberg) -- OPEC, founded five decades ago to unify oil > > > producers, risks dividing members as the group plans to cut output and > > > raise prices just as developed nations face their worst recession > > > since 1983. > > > > Iran's energy minister, Gholamhossein Nozari, said yesterday OPEC may > > > slash output quotas by 2.5 million barrels a day, or 8.7 percent, an > > > amount about equal to what's pumped from Kuwait. The Algerian minister > > > and OPEC president, Chakib Khelil, said two days earlier the reduction > > > at the group's Oct. 24 meeting in Vienna may be only 1 million > > > barrels. > > > > The debate in the Organization of Petroleum Exporting Countries pits > > > Saudi Arabia, the group's biggest producer and a U.S. ally, against > > > Venezuela and Iran, two nations that oppose U.S. foreign policy and > > > advocate higher oil costs. Crude has plunged 53 percent from its July > > > 11 record of $147.27 on the New York Mercantile Exchange. It traded at > > > $69.37 today. > > > > ``The divisions arise in OPEC because what countries need and want > > > varies,'' said Gareth Lewis-Davies, an oil analyst at Dresdner > > > Kleinwort Group Ltd. in London. ``The Saudis are playing a long-term > > > political game. Other countries have higher costs.'' > > > > Saudi Arabia needs oil prices of less than $30 a barrel to balance its > > > government budget, according to Merrill Lynch & Co. estimates. The > > > United Arab Emirates requires $40 a barrel and Qatar $55. > > > > Iran, with double the population of Saudi Arabia, has a breakeven > > > point of about $100 a barrel, according to Edward Morse, managing > > > director and chief economist at Louis Capital Markets LP in New York. > > > In Venezuela, where President Hugo Chavez's government is spending oil > > > revenue on social programs, the figure is about $120, he said. > > > > Below $50 > > > > Oil options trading shows the probability that crude will fall below > > > $50 a barrel by June has more than doubled in 10 days, Deutsche Bank > > > AG said in an Oct. 17 report. There is a 9 percent likelihood that > > > June 2009 crude oil contracts will expire below $50, up from 4 > > > percent, Deutsche said. > > > > The world's industrialized economies will expand next year at the > > > slowest pace since 1982, the International Monetary Fund said Oct. 8. > > > Growth will weaken to 0.5 percent in 2009, from 1.5 percent this year, > > > sending > > ... > > read more » --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
