martedì 27 dicembre 2011

2012 oil forecasts


Dec. 27 (Bloomberg) -- Oil traded near the highest settlement in two weeks amid speculation the U.S. economy will continue to recover, bolstering demand for raw materials in the world’s biggest crude consumer.

Futures were little changed after gaining 6.6 percent last week, the most since the five days ending Oct. 28. Reports today may show U.S. consumer confidence improved to a five-month high and home prices in 20 cities declined at a slower pace. Financial markets from Hong Kong to the U.K. and the U.S. were closed for holidays yesterday.

“Economic indicators, especially in the U.S., are improving,” said Tetsu Emori, a commodity fund manager at Astmax Co. in Tokyo, who forecasts oil will trade “more or less” at the $100-level in coming months.

Crude oil for February delivery was at $99.53 a barrel, down 15 cents from the Dec. 23 settlement, in electronic trading on the New York Mercantile Exchange at 9:01 a.m. London time. Prices settled at $99.68 on Dec. 23, the highest closing level since Dec. 13. Futures have climbed 8.9 percent this year after increasing 15 percent in 2010.

Brent oil for February settlement traded 18 cents higher at $108.14 a barrel on the London-based ICE Futures Europe exchange. The European contract’s premium to Nymex crude was $8.61, compared with $8.28 a barrel Dec. 23, the smallest differential based on closing prices since March 8.

Oil Traders Flee

Large traders have pulled out of the oil market in recent weeks, cutting bets to a four-year low as crude climbed above $100 a barrel on rising tension with Iran, then fell on concern over the European economy.

Outstanding contracts among the biggest players in the futures market, including swaps dealers, hedge funds, producers and commercial users, fell by 4.9 percent to 2,207,528 contracts, the lowest since May 2007, in the seven days ended Dec. 20, according to the Commodity Futures Trading Commission’s Commitments of Traders report on Dec. 23.

Saudi Arabia, the world’s largest oil exporter, needs $74 a barrel for its crude exports next year to balance its budget, according to a report from Jadwa Investment Co., a diversified investment business based in Riyadh. That means the kingdom needs prices of about $70 a barrel for West Texas Intermediate and $78 a barrel for Brent, Jadwa said.

Oil rose as high as $101.25 on Dec. 13 after Iran announced plans for military exercises in the Strait of Hormuz, a critical waterway for crude shipments, as the U.S. and its allies threatened to increase sanctions over the Persian Gulf country’s nuclear program. Futures plunged as low as $92.52 three days later on speculation that European economic growth may slow, undermining demand.

--With assistance from Asjylyn Loder in New York, John Buckley in Amsterdam and Wael Mahdi in Cairo. Editors: Alexander Kwiatkowski, John Buckley

To contact the reporters on this story: Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net; Grant Smith in Edinburgh at gsmith52@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

European Stocks


European stocks edged up on Tuesday, catching the tailwind of a pre-holiday U.S. rally, while the euro was hamstrung by the prospect of a large Italian debt auction later in the week. 

Oil prices were buoyed by positive U.S. jobs and housing data late last week as well as the prospect of sanctions against Syria choking off production there. 

At 0920 GMT, the FTSEurofirst 300 index of top European shares was up 0.4 percent at 993.98 points in thin trade. Stock markets in Britain, Hong Kong and Australia remained closed. 

Asian shares eased as investors squared positions before U.S. markets reopen after a long weekend, leaving the MSCI world equity index a touch higher on the day. 

"With U.S. and European players in holiday mood, there is no incentive except for year-end position adjustments," said Hirokazu Yuihama, senior strategist at Daiwa Capital Markets. 

"But concerns about euro zone debt will resurface early next year, with the focus on refinancing needs facing Italy and Spain, and whether sovereign yields of these countries would shoot above levels considered unsustainable," he said. 

MSCI's broadest index of Asia Pacific shares outside Japan slipped 0.3 percent and has shed 17 percent so far this year. It has underperformed the pan-European index, which is down 12 percent. Japan's Nikkei stock average closed down 0.5 percent and has also lost 17 percent this year. 

The euro traded at $1.3070, little changed on the day. A fall below $1.2945, a level touched earlier in the month, would take the single currency to its weakest since January. 

German government bond futures were up 10 ticks due to investors seeking a safe harbour ahead of Thursday's Italian debt auction to raise up to 8.5 billion euros. 

Italian 10-year borrowing costs, at around 7 percent, are viewed as unsustainable in the long-run for a country facing a national debt of around 120 percent of GDP. 

"I think there could be some downside risks for the euro. (Thursday's auction) will be more of a test of the market, given that the bonds auctioned are longer maturities," said Sverre Holbek, currency strategist at Danske in Copenhagen. 

"A further rise in Italian yields should almost certainly be euro negative, and thin liquidity may exacerbate the move." 

HOPES FOR U.S. After upbeat U.S. reports last week, investors will be looking for more positive signs when the S&P Case-Shiller house price index for October and consumer confidence for December are released later on Tuesday. 

U.S. holiday season retail sales were expected to rise 3.8 percent to a record $469.1 billion, the National Retail Federation said, slower than last year's growth but stronger than its pre-season forecast. 

Brisk sales would reinforce signs the U.S. economy is strengthening, following data showing the number of Americans filing new claims for jobless benefits hit a 3-1/2-year low in the week before Christmas while new U.S. single-family home sales rose to a seven-month high. 

The Standard & Poor's 500 Index broke through its 200-day moving average on Friday after a four-day rally lifted the index into positive territory for the year. 

U.S. crude oil futures and gold have been among the top performing assets in 2011, with year-to-date rises of about 9 percent and 12 percent respectively. 

Brent crude rose slightly to trade above $108 on Tuesday, supported by supply disruptions in Syria and Iranian naval exercises in a key shipping lane, while improved U.S. home sales data and year-end short-covering also supported prices. 

Arab League peace monitors headed to the Syrian city of Homs to assess whether Syria has halted a nine-month crackdown on protests against President Bashar al-Assad's rule. Activists said at least 31 people were killed on Monday in the city, which has been under heavy attack by government troops and tanks. 

Syrian Oil Minister Sufian Alao said on Saturday that his country's oil production had fallen by about 30 to 35 percent as a result of sanctions imposed on Syria over its nine-month crackdown on anti-government protests. 

"Syria could be a support factor for the time being, but we will not see a big climb or rocket high prices because of that," Ken Hasegawa, a derivatives manager with brokerage Newedge in Tokyo, said. 

Gold hovered around $1,600 an ounce, as investors stayed on the sidelines in the final week of the year.