Crude Falls 1% as Oil Contracts Diverge.

http://online.wsj.com/article/SB10001424052970204369404577206861235873608.html

By JERRY A. DICOLO And SARAH KENT

NEW YORK—The world's two most important crude contracts headed in different directions, with the price premium for European crude over U.S. crude growing to the largest level in three months due to rising domestic supplies and concerns of shortages overseas.

The premium for Europe's Brent crude over U.S.-traded West Texas Intermediate oil futures rose to $19.02, the widest gap since November. As recently as Jan. 3, the gap was under $10.

On Monday, light, sweet crude for March delivery settled 93 cents, or 1%, lower at $96.91 a barrel on the Nymex. Brent crude on the ICE futures exchange settled $1.35 higher at $115.93 a barrel.

A glut of oil is re-emerging in the U.S. at the same time supply issues are cropping up in Europe, said Andy Lipow, president of Lipow Oil Associates, an energy consulting firm. Because of pipeline bottlenecks in the U.S. Midwest, U.S. and Canadian oil aren't able to reach areas that are paying more for overseas crude.

"I call it a tale of two cities," said Mr. Lipow.

A confluence of factors has led to the widening spread. In part, it is due to rising supplies in the U.S. Stockpiles of crude oil last week rose to the highest level since mid-December. But the supply concerns overseas have been more important. An impending embargo of Iranian oil from the European Union has led to worries that Europe's oil prices will increase as supplies become tighter. South Sudan also has decided to shut down its oil production amid a furious dispute with Sudan over oil-transit fees—further tightening the European market.

And at the same time, demand in Asia for Europe's oil is also rising.

According to shipping fixtures examined by The Wall Street Journal, at least 12 million barrels of North Sea Forties crude were booked to travel to Asia between December and February, a trading move virtually unheard of before late last year.

Forties crude is the largest component of Dated Brent, the physical oil benchmark that typically trades in line with Brent futures.

"In this way, Dated Brent is acting as a true global benchmark," JBC Energy said in a note published last week.

The situation has motivated traders to return to one of last year's most profitable trades: betting against New York Mercantile Exchange-traded WTI, while betting on a rise in the price of Brent crude traded on the IntercontinentalExchange, or ICE.

"People are foreseeing a move back into the $20s, so there's been some buying of Brent, selling of WTI," said Tony Rosado, a broker at GA Global Markets.

The divide between Brent and Nymex-traded WTI narrowed sharply at the end of 2011 after a decision to reverse the Seaway pipeline from Cushing, Okla., to the U.S. Gulf Coast promised to relieve a supply glut in the middle of the country.

The pipeline is due to begin shipping crude June 1, but more oil is flowing toward Cushing in anticipation of the reversal.

Front-month March reformulated gasoline blendstock, or RBOB, settled 1.35 cents, or 0.5%, higher at $2.9279 a gallon, the highest price since August. March heating oil settled 5.63 cents higher at $3.1707 a gallon.

Write to Jerry A. DiColo at jerry.dicolo@dowjones.com

Syrian army intensifies shelling of Homs

Nigerian Oil Militants, MEND, Strikes Again! Agip Pipeline Bombed!

http://www.thetimesofnigeria.com/TON/Article.aspx?id=3564

Nigeria’s main oil militants operating in Niger Delta region, Movement for the Emancipation of the Niger Delta (MEND) today said its fighters have sabotaged an oil pipeline that belongs to Italian oil company, Agip.

The group, which has been silent for about a year now also claimed responsibilty for the attack at Ogbobagbene in Burutu local government area of Delta State, on the compound of Godsday Orubebe, Minister for Niger Delta two weeks ago.

A statement released by MEND to www.thetimesofnigeria.com and other international media organizations states:

“On Saturday the 4th of February at 1930hrs, fighters of the Movement for the Emancipation of the Niger Delta (M.E.N.D) attacked and destroyed the Agip trunk line at brass in Bayelsa State in the Niger Delta region of Nigeria.

“This relatively insignificant attack is a reminder of our presence in the creeks of the Niger Delta and a sign of things to come.

“We have constantly warned Nigerians about Goodluck Jonathan and his train of idiots running Nigeria. Events of the last few months have vindicated our position on the inability of this moron to lead Nigeria anywhere but downwards.

“Rather than address serious issues facing the nation and its citizens, Goodluck Jonathan squanders public funds on tribalistic sycophants and thugs calling themselves ex-militants.

“Nigerians should disregard the idle threats and ranting of imaginary militant groups and other hired “Jonathan praise singers”. Besides empty talk, they are unable to help Jonathan in any way. In fact most so called ex-militants are hiding in Abuja or Lagos, not venturing near their villages in the Niger Delta.

“Our silence thus far, has been strategic and at the right time, we will reduce Nigerian oil production to zero and drive off our land, thieving oil companies. British petroleum is prepared to pay $25 billion compensation for the Gulf of Mexico oil spillage, yet for worse spillages in the Niger Delta; our people are paid with death at the hands of the Nigerian military.

“In the dark days to come, MTN, SACOIL, and other South African investments will pay a heavy price for the interference of Jacob Zuma in the legitimate fight for justice in the Niger Delta, by its people. The South African President has reduced himself to the position of a hired thug for Goodluck Jonathan.

“The Movement for the Emancipation of the Niger Delta (M.E.N.D) understands the negative impact our assault on the Nigerian oil industry will have on the ordinary citizen in a country which relies almost entirely on one source of revenue.

“Unfortunately, the extremely irresponsible, floundering government of Nigeria is more concerned with enriching themselves and family members than attending to the problems of the Niger Delta and the continuously depreciating standard of living of the ordinary Nigerian.

“A government incapable of managing roads, refineries, power stations and other basic infrastructure is again squandering valuable public funds on a committee tasked with investigating the viability of nuclear energy for electricity generation.

“The government of Nigeria is incapable of safely disposing household refuse. How then do they plan to deal with the toxic by-product of nuclear energy? Nigerians must know that their ignoramus of a president is controlled by Obasanjo, Western nations, an imbecilic wife and an army of sorcerers.

“In this new phase of our struggle for justice, the Movement for the Emancipation of the Niger Delta (M.E.N.D) will pay considerable attention to dealing with security forces and traitorous indigenes of the Niger Delta.

“In this regard, MEND wishes to confirm that our fighters were responsible on the attack at Ogbobagbene in Burutu local government area of Delta State, on the compound of Godsday Orubebe, Minister for Niger Delta.

“The general public is again advised to take very seriously, any warnings of impending bombings. Such warnings will always precede a bombing, providing sufficient time for evacuation.

“Specific members of the security services and the media will in addition to email, receive notification of an impending attack, by SMS in order to minimize the possibility of civilian casualties.” The statement was signed by Jomo Gbomo.

Exclusive: Israel Warns US Jews: Iran Could Strike Here

http://news.yahoo.com/exclusive-israel-warns-us-jews-iran-could-strike-153636488--abc-news.html
Israeli facilities in North America -- and around the world -- are on high alert, according to an internal security document obtained by ABC News that predicted the threat from Iran against Jewish targets will increase.

"We predict that the threat on our sites around the world will increase … on both our guarded sites and 'soft' sites," stated a letter circulated by the head of security for the Consul General for the Mid-Atlantic States, Eliran Avitan. Guarded sites refers to government facilities like embassies and consulates, while 'soft sites' means Jewish synagogues, and schools, as well as community centers like the one hit by a terrorist bombing in Buenos Aires in 1994 that killed 85 people.

The head of Shin Bet, Israel's internal security service, told an audience at a closed forum in Tel Aviv recently that Iran is trying to hit Israeli targets because of what it believes are Israeli attacks on it nuclear scientists. Yoram Cohen said that Iran's Revolutionary Guard, the same militant wing of the government linked to the recent alleged plot against the Saudi ambassador to the U.S., is working tirelessly to attack Israeli and Jewish targets abroad in order to deter Israel.

Local and regional law enforcement and intelligence officials in U.S. and Canadian cities, including New York, Los Angeles, Philadelphia, and Toronto have been monitoring the situation closely for several weeks, and have stepped up patrols at Israeli government locations and Jewish cultural and religious institutions. They have issued awareness bulletins reminding officers to stay vigilant.

Federal officials in those cities told ABC News that they have also increased their efforts to watch for any threat stream pointing to an imminent attack on either Israeli facilities, Jewish cultural or religious institutions or other "soft targets."

"When there is posturing like this, we always pay extra attention to any threat streams," one federal official said.

"The thwarted assassination plot of a Saudi official in Washington, D.C., a couple of months ago was an important data point," added the official, "in that it showed at least parts of the Iranian establishment were aware of the intended event and were not concerned about inevitable collateral damage to U.S. citizens had they carried out an assassination plot on American soil."

"That was an eye opener, showing that they did not care about any collateral damage," the federal official said.

After the disruption of the alleged plot, regional intelligence centers issued bulletins similar to the recent Israeli warning.

"In the past few weeks, there has been an escalation in threats against Israeli and Jewish targets around the world," one regional document noted. "Open source has reported many demonstrations against Israel are expected to be concentrated on Israeli embassies and consulates. Such demonstrations have occurred internationally as well as domestically. These demonstrations could potentially turn violent at local synagogues, restaurants, the Israeli Embassy and other Israeli sites. … Law enforcement should be vigilant when making periodic checks at all Jewish facilities.

And the Israeli bulletin warned that Israel's own passports might be used by terrorists intent on carrying out a plot.

"According to our evaluation there is a possibility that the forged passports will be used in order to pass as Israeli citizens at the security checks in Israel and around the world. Israeli security authorities may consider an Israeli citizenship as a [criterion] to proceed with a more lenient security check in secure sites such as airports, etc.," the letter stated.

Israeli Military Strike Against Iran?

The Israeli security bulletin came in the midst of heated rhetoric on the part of the U.S., Iranian and Israeli political religious and military leadership and follows the recent assassination of a key scientist in Iran's nuclear enrichment program. If the rhetoric is to be believed, there is a deep concern that Israel might launch a military strike against Iran during the spring of 2012.

The intelligence community assessment of that possibility, based on interviews conducted by ABC News, is considerably more nuanced, taking into account as it does the political will of the United States during an election year, the fragile nature of Great Britain's coalition government , the willingness of other allies to join in an offensive, the roles of Russia and China and Saudi Arabia in such a confrontation, and whether Israel would really be willing to launch a unilateral strike.

"But in this situation, the political rhetoric is actually quite important," one official told ABC News. "And that is why the official position -- of the U.S, England, France, Canada, Israel and allies -- is that nothing is off the table."

An apparent shift in the Israeli/U.S. relationship has complicated matters, however, said the official. In the past, Israel would probably have given the U.S. a heads up were it to launch a strike. Now that might not be the case. Among the English-speaking allies of the U.S., say multiple intelligence officials, there is currently a very limited expectation of any early warning.

While much of the public attention has focused on Israel and the rifts within its leadership on how to respond to Iran's nuclear weapons program, the reality for Iran's leadership is also problematic. After threatening to strangle the world oil supply through the straits of Hormuz, Iran "has boxed itself into a corner," said one Western intelligence official. "It would be quite humiliating for them to back down."

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The Israeli security letter sums up the resultant risks very clearly.

"In conclusion, we operate according to the information that Iran and Hezbollah are working hard and with great intensity to release a 'quality' attack against Israeli/Jewish sites around the world."

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Also Read.

Seafarer fatigue research results revealed

http://www.tankeroperator.com/news/todisplaynews.asp?NewsID=3282

Major advances in the scientific understanding of the way in which watchkeeping patterns can affect the sleepiness levels of ships’ officers have been claimed in a new report, following a major research project.

‘Project Horizon’ was an 11-partner European, 32-month research study, part funded by the EU, that brought academic institutions and shipping industry organisations together, with specialist input from some world-leading transport and stress research experts.

The project made use of bridge, engine room and cargo simulators to assess scientifically the impact of fatigue in realistic seagoing scenarios.

The main scenario involved a simulated two round trips between Fawley and Rotterdam on a 40,000 dwt products tanker loaded with two grades of cargo one way and returning in ballast. The two ‘voyages’ lasted for seven days.

A total of 90 certificated deck and engineer officer volunteers with tanker experience participated in rigorous tests at the Gothenburg Chalmers University of Technology and at Warsash Maritime Academy, part of Southampton Solent University, to measure their levels of sleepiness and performance during the most common watchkeeping patterns – four hours on/eight hours off (4/8) and six hours on/six hours off (6/6).

Some of those taking part in Gothenburg were also exposed to a ‘disturbed’ off-watch period, reflecting the way in which seafarers may experience additional workloads, as a result of port visits, bad weather, or emergencies.

The project provided detailed empirical data on watchkeepers’ sleepiness levels working within realistic scenarios, enabling researchers to analyse the impact of sleepiness on decision-making, reaction times and other key performance elements.

Researchers have used the data collected to develop a new fatigue management toolkit (Fatigue Risk Management Systems) for use by shipowners and managers, seafarers, regulators and others, to help arrange working schedules to mitigate risks to ships and their cargoes, seafarers, passengers and the marine environment.

Project co-ordinator Graham Clarke said: “Seafarer fatigue is one of the biggest safety issues in the shipping industry and this research has taken our understanding of the way in which the quality of sleep off-watch affects the sleepiness of watchkeepers on watch to a new and much deeper level.

“It is hoped that the fatigue management toolkit will be a lasting legacy for the sector, providing a resource that, by establishing improved working patterns, will help to enhance the safety of ships and passengers and the welfare of seafarers,” he concluded.

An in-depth look at the key findings will be published in the March issue of Tanker Operator Magazine.

New Jersey Airport without fuel since Q3 2011

http://thefuelhandler.com/index.php?option=com_content&view=article&id=67&Itemid=60&item_id=4517

In Lower Township, New Jersey, US, Cape May Airport has been without jet fuel since the third quarter of last year.

The airport's previous fixed-base operator (FBO), Big Sly Aviation, left on 30 September 2011 and the airport has been without fuel ever since.

However, this could be a catch-22 situation for the airport: it may not receive sufficient traffic for an FBO to be considered economically viable, but without an FBO the airport receives no fuel.

It is thought Cape May Airport's difficulty in keeping an FBO at its site could be the lack of business.

There is an aviation fuel storage tank at Cape May Airport but it is empty.

The Delaware River & Bay Authority, which operates the airport, is now looking for a new FBO for Cape May Airport and hopes to have one in place by 1 May 2012, ahead of the busier summer period.

Glencore and Xstrata in $80 billion merger talks

LONDON (Reuters) - Mining group Xstrata and commodities trader Glencore are in talks over an all-share merger that could create a combined group worth more than 50 billion pounds ($79 billion), shaking up the industry with its biggest deal to date.
Glencore, the world's largest diversified commodities trader, already owns 34 percent of Xstrata and a tie-up between the two Swiss-based companies -- in a deal which would trump Rio Tinto's $38 billion acquisition of Alcan in 2007 -- has long been expected, as Glencore aims to add more mines to its trading clout.
Investors, analysts and sources familiar with the matter say one key concern, after years of informal talks, will be the issue of a premium, with shareholders already signaling a deal will require a sweetener.
But any agreement will hinge on the relationship between the ambitious South African bosses of both companies -- Glencore's Ivan Glasenberg and Mick Davis at Xstrata.
While their two groups have held on-off talks over years, speculation over a tie-up accelerated with Glencore's bumper $10 billion listing last May, which handed Glasenberg the currency for deals. The listing also allowed the market to put a value on Glencore -- a key demand among Xstrata shareholders.
Glencore, a trader of metals, minerals and oil and which also has assets from mines to farmland, said at the time the motivation behind going public after almost four decades as a private company was to seize acquisition opportunities.
But so far its activities have been limited to buying out minorities in Australian nickel producer Minara and seeking control of South African coal miner Optimum.
"These two companies were expected to merge and this is obviously a little bit faster than we had anticipated, but it makes sense given how the companies have performed and the current market positions," said analyst Tim Dudley at brokerage Collins Stewart.
Glencore shares have fallen almost 17 percent since its listing, but have still outperformed the drop in Xstrata.
NEEDED THE CAPITAL
News that Xstrata, the world's fourth-largest diversified miner, had received a concrete approach boosted shares in both companies, sending Xstrata up 13 percent and Glencore over 5 percent in early London trade. Glencore's Hong Kong shares rose as much as 6 percent before trade was suspended.
"It confirms why Glencore went public. They needed the capital to buy other companies," said Ion-Marc Valahu, a fund manager at Geneva-based ClairInvest.
Both sides said there was no certainty an offer would be made and the deal was described as an all-share "merger of equals," which would imply a friendly deal without a control premium. Under UK rules, Glencore now has 28 days to make an offer, though that could be extended at Xstrata's request.
The two sides have little overlap in mining, meaning a combined "Glen-strata" entity would get synergies from some areas of marketing but would otherwise combine industrial and operational assets to create a giant presence in copper and coal, among other commodities.
Xstrata is for example already the world's largest exporter of thermal coal, with interests in over 30 operating coal mines globally, while Glencore is the world's largest trader of seaborne export thermal coal.
Any deal is expected to be agreed, or friendly, meaning Glasenberg and Davis, along with Xstrata shareholders, have to settle on one thing that has so far kept the two apart -- valuation, and what premium Glencore will need to pay.
TOUGH REPUTATION
Davis and his Chairman John Bond, whose appointment last year was widely read as a signal to Glencore given the former HSBC boss's tough reputation, are expected to be resistant to any deal that does not recognize what they see as Xstrata's growth potential, or offer substantial upside for investors.
Glencore, though a shareholder, would not be able to vote on a deal, leaving the decision outside its hands.
"I don't see any scenario where a nil-premium merger will get shareholder approval," said one top-five shareholder, who declined to be named because of the sensitivity of the matter.
"We still haven't seen Glencore's Q4 figures either and there's a bit of concern about the marketing profitability on that number. I'm assuming there's nothing untoward ... but even with that, I would expect to see some degree of premium."
Another shareholder, a top 20 investor who also declined to be quoted, said: "We turned down Glencore at IPO on valuation grounds ... there is no way we will take lower-quality paper without a sizeable premium to reflect the difference in earnings quality."
Xstrata itself made a "merger of equals" bid for Anglo American in 2009, but that failed after Davis refused to offer a premium.
Glencore is not expected to offer a control premium, but it could offer an "equalization" premium to the share price, to better reflect the value of the two companies and their growth options. Xstrata, founded a decade ago, has seen spectacular growth through deals, though it is now focused on organic growth to boost production by 50 percent to 2014.
Glencore's Glasenberg has said he sees value in a deal with Xstrata, while Davis has told analysts the prospect of having both as independently listed firms was "unsustainable."
Another question is who would run the combined entity, with Glasenberg and Davis both in the running for the chief executive's role. Both are expected to remain in some capacity, though Davis is already the industry's longest-serving boss.
If Glencore were to buy all outstanding Xstrata shares at current market prices that would cost around 21 billion pounds.
Xstrata is taking advice from Nomura and Goldman Sachs alongside JP Morgan and Deutsche, the company's corporate brokers, people familiar with the matter said. Glencore has opted for advisers Citigroup and Morgan Stanley, which were also lead banks for Glencore's $10 billion listing last May.
($1 = 0.6306 British pounds)
(Additional reporting by Sinead Cruise, Kate Holton, Sarah Young and Sudip Kar-Gupta in London, with Elzio Barreto in Hong Kong and Sakhti Prasad in Bangalore; Editing by Chris Wickham and David Holmes)