OIL FUTURES: Crude Futures Slip In Asia On Profit-Taking; Downside Seen Limited

http://online.wsj.com/article/BT-CO-20120228-701153.html

Ga-Woon Philip Vahn
Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--Crude-oil futures slipped Tuesday in Asia as some market participants took profits after last week's strong rally and others reassessed their positions as the end of winter approaches in the Northern Hemisphere.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in April traded at $108.41 a barrel at 0657 GMT, down $0.15 in the Globex electronic session. April Brent crude on London's ICE Futures exchange fell $0.32 to $123.85 a barrel.

Some investors chose to book profits after the U.S. crude benchmark rallied to a nine-month high last week and a warmer weather outlook signaled the end of peak winter demand in the Northern Hemisphere.

"Physical demand will falter as we head into the spring season and major Asian refineries will be undergoing maintenance within the next several days," said a sales manager at Hyundai Oilbank's Dubai office.

Still, traders said the downside is likely limited because money managers continue to focus on falling Iranian oil exports and any upbeat U.S. economic data in coming days could prompt more risk investors to park their money in commodities and oil.

"Crude prices have hit overbought conditions but there is still plenty of upside risk to oil since Iran looks very determined not to give up its nuclear ambitions, while recent U.S. economic data indicate gradual economic recovery," said a sales representative at SK Innovation's Shanghai Office.

"While there were no major headlines today related to Iran, we still view the country's nuclear efforts as a latent bullish consideration capable of keeping this bull move alive despite the likelihood of further demand deterioration," Ritterbusch and Associates said in a note.

Nymex reformulated gasoline blendstock for March--the benchmark gasoline contract--fell 132 points to $3.1151 a gallon, while March heating oil traded at $3.2785, 79 points lower.

ICE gasoil for March changed hands at $1027.25 a metric ton, down $5.00 from Monday's settlement.

-By Ga-Woon Philip Vahn, Dow Jones Newswires; +65-64154149; philip.vahn@dowjones.com

Kosmos Energy acquires Sabre Oil’s interest offshore Ghana for $365m

http://spyghana.com/business-news/kosmos-energy-acquires-sabre-oils-interest-offshore-ghana-for-365m/

Jubilee partner, Kosmos Energy said February 27, 2012 that it has acquired the participating interest of Sabre Oil & Gas Holdings Limited in the Deepwater Tano Block, offshore Ghana for a purchase price estimated at approximately $365 million.

The deal was exercised under the existing Joint Operating Agreement.

Sabre could receive an additional $45 million contingent upon achieving certain performance milestones, the statement copied to ghanabusinessnews.com says.

Closing of the transaction should occur in the second quarter of 2012, subject to a definitive transaction agreement, customary closing conditions and necessary government approvals, it said.

“Following closing of the acquisition, Kosmos’ interest in the Deepwater Tano Block will increase from 18% to 22.05%. Kosmos’ interest in the Jubilee Field will increase from 24.1% to 25.8%,” the company added.

“This transaction adds existing production at Jubilee, enhances our stake in the next oil development offshore Ghana, and increases our exposure to the significant Deepwater Tano exploration programme in 2012,” said Kosmos’ CEO Brian F. Maxted.

By Ekow Quandzie/Ghanabusinessnews.com

Why Pres. Obama should tap the Strategic Petroleum Reserve for rising gas prices

Oil falls after recent surge despite supply fear

http://www.reuters.com/article/2012/02/27/us-markets-oil-idUSTRE81C0T620120227

By Robert Gibbons

NEW YORK

NEW YORK (Reuters) - Oil prices pulled back on Monday after a string of higher settlements as concerns that high oil prices might curb economic growth, along with the stronger dollar, countered supportive fears about Iran and potential supply disruptions.

Crude futures extended losses to more than $2 in post-settlement trading after Brent ended a string of five consecutive higher finishes and U.S. crude a string of seven straight higher closes.
The Group of 20 finance ministers and central bankers said on Sunday they were "alert to the risks of higher oil prices" and discussed at length the impact that sanctions on Iran will have on crude supplies and global growth.

The G20 officials also said that they welcomed a commitment from producer countries to ensure oil supplies.

The dollar index .DXY strengthened and the euro eased against the U.S. currency, even as the Japanese yen recovered from a nine-month low reached intraday against the dollar. A stronger dollar can weigh on dollar-denominated oil by making it more expensive for consumers using other currencies.

"The energy complex is pulling back about 1 percent ... partially on a softening in the equities and euro," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.

"Weekend G20 meetings also prompted some selling amidst some reluctance to provide more European bailout packages," Ritterbusch added.

Brent April crude fell $1.30 to settle at $124.17 a barrel, but falling as low as $123 post-settlement. Brent ended at a near 10-month peak above $125 a barrel on Friday.

Brent remained on pace to post an 11 percent gain for February and is up nearly 16 percent on the year after a 13.3 percent gain in 2011, raising fears of strains on some of the world's fragile economies, particularly in Europe.

U.S. April crude fell $1.21 to settle at $108.56 a barrel, but slipping to $107.27 in post-settlement trading.

U.S. crude is on pace for a 9 percent gain in February and is up nearly 11 percent in 2012 after rising 8.2 percent last year.

Brent's premium to U.S. crude ended little changed at $15.61 based on settlements, having recovered after falling below $15 intraday.

The spread felt pressure after TransCanada Corp (TRP.TO) said it intends to build the southern leg of its Keystone XL crude oil pipeline, running to Gulf Coast refineries, skirting a full-blown federal review and helping move crude out of the bottlenecked Cushing, Oklahoma, storage hub.

The relative strength index (RSI) for both Brent and U.S. crude retreated under 70 intraday, after starting Monday well above that level. An RSI above 70 signals an overbought condition to investors watching technical indicators.

Total trading volumes were tepid, with U.S. crude turnover 4 percent under and Brent volume 7 percent under their 30-day averages with under an hour left in post-settlement trading.

European equities fell, hit by concern about rising oil prices denting economic growth as Greece's debt troubles continued to unsettle investors. .EU

U.S. equities opened lower after the G20 told Europe it must commit more money to fight the European Union debt crisis before seeking broader assistance, but sliding oil prices helped equities to recover.

The benchmark S&P 500 index closed at its highest level since mid-2008, extending gains for a third straight session, as oil's price slip boosted energy shares and after data showed U.S. pending home sales neared a two-year high in January. .N

Germany's parliament approved a second Greek bailout package despite growing German unease over Greece's ability to implement austerity measures and remain in the euro zone.

Sanctions against Iran over its nuclear program have removed a major supply source for many refiners and investors worry escalating confrontation in the Middle East could disrupt oil flows from other suppliers in the Gulf.
Japan's crude oil imports fell 2.1 percent in January from a year ago and imports from Iran were down 12.2 percent year-on-year, official data showed.

Exports from several smaller producers, including South Sudan, Yemen and Syria, have also been cut off in recent months, tightening supplies to some markets.

But exports from Saudi Arabia and Nigeria have risen and there has also been speculation about a release of U.S. strategic reserves to offset lost Iranian barrels and combat high prices.

(Additional reporting by Gene Ramos in New York, Christopher Johnson in London and Manash Goswami; in Singapore; Editing by Marguerita Choy and Bob Burgdorfer)

Exclusive: Saudi oil boost could calm markets: Senator Schumer

http://news.yahoo.com/exclusive-saudi-oil-boost-could-calm-markets-senator-121052684.html

WASHINGTON (Reuters) - The United States should do more to encourage Saudi Arabia to boost its oil production to make up for lost Iranian oil, Senator Charles Schumer said on Sunday, urging renewed diplomacy as a way to ease the run-up in oil prices.

Tensions surrounding Iran's nuclear program have pushed oil prices to nine-month highs, and U.S. gasoline prices have surged, becoming a top political issue in the run-up to the 2012 presidential elections.

A public promise from Saudi Arabia, the world's top oil exporter, to pump oil at its full capacity would calm oil markets as well as gasoline prices, Schumer, the third-ranking Democrat in the Senate, said in a letter to Secretary of State Hillary Clinton.
In the letter, which was obtained by Reuters, Schumer asked Clinton to urge the Saudi government to increase production to full capacity of 12.5 million barrels per day - an increase of 2.5 million barrels.

That would compensate for a reduction in Iran's total exports of 2.2 million barrels per day. Oil sales from Iran, the third-largest oil exporter, face tough new sanctions as a result of the standoff over its nuclear development.

Gasoline prices in the United States are the highest on record for February. The American Automobile Association (AAA) said the national average price hit $3.65 per gallon on Friday, and analysts say average prices could rise well over $4 per gallon during the peak driving season in coming months.

"These skyrocketing fuel prices are directly linked to the global energy market, particularly Iran's recent efforts to manipulate oil prices and the worry of impacts on supply from an escalation of regional hostilities," Schumer said in the letter.

The United Nation's nuclear watchdog last week warned Iran has stepped up its efforts to enrich uranium. Iran has insisted it is developing nuclear power, not weapons.

The European Union will ban Iranian oil as of July 1, and other buyers will face new U.S. sanctions unless they cut back on purchases.

"These market shifts are now hitting Americans at the pump, reverberating throughout the rest of our economy, and threatening our recovery," Schumer said.

Saudi Arabia has privately reassured customers it will pump more oil, and sharply increased exports in the past week, although it was not clear whether the jump would be sustained.

(Editing by Paul Simao)

Nigeria's April oil exports to jump on new stream

http://www.reuters.com/article/2012/02/24/nigeria-oil-exports-idUSL5E8DO6LV20120224

* Nigerian oil exports seen up almost 5 percent in April

* Loadings about 1.96 mln bpd in April vs 1.87 in March

* Seventy cargoes to load in April, up from 65 in March

* Extra Nigerian oil will help meet any global shortfall

By Christopher Johnson

LONDON, Feb 24 (Reuters) - Nigerian oil exports will jump to their highest level in four months in April as output from a new crude stream starts to flow, traders and shipping sources said on Friday.

The increase in Nigerian oil production, much of it high quality with low levels of contaminants such as corrosive sulphur compounds, will help meet any shortfall from disruptions to supplies from South Sudan, Syria and Yemen.

Africa's top oil producer is expected to sell around 1.96 million barrels per day (bpd) in April in 70 full or part cargoes, up from 1.87 million bpd in 65 cargoes in March, the sources quoted provisional loading programmes as showing.

Nigeria's new Usan offshore oilfield will contribute most of the extra oil in April, pumping almost 100,000 bpd, the programmes show.
The field, operated by France's Total SA, is expected to reach four to five cargoes per month, or about 130,000-160,000 bpd, this year and have a total capacity of up to 180,000 bpd.

Total said on Friday it had started production at Usan on schedule. Traders expected initial volumes to be stored and the first vessels to load in about six weeks.

Total, U.S. major ExxonMobil and commodities trader Glencore will load the first cargoes, totalling almost 3 million barrels. The Total and ExxonMobil cargoes will both be sold by tender, traders said.

FURTHER INCREASE?

Provisional loading programmes are often revised after their initial release and some West African traders believe total crude oil loadings in April could eventually prove to be more than 2 million bpd.

The loading figures for April do not include condensate, which has been running at around 600,000 bpd, traders and officials have said.

Nigerian oil production and exports have been disrupted consistently over the last few years by theft from onshore oil facilities and until recently by attacks on pipelines by anti-government rebels, especially in the Niger Delta, home of some of the older onshore fields.

Royal Dutch Shell declared 'force majeure' on its Nigerian Bonny Light crude oil exports in early January after what a company spokesman said was theft from one of its main oil trunk lines in the Nembe Creek in the Delta.

But attacks and other disruptions have been less frequent over the last year, despite a wave of strikes and protests in January protesting against the removal of fuel subsidies by the government of President Goodluck Jonathan.

Nigeria's key Qua Iboe benchmark crude stream will export about 380,000 bpd in April, up from 368,000 bpd in March. The country's other key crude oil production stream, Bonny Light, will load around 163,000 bpd, up from 156,000 bpd in March.

Gunvor Oil Trader to Build Oil Terminal in Africa

http://en.ria.ru/business/20120224/171507660.html

One of the world's largest oil trading companies Gunvor Group, owned by Russian businessman Gennady Timchenko, will build an oil storage facility and terminal in Sao Tome and Principe, an island country near the western equatorial coast of Central Africa, the Vedomosti business daily newspaper reported on Friday quoting a Gunvor official.

The company, which is registered in the Netherlands, hopes the oil loading terminal will become a regional hub to transport oil from Africa. The Sao Tome terminal will be the first Gunvor terminal outside Russia and the first fully controlled by the company.

The official did not specify the cost of the project and capacities of the terminal.

Market sources told the paper that investment in the project might be from $250 million to $375 million. Gunvor will also face large spending on security of the staff due to political instability in the region.

Oil reserves in Western African states amount to about 58 billion barrels, while daily oil production in the region stands at five million barrels, which equals half the output per day of Russia.