Oil Boom Profits

2007-08-19T12:26:00.001-07:00

Unleaded Gasoline closed the week at $1.94, just above the 200 day moving average of $1.91

2007-08-18T12:30:00.000-07:00

XOM closed the week at 84.14, below the 50 day moving average of 85.48

2007-06-18T14:57:00.001-07:00

Chesapeake Energy Corporation (CHK NYSE), an oil and natural gas exploration and production company, broke out to a new multi-year high on Monday. CHK closed at $37.59, it's highest level since hitting $38.86 on October 3, 2005.

2007-06-06T07:41:00.001-07:00

Summary of Weekly Petroleum Data for the Week Ending June 1, 2007

U.S. crude oil refinery inputs averaged nearly 15.4 million barrels per day
during the week ending June 1, down 235,000 barrels per day from the previous
week's average. Refineries operated at 89.6 percent of their operable capacity
last week. Gasoline production dropped slightly compared to the previous week,
averaging over 9.2 million barrels per day, while distillate fuel production
also declined, averaging nearly 4.3 million barrels per day.

U.S. crude oil imports averaged over 10.2 million barrels per day last week, up
222,000 barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged nearly 10.4 million barrels per day, or 147,000
barrels per day more than averaged over the same four-week period last year.
Total motor gasoline imports (including both finished gasoline and gasoline
blending components) last week averaged 1.5 million barrels per day. Distillate
fuel imports averaged 229,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) inched higher by 0.1 million barrels compared to the previous
week. At 342.3 million barrels, U.S. crude oil inventories are just above the
upper end of the average range for this time of year. Total motor gasoline
inventories climbed by 3.5 million barrels last week, but remain well below the
lower end of the average range. Distillate fuel inventories increased by 1.9
million barrels per day, and are just below the upper end of the average range
for this time of year. While heating oil (high-sulfur) inventories were
relatively unchanged, regular diesel fuel (low-sulfur) and ultra-low sulfur
diesel fuel inventories increased. Propane/propylene inventories rose by 1.6
million barrels last week. Total commercial petroleum inventories increased by
3.7 million barrels last week, and are in the middle of the average range for
this time of year.

Total products supplied over the last four-week period has averaged nearly 21.0
million barrels per day, or 2.4 percent above the same period last year. Over
the last four weeks, motor gasoline demand has averaged nearly 9.5 million
barrels per day, or 1.5 percent above the same period last year. Distillate
fuel demand has averaged nearly 4.2 million barrels per day over the last four
weeks, up 2.6 percent compared to the same period last year. Jet fuel demand is
up 0.9 percent over the last four weeks compared to the same four-week period
last year.

2007-06-03T13:36:00.001-07:00

The Oil Service Index had another strong week, closing at $252.25

2007-05-27T16:10:00.000-07:00

The Philadelphia Oil Service Index (OSX) recently broke through a double top when it eclipsed the high of $235.48 set on May 10 2006.

The OSX closed 5-25-07 at $248.40, just off an all time record high of $256.75.

PHLX Oil Service Sector (OSX) Components

2007-05-27T16:05:00.000-07:00

Baker Hughes, Inc. BHI 9.01%
BJ Services Company BJS 3.32%
Cameron International Corporation CAM 7.54%
Global Industries Ltd. GLBL 2.52%
Global Santa Fe Intl. Corp. GSF 7.44%
Halliburton Company HAL 3.99%
Nabors Industries, Inc. NBR 3.83%
Noble Corp. NE 9.88%
National Oilwell Varco, Inc. 9.92%
Rowan Companies, Inc. RDC 4.17%
Transocean, Inc. RIG 10.55%
Smith International, Inc. SII 5.98%
Schlumberger Ltd. SLB 8.77%
Tidewater, Inc. TDW 7.14%
Weatherford Int'l, Inc. WFT 5.94%

2007-04-18T08:23:00.001-07:00

U.S. crude oil refinery inputs averaged over 15.4 million barrels per day during
the week ending April 13, up 372,000 barrels per day from the previous week's
average.  Refineries operated at 90.4 percent of their operable capacity last
week.  Gasoline production increased compared to the previous week, averaging
nearly 8.7 million barrels per day, while distillate fuel production declined
slightly, averaging over 4.2 million barrels per day.

U.S. crude oil imports averaged over 9.9 million barrels per day last week, up
115,000 barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged 9.9 million barrels per day, or 84,000 barrels per day
more than averaged over the same four-week period last year.  Total motor
gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged over 1.0 million barrels per day. Distillate fuel
imports averaged 263,000 barrels per day last week.

Petroleum Inventory Report

2007-04-11T07:37:00.001-07:00

Crude Inventories up 0.7 Million Barrels

Distillates Up 0.1 Million Barrels

Gasoline Inventories down 5.5 Million Barrels

2007-04-10T11:36:00.000-07:00

Oil prices regained some ground Tuesday after sliding nearly $3 barrel the day before on expectations of oversupply at a key North American delivery point.

Light, sweet crude for May delivery rose 50 cents to $62.01 in midday trading on the New York Mercantile Exchange. May Brent at London's ICE Futures exchange also rose 67 cents to $67.26 a barrel.

2007-04-04T08:05:00.001-07:00

Summary of Weekly Petroleum Data for the Week Ending March 30, 2007

U.S. crude oil refinery inputs averaged about 14.8 million barrels
per day during the week ending March 30, down 115,000 barrels
per day from the previous week's average.  Refineries operated at
87.0 percent of their operable capacity last week.  Gasoline
production decreased compared to the previous week, averaging
nearly 8.8 million barrels per day, while distillate fuel production
increased slightly, averaging nearly 4.1 million barrels per day.

U.S. crude oil imports averaged over 10.2 million barrels per day
last week, up 613,000 barrels per day from the previous week.
Over the last four weeks, crude oil imports have averaged over
10.0 million barrels per day, or 196,000 barrels per day more than
averaged over the same four-week period last year.  Total motor
gasoline imports (including both finished gasoline and gasoline
blending components) last week averaged 1.0 million barrels
per day. Distillate fuel imports averaged 375,000 barrels per day
last week.

U.S. commercial crude oil inventories (excluding those in the
Strategic Petroleum Reserve) rose by 4.3 million barrels compared
to the previous week.  At 332.7 million barrels, U.S. crude oil
inventories are above the upper end of the average range for this
time of year.  Total motor gasoline inventories declined by 5.0
million barrels last week, and are in the lower half of the average
range.  Distillate fuel inventories remained unchanged, and are
slightly above the upper end of the average range for this time of
year. Heating oil inventories (high-sulfur) fell last week, while
diesel fuel inventories (the sum of ultra-low and low-sulfur)
inventories reported a modest gain during this same time.
Propane/propylene inventories fell by 0.1 million barrels last week.
Total commercial petroleum inventories decreased by 2.7 million
barrels last week, and are in the upper half of the average range for
this time of year.

Total products supplied over the last four-week period has
averaged nearly 21.0 million barrels per day, or 1.4 percent above
the same period last year. Over the last four weeks, motor gasoline
demand has averaged nearly 9.3 million barrels per day, or 1.7
percent above the same period last year.  Distillate fuel demand has
averaged nearly 4.4 million barrels per day over the last four
weeks, down 1.9 percent compared to the same period last year. Jet
fuel demand is up 3.8 percent over the last four weeks compared to
the same four-week period last year.

2007-03-29T07:34:00.001-07:00

Working gas in storage was 1,511 Bcf as of Friday, March 23, 2007, according to EIA estimates. This represents a net decline of 22 Bcf from the previous week. Stocks were 209 Bcf less than last year at this time and 267 Bcf above the 5-year average of 1,244 Bcf. In the East Region, stocks were 76 Bcf above the 5-year average following net withdrawals of 41 Bcf. Stocks in the Producing Region were 149 Bcf above the 5-year average of 448 Bcf after a net injection of 13 Bcf. Stocks in the West Region were 42 Bcf above the 5-year average after a net addition of 6 Bcf. At 1,511 Bcf, total working gas is within the 5-year historical range.

2007-03-28T07:32:00.001-07:00

Summary of Weekly Petroleum Data for the Week Ending March 23, 2007

U.S. crude oil refinery inputs averaged nearly 15.0 million barrels per day
during the week ending March 23, up 167,000 barrels per day from the previous
week's average.  Refineries operated at 87.0 percent of their operable capacity
last week.  Gasoline production increased slightly compared to the previous
week, averaging over 8.9 million barrels per day, while distillate fuel
production decreased, averaging over 4.0 million barrels per day.

U.S. crude oil imports averaged over 9.6 million barrels per day last week, down
786,000 barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged nearly 9.7 million barrels per day, or 159,000 barrels
per day less than averaged over the same four-week period last year.  Total
motor gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged over 1.1 million barrels per day. Distillate fuel
imports averaged 349,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) fell by 0.9 million barrels compared to the previous week. 
At 328.4 million barrels, U.S. crude oil inventories are above the upper end of
the average range for this time of year.  Total motor gasoline inventories
declined by 0.3 million barrels last week, and are in the upper half of the
average range.  Distillate fuel inventories decreased by 0.7 million barrels,
and are near the upper end of the average range for this time of year.  Most of
the decline was in heating oil inventories (high- sulfur), while diesel fuel
inventories (the sum of ultra-low and low- sulfur) inventories were relatively
unchanged. Propane/propylene inventories fell by 0.7 million barrels last week.
Total commercial petroleum inventories increased by 0.4 million barrels last
week, and are in the upper half of the average range for this time of year.

Total products supplied over the last four-week period has averaged 21.1 million
barrels per day, or 2.4 percent above the same period last year.  Over the last
four weeks, motor gasoline demand has averaged 9.2 million barrels per day, or
1.6 percent above the same period last year.  Distillate fuel demand has
averaged above 4.4 million barrels per day over the last four weeks, unchanged
compared to the same period last year. Jet fuel demand is up 3.8 percent over
the last four weeks compared to the same four-week period last year.

2007-03-21T09:16:00.000-07:00

The U.S. Department of Energy announced its aim to buy up to 4 million barrels of crude oil for the Strategic Petroleum Reserve.

"The Strategic Petroleum Reserve is a critical national asset that bolsters our energy security," Energy Secretary Samuel Bodman said. "By replenishing the Strategic Petroleum Reserve, we can ensure that there are additional supplies of fuel for the American people in cases of severe supply disruption."

The SPR capacity is 727 million barrels and currently holds 689 million barrels. The purchases will occur spread out over the next few months and bids will be accepted based on fair market value.

The department's end goal is to fill the reserves during May, June and July at a rate of 100,000 barrels per day.

The two sites that may receive either some or all of the additional reserves are the West Hackberry, La., site, and the Bryan Mound, Texas, site. Energy Department will accept bids through April 3 and make final decisions by the following week.

The revenue from the emergency sale in 2005 will be used to purchase the replacement barrels for the Strategic Petroleum Reserve.

In the months following Hurricane Katrina in the fall of 2005, 11 million barrels of oil were sold to make up for the losses. These upcoming sales transactions would be the first direct purchase of crude oil for the reserve since 1994.

2007-03-15T07:43:00.001-07:00

Working gas in storage was 1,516 Bcf as of Friday, March 9, 2007, according to EIA estimates. This represents a net decline of 115 Bcf from the previous week. Stocks were 324 Bcf less than last year at this time and 158 Bcf above the 5-year average of 1,358 Bcf. In the East Region, stocks were 35 Bcf above the 5-year average following net withdrawals of 92 Bcf. Stocks in the Producing Region were 103 Bcf above the 5-year average of 461 Bcf after a net withdrawal of 22 Bcf. Stocks in the West Region were 19 Bcf above the 5-year average after a net drawdown of 1 Bcf. At 1,516 Bcf, total working gas is within the 5-year historical range.

2007-03-14T09:36:00.000-07:00

Oil prices inched up Wednesday after a government report showed that crude stocks rose less than expected last week while product inventories fell more than analysts had forecast.

Light, sweet crude for April delivery rose 2 cents to $57.95 a barrel in late morning trading on the New York Mercantile Exchange.

The Brent crude contract for April added 5 cents to $60.95 a barrel on the ICE Futures exchange in London.

The Energy Department reported Wednesday that crude inventories rose last week to 325.3 million barrels, up by 1.1 million barrels, higher than analyst expectations. Analysts polled by Dow Jones Newswires estimated an average gain of 1.4 million barrels.

Meanwhile, gasoline inventories fell by 2.5 million barrels last week, above expectations of a 2.1 million barrel decline. Inventories for distillate stocks – which include heating oil and diesel fuel – fell by 2.8 million barrels, more than estimates of a 1.9 million barrel drop.

Crude, gasoline and distillate inventories are at the upper end of average for this time of year.

The drawdown in gasoline stocks failed to inspire any buying, with gasoline futures edging down less than a penny to $1.9226 a gallon. Heating oil futures gained a fraction of a cent to $1.6935 a gallon.

“Overall, all the numbers are very bullish. There is nothing bearish at all about this report,” said Phil Flynn, an energy analyst at Alaron Trading Corp. in Chicago. “But I think traders are still concerned that the stock market is soft.”

The April crude contract dipped by almost a dollar on Tuesday to settle at $57.93 a barrel following a decline in Wall Street which stirred worries about the U.S. economy and demand for energy.

The Organization of Petroleum Exporting Countries is set to meet on Thursday amid expectations that oil ministers would opt to keep output steady.

In other Nymex trading, natural gas prices rose 8.6 cents to $6.978 per 1,000 cubic feet.

2007-03-13T06:44:00.001-07:00

Oil rose after the International Energy Agency said oil stockpiles in industrialized countries are headed for their biggest decline in 10 years this quarter because of cold February weather and OPEC's supply cuts.

Crude supplies in the 30 member states of the Organization for Economic Cooperation and Development fell by 1.26 million barrels a day in January and February, the IEA said today in its monthly report. U.S. gasoline stockpiles probably fell 2.45 million barrels in the week ended March 9, according to a Bloomberg News survey of 12 analysts before a Department of Energy report tomorrow.

2007-03-08T07:37:00.001-08:00

Working gas in storage was 1,631 Bcf as of Friday, March 2, 2007, according to EIA estimates. This represents a net decline of 102 Bcf from the previous week. Stocks were 268 Bcf less than last year at this time and 194 Bcf above the 5-year average of 1,437 Bcf. In the East Region, stocks were 70 Bcf above the 5-year average following net withdrawals of 78 Bcf. Stocks in the Producing Region were 113 Bcf above the 5-year average of 473 Bcf after a net withdrawal of 6 Bcf. Stocks in the West Region were 12 Bcf above the 5-year average after a net drawdown of 18 Bcf. At 1,631 Bcf, total working gas is within the 5-year historical range.

2007-03-07T08:52:00.000-08:00

Oil prices jumped by more than $1 per barrel Wednesday, after the U.S. government reported an unexpected drop in crude oil inventories last week.

Light, sweet crude for April delivery surged $1.12 to $61.81 a barrel in morning trading on the New York Mercantile Exchange.

Brent crude for April delivery spiked $1.01 to $62.40 a barrel on London's ICE Futures Exchange.

The U.S. Energy Information Administration said crude oil stockpiles fell by 4.8 million barrels to 324.2 million barrels last week. Analysts, on average, had been expecting an increase in crude inventories of 2 million barrels, according to a Dow Jones Newswires survey.

Total gasoline inventories fell by 3.8 million barrels to 216.4 million barrels, a sharper decline than the 1.4 million barrel drop that analysts had expected.

Distillate fuel inventories, which include diesel and heating oil, fell by 1.3 million barrels to 123.2 million, compared with the 2.3 million barrel slide analysts had expected.

Heating oil futures rose 2.07 cents to $1.768 a gallon and natural gas gained less than a penny to $7.475 per 1,000 cubic feet. Gasoline futures rose 2.92 cents to $1.8825.

Also buoying crude prices was a U.S. Energy Information Administration's short-term energy outlook released Tuesday. The EIA predicted that oil demand will be 2.7 percent higher in the first quarter of 2007 than the same period a year ago, and that natural gas demand will surge 11 percent this year from 2006.

Cold Blast In N.E...........Natural Gas & Heating Oil Use To Spike

2007-03-05T17:16:00.000-08:00

Bitterly cold winds will buffet the Northeast Tuesday, especially eastern New York state and New England. Wind chill temperatures, mainly in the morning, will be dangerously low.

A few snow showers or flurries will fly in Upstate New York and northern New England, but no important accumulations are likely.

High temperatures will be far below early March expectations with readings--not factoring in wind chill-- ranging from the single digits in much of New York state and northern New England to the 40s across southern Virginia.

2007-03-01T07:36:00.001-08:00

Working gas in storage was 1,733 Bcf as of Friday, February 23, 2007, according to EIA estimates. This represents a net decline of 132 Bcf from the previous week. Stocks were 263 Bcf less than last year at this time and 179 Bcf above the 5-year average of 1,554 Bcf. In the East Region, stocks were 71 Bcf above the 5-year average following net withdrawals of 98 Bcf. Stocks in the Producing Region were 91 Bcf above the 5-year average of 501 Bcf after a net withdrawal of 24 Bcf. Stocks in the West Region were 16 Bcf above the 5-year average after a net drawdown of 10 Bcf. At 1,733 Bcf, total working gas is within the 5-year historical range.

2007-02-25T13:19:00.000-08:00

The International Energy Agency's monthly report for January raised this year's oil demand forecasts.

On the supply side, the report indicates that OPEC (minus Angola) produced less in January from one month earlier. However, these production cuts were offset by higher output from the former Soviet Union. In fact, the world oil supply has increased by 175,000 barrels per day in January to a new total of 85.5 million barrels per day. Lastly, because of the new shift of Angolan production into OPEC's numbers, there was large downward revision to non-OPEC production for 2007.

Primarily on the upward revision to demand forecasts we view the latest report as modestly supportive for oil prices. The downward revision to '07 non-OPEC supply is also supportive. Though OPEC continues to make strides in cutting production, the main challenge ahead for the producer group is how to quickly integrate Angola which will be brought into OPEC's quota system in the second quarter of this year.

2007-02-22T07:34:00.001-08:00

Working gas in storage was 1,865 Bcf as of Friday, February 16, 2007, according to EIA estimates. This represents a net decline of 223 Bcf from the previous week. Stocks were 296 Bcf less than last year at this time and 182 Bcf above the 5-year average of 1,683 Bcf. In the East Region, stocks were 87 Bcf above the 5-year average following net withdrawals of 151 Bcf. Stocks in the Producing Region were 84 Bcf above the 5-year average of 532 Bcf after a net withdrawal of 60 Bcf. Stocks in the West Region were 12 Bcf above the 5-year average after a net drawdown of 12 Bcf. At 1,865 Bcf, total working gas is within the 5-year historical range.

2007-02-20T08:24:00.001-08:00

Oil prices fell Tuesday following forecasts of warmer weather in the United States.

The northeastern part of the country, which accounts for 80 percent of the nation's heating oil demand, should have above-normal temperatures through early March, the National Oceanic and Atmospheric Administration said.

"The market's melting down has a lot to do with the snow melting," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

The March contract for light, sweet crude, which was to expire later Tuesday, fell 79 cents to US$57.74 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Europe. On London's ICE futures exchange, April Brent crude oil futures fell 94 cents to US$57.20 a barrel.

Heating oil futures fell more than 3 cents to US$1.6205 a gallon on the Nymex, while natural gas prices dropped more than 22 cents to US$7.294 per 1,000 cubic feet.

Traders were also watching for news after a weekend fire that caused the shutdown of a U.S. refinery, and the kidnapping of three Eastern European oil workers in Nigeria.

Valero Energy Corp. was uncertain when production would resume at its 158,000-barrel-a-day McKee refinery in Sunray, Texas, which was shut down due to a weekend fire, spokeswoman Mary Rose Brown said Monday.

2007-02-15T07:38:00.001-08:00

Working gas in storage was 2,088 Bcf as of Friday, February 9, 2007, according to EIA estimates. This represents a net decline of 259 Bcf from the previous week. Stocks were 193 Bcf less than last year at this time and 268 Bcf above the 5-year average of 1,820 Bcf. In the East Region, stocks were 151 Bcf above the 5-year average following net withdrawals of 179 Bcf. Stocks in the Producing Region were 109 Bcf above the 5-year average of 567 Bcf after a net withdrawal of 68 Bcf. Stocks in the West Region were 8 Bcf above the 5-year average after a net drawdown of 12 Bcf. At 2,088 Bcf, total working gas is within the 5-year historical range.

2007-02-14T09:14:00.001-08:00

Oil prices fell Wednesday after the government's inventory report showed a surprise drop in gasoline and crude supplies but a less-than-expected draw in distillates used to make heating oil.

U.S. light crude for March delivery dropped $1.16 to $57.90 a barrel on the New York Mercantile Exchange. Oil rose immediately following the report before falling to current trading levels.

In its weekly inventory report, the Energy Information Administration said distillates, used to make heating oil and diesel fuel, declined by 3 million barrels last week. Analysts were looking for a decline of 4.2 million barrels, according to Reuters.

But crude stocks posted a surprise decline, falling by 600,000 barrels, while gasoline supplies declined by 2 million barrels.

Analysts were looking for a gain of 1.2 million barrels in crude stocks and a 1.9 million barrel addition to gasoline supplies.

Oil prices started out the year with a steep selloff, briefly falling below $50 a barrel as a mild winter swelled heating oil supplies and doubts lingered about OPEC's ability to cut production. The drop below $50 was 36 percent below oil's all-time non inflation adjusted trading high of $78.40 reached last July.

2007-02-12T08:18:00.001-08:00

Oil prices fell back from the $60-a-barrel mark Monday as the market anticipated a supply surplus in the second quarter and following a suggestion that OPEC is unlikely to further cut production.

On Friday, prices climbed briefly above the psychological $60 barrier on unrelenting cold U.S. weather.

But light, sweet crude for March delivery was down 84 cents to $59.05 a barrel in electronic trading on the New York Mercantile Exchange by afternoon in Europe. Brent crude for March dropped $1.13 to $57.88 a barrel at London's ICE Futures exchange.

Hasan Qabazard, head of research for the Organization of Petroleum Exporting Countries, on Monday forecast a global surplus of crude supply over demand of some 300,000 barrels a day in the April-June quarter. The International Energy Agency has predicted a 2 percent drop in world oil consumption in the second quarter.

In an interview with The Wall Street Journal in Riyadh this weekend, Saudi oil minister Ali Naimi suggested that the cartel was not looking to make further production cuts.

The world oil market is in “much, much better health and balance,” and Saudi Arabia's production is currently 8.5 million-8.6 million barrels a day, about 1 million barrels a day lower than six months ago, he said.

“If you are asking me are we going to take additional cuts or increase supply, I do not know,” said Naimi, the oil cartel's de facto leader. “But, most probably if the trend is like what it is like today, with the market getting in much, much better health and balance, there may not be any reason to change.”

2007-02-08T07:39:00.001-08:00

Working gas in storage was 2,347 Bcf as of Friday, February 2, 2007, according to EIA estimates. This represents a net decline of 224 Bcf from the previous week. Stocks were 26 Bcf less than last year at this time and 378 Bcf above the 5-year average of 1,969 Bcf. In the East Region, stocks were 238 Bcf above the 5-year average following net withdrawals of 139 Bcf. Stocks in the Producing Region were 137 Bcf above the 5-year average of 607 Bcf after a net withdrawal of 63 Bcf. Stocks in the West Region were 3 Bcf above the 5-year average after a net drawdown of 22 Bcf. At 2,347 Bcf, total working gas is within the 5-year historical range.

2007-02-07T09:35:00.001-08:00

Outgoing BP chief John Browne may have sought to ease his successor's transition by slashing production growth projections for the next several years, analysts said Tuesday.

The news that production would be flat — a reversal from 4 percent annual growth targets — came as the company announced a 22 percent drop in its fourth-quarter profit amid lower oil and natural gas prices and increased spending to improve safety.

BP also announced a 1.3 percent drop in year-end 2006 profit despite record-high oil prices that surpassed $77 a barrel last summer.

"Overall, '07 will be a year to get back on track," Browne said Tuesday.

John Parry, an analyst with John S. Herold, called the lower production projection "a dose of reality" for the market six months before BP exploration and production head Tony Hayward succeeds Browne as CEO.

"I think they didn't want to have him climb too steep a ladder to please the investment community," Parry said. "They decided to set Tony Hayward up with less of an obstacle course to achieve."

Hayward called 2006 "a disappointing year" with production that fell 5 percent to 3.8 million barrels of oil equivalent per day.

An oil spill prompted the temporary shutdown of half the production at the Prudhoe Bay, Alaska, oil field BP operates. North Sea operations underperformed. And the company faces continued delays in getting two key Gulf of Mexico oil platforms on line.

2007-02-06T10:17:00.000-08:00

Oil gave up early gains on Tuesday, steadying near $59 a barrel, as a cold snap in top consumer the United States failed to ignite the heating oil market and a $1 rally ran out of steam.

The onset of cold weather in the U.S. Northeast, the world's biggest heating oil market, and a shift in investment flows has lifted oil from a 20-month low of $49.90 on Jan. 18 and brought it into the danger zone for consumer nations' economies.

U.S. crude oil was up 16 cents at $58.90 a barrel by 1641 GMT, having earlier touched a one-month high of $59.99. London Brent crude was up 22 cents to $58.32.

"The market is looking for leadership in winter fuels and when heating oil didn't scream, but instead slipped from its early high and natural gas dropped, the run toward $60 could not be sustained," said Andrew Lebow, a broker at Man Financial.

2007-02-05T12:42:00.000-08:00

Natural gas and crude oil prices edged up Monday on expectations of colder weather in major U.S. markets.

Light, sweet crude for March delivery rose 10 cents to $59.10 a barrel in early afternoon trading on the New York Mercantile Exchange. Brent crude for March delivery on the ICE Futures exchange inched up 2 cents to $58.43 a barrel.

Natural gas futures gained nearly 17 cents to $7.644 per 1,000 cubic feet.

"The weather is what's the most urgent, short-term issue here," said Tim Evans, an energy analyst at Citigroup Global Markets. "Over the weekend, the weather forecast became a lot colder for the six to 10 day period as well as the 11 to 15 day period."

Colder-than-normal temperatures blanketed the Northeast and Midwest on Monday and were expected to linger through Feb. 18, according to the National Weather Service. On Monday, temperatures registered in the single-digits and teens from Maryland to Maine, while many states in the Midwest were experiencing below zero temperatures with dangerous wind chills.

2007-02-01T08:17:00.000-08:00

Working gas in storage was 2,571 Bcf as of Friday, January 26, 2007, according to EIA estimates. This represents a net decline of 186 Bcf from the previous week. Stocks were 152 Bcf higher than last year at this time and 454 Bcf above the 5-year average of 2,117 Bcf. In the East Region, stocks were 283 Bcf above the 5-year average following net withdrawals of 120 Bcf. Stocks in the Producing Region were 165 Bcf above the 5-year average of 642 Bcf after a net withdrawal of 45 Bcf. Stocks in the West Region were 6 Bcf above the 5-year average after a net drawdown of 21 Bcf. At 2,571 Bcf, total working gas is above the 5-year historical range.

2007-01-30T12:20:00.000-08:00

Crude oil surged to its biggest gain in 16 months on speculation that colder weather and an improving economy will spur U.S. fuel consumption.

The National Weather Service predicted that below-normal temperatures will persist in the eastern U.S. for the next two weeks, and the price of natural gas, the country's most common home-heating fuel, jumped 11 percent. Consumer confidence in the U.S., where 25 percent of the world's oil is consumed, neared a five-year high, a report today showed.

``It's finally gotten cold, which will boost demand for natural gas and heating oil,'' said Bill O'Grady, director of fundamental futures research at A.G. Edwards & Sons in St. Louis. ``There's been a steady stream of good economic news in the U.S. It's gotten to a point where the energy markets can no longer shrug off the economic numbers.''

Crude oil for March delivery rose $2.91, or 5.4 percent, to $56.92 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. A settlement at that price would be the biggest one-day gain since Sept 19, 2005. Futures touched $57.05, the highest since Jan. 8. They are 17 percent lower than a year ago.

Brent crude oil for March settlement increased $2.71 to $56.39 a barrel on the London-based ICE Futures exchange.

2007-01-29T07:48:00.000-08:00

Oil prices fell Monday despite forecasts of continued cold weather across the U.S. East Coast, a major market for heating oil.

An unusually warm winter in the U.S. drove crude oil below $50 a barrel earlier this month, but the price has since risen about 10 percent as cold weather returned. Forecasters predicted below-normal temperatures on the U.S. East Coast region would continue into at least the first week of February.

"The continuation of cold weather in the United States -- after a pretty warm start of the winter -- helps shore up prices because if there was no cold weather at all, there would be huge inventories," said Tobin Gorey, a commodity strategist with the Commonwealth Bank of Australia in Sydney. "The market's not worried about that any longer."

Light, sweet crude for March delivery on the New York Mercantile Exchange fell 34 cents to $55.08 a barrel in electronic trading by early afternoon in Europe. The contract had risen $1.19 on Friday.

2007-01-28T14:05:00.000-08:00

Oil prices rose more than US$1 to settle above US$55 a barrel on Friday on concerns that producers were complying with OPEC's production cuts and on expectations of continued blustery weather in the northeastern US.

Light, sweet crude for March delivery on the New York Mercantile Exchange rose US$1.19 to settle at US$55.42 a barrel. In a volatile week of trading, oil prices have climbed nearly 6.6 percent after dipping below US$50 a barrel last week.

On the ICE Futures exchange in London, Brent crude settled at US$55.29 a barrel, up US$1.17.

Tank tracker Lloyds Marine Intelligence Unit said on Friday that oil exports from OPEC fell to less than 23 million barrels a day last month from just under 24 million barrels a day in November, according to a Dow Jones newswire report.

Saudi Arabia, the world's largest crude oil producer and exporter, was the quickest to implement OPEC's production cuts; its exports last month were 1.1 million barrels a day lower than before the OPEC's October call for production cuts.

"The market has been concerned about the rate of OPEC compliance. Yesterday, it was worried compliance was bad. Today, it's worried that it's good," said Tim Evans, an energy analyst at Citigroup Global Markets. "Overall, the larger story is that OPEC production is declining."

OPEC said it would begin cutting production by 1.2 million barrels a day in November, but some traders speculated that cartel members were not complying. The cartel said late last year it planned to cut production an additional 500,000 barrels a day starting on Feb. 1.

On Thursday, tanker tracker Oil Movements said it expects exports from OPEC to rise in mid-February. The news sent oil prices down to settle at US$54.23 on Thursday, after rising as high as US$55.90 during earlier trading.

"The market has overcome that tracker report," said Phil Flynn, an analyst at Alaron Trading Corp in Chicago. "The market is thinking that OPEC compliance will be better as we go forward. Oil is looking very strong."

Victor Shum, energy analyst with Purvin & Gertz in Singapore, also pointed out that prices are being propped up by cold weather in the US and the announcement on Tuesday that the US government plans to double the size of its Strategic Petroleum Reserve.

"If you look at trading this week, the market has found some support above the US$50-a-barrel price mark. It appears to have found a floor due to a number of factors," Shum said.

Earlier this month, crude fell to US$50 a barrel, but it rose about 10 percent over the past week as cold weather gripped the northeastern US, a major consumer of heating oil.

2007-01-26T10:34:00.000-08:00

Oil rose on speculation colder weather will increase the use of heating fuel in the U.S. just as OPEC starts to pump less crude.

Heating demand in the U.S. Northeast, the nation's biggest heating-oil consuming region, will be 14 percent above normal through Feb. 1, said Weather Derivatives, a forecaster in Belton, Missouri. The Organization of Petroleum Exporting Countries, the producer of about 40 percent of the world's crude, last month agreed to cut output by 500,000 barrels a day starting Feb. 1.

2007-01-25T07:50:00.000-08:00

Working gas in storage was 2,757 Bcf as of Friday, January 19, 2007, according to EIA estimates. This represents a net decline of 179 Bcf from the previous week. Stocks were 251 Bcf higher than last year at this time and 472 Bcf above the 5-year average of 2,285 Bcf. In the East Region, stocks were 291 Bcf above the 5-year average following net withdrawals of 75 Bcf. Stocks in the Producing Region were 170 Bcf above the 5-year average of 682 Bcf after a net withdrawal of 61 Bcf. Stocks in the West Region were 11 Bcf above the 5-year average after a net drawdown of 43 Bcf. At 2,757 Bcf, total working gas is above the 5-year historical range.

2007-01-24T10:48:00.000-08:00

Crude oil fell, paring yesterday's 4.7 percent gain, after an Energy Department report showed that the U.S. has ample fuel inventories.

Crude-oil supplies rose 789,000 barrels to 322.2 million last week, according to the report. Stockpiles of distillate fuel, which include heating oil and diesel, climbed 750,000 barrels to 142.6 million, the report showed. Yesterday, prices jumped the most since September 2005 after the U.S. said it would double the Strategic Petroleum Reserve by 2027.

2007-01-23T07:11:00.000-08:00

Crude oil rose as cold weather spurred heating demand in the U.S. and militants took 26 hostages in Nigeria, threatening supplies from Africa's largest producer.

Temperatures are likely to fall below normal in the eastern U.S. during February as an El Nino weather pattern weakens, according to the Climate Prediction Center in Camp Springs, Maryland. In Nigeria, kidnappers seized 24 Filipinos, an American and a Briton, according to Nigerian and Philippine authorities.

The price of oil ``turned positive because there's colder weather,'' said Christopher Bellew, a broker with Bache Financial Ltd. in London. ``We should see drawdowns in heating oil inventories,'' he said.

Crude oil for March delivery rose as much as 97 cents, or 1.8 percent, to $53.55 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $53.33 at 2:52 p.m. in London. Brent crude oil for March gained as much as $1.03, or 2 percent, to $53.73 a barrel in electronic trading on the ICE Futures exchange in London and traded at $53.50.

2007-01-22T08:11:00.000-08:00

Crude oil rose on forecasts for colder U.S. weather over the next two weeks that would increase demand for heating fuels.

Heating use in the Northeast, the region responsible for 80 percent of U.S. heating-oil consumption, will be 7 percent above normal in the week ending Jan. 29, Belton, Missouri-based forecaster Weather Derivatives said. Warmer-than-normal weather curbed demand for heating fuels, contributing to a 13 percent plunge in oil prices so far this year.

``The change in the weather is supporting crude oil and all of the other energy markets,'' said Eric Wittenauer, an energy analyst at A.G. Edwards & Sons Inc. in St. Louis. ``It's not going to get above freezing in much of the East today, which will boost heating-oil consumption.''

Crude oil for February delivery rose $1.16, or 2.2 percent, to $53.15 a barrel at 10:27 a.m. on the New York Mercantile Exchange. Futures touched $49.90 on Jan. 18, the lowest since May 25, 2005. Prices are 22 percent lower than a year ago.

2007-01-18T07:37:00.000-08:00

Summary of Weekly Petroleum Data for the Week Ending January 12, 2007

U.S. crude oil refinery inputs averaged 15.1 million barrels per day during the
week ending January 12, down 502,000 barrels per day from the previous week's
average. Refineries operated at 87.9 percent of their operable capacity last
week. Gasoline production declined last week compared to the previous week,
averaging over 9.1 million barrels per day, while distillate fuel production
decreased significantly, averaging 4.0 million barrels per day.

U.S. crude oil imports averaged nearly 11.1 million barrels per day last week,
up nearly 1.6 million barrels per day from the previous week. Over the last four
weeks, crude oil imports have averaged nearly 10.0 million barrels per day, or
73,000 barrels per day more than averaged over the same four-week period last
year. Total motor gasoline imports (including both finished gasoline and
gasoline blending components) last week averaged over 1.0 million barrels per
day. Distillate fuel imports averaged 277,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) jumped by 6.8 million barrels compared to the previous week.
At 321.5 million barrels, U.S. crude oil inventories are above the upper end of
the average range for this time of year. Total motor gasoline inventories rose
by 3.5 million barrels last week, and are at the upper end of the average range.
Distillate fuel inventories increased by 0.9 million barrels, and remain above
the upper end of the average range for this time of year. Increases were seen
in both high-sulfur distillate fuel (heating oil) inventories and diesel fuel
inventories (a combination of ultra-low-sulfur and low-sulfur). Total
commercial petroleum inventories climbed by 9.0 million barrels last week, and
are above the upper end of the average range for this time of year.

Total products supplied over the last four-week period has averaged over 20.2
million barrels per day, or 3.5 percent less than averaged over the same period
last year. Over the last four weeks, motor gasoline demand has averaged nearly
9.2 million barrels per day, or 1.2 percent above the same period last year.
Distillate fuel demand has averaged over 4.1 million barrels per day over the
last four weeks, or 3.6 percent below the same period last year. Jet fuel demand
is down 1.7 percent over the last four weeks compared to the same four-week
period last year.

2007-01-17T08:10:00.000-08:00

Oil fell to a 20-month low Wednesday, within striking distance of the psychologically key $50 mark, as top exporter Saudi Arabia saw no reason to worry over the market's 18 percent slide so far this month.

U.S. crude futures tumbled to an intraday low of $50.28 a barrel, the lowest level since May 25, 2005. By 8:15 a.m. ET, the February contract traded 83 cents lower at $50.38.

2007-01-16T08:38:00.000-08:00

Oil prices slumped Tuesday after OPEC powerhouse Saudi Arabia reportedly said there was no need for further production cuts to prop up the market.

The comments, by Saudi Oil Minister Ali Naimi, added to growing sentiment that the Organization of Petroleum Exporting Countries would not call a special meeting any time soon to discuss further production cutbacks to stem a more than 13-percent slide in prices this year.

"There is no need now (for further cuts) on the basis of what market conditions are," Dow Jones Newswires quoted Naimi as saying after arriving in New Delhi for an international conference organized by India's Oil Ministry.

Benchmark light sweet crude plummeted $1.43 to $51.56 in morning trading on the New York Mercantile Exchange, after hitting a new 19-month intraday low of $51.25. The price was being compared with Friday's Nymex settlement as the exchange was closed Monday for the Martin Luther King Jr. holiday.

February Brent crude on London's ICE Futures exchange fell 76 cents to $52.36 on Tuesday on London's ICE futures exchange.

Heating oil futures slid nearly 2 cents to trade at $1.4860 per gallon; gasoline futures fell 4.3 cents to $1.3890; and natural gas futures dropped 2.9 cents to $6.572 per 1,000 cubic feet.

2007-01-12T06:40:00.000-08:00

Crude oil rose from a 19-month low in New York after some traders said this week's drop in oil prices wasn't justified. Some analysts expect OPEC's members to cut production to stop prices from declining.

Crude oil fell 6.4 percent this week in New York as mild weather in the U.S. Northeast, the region that consumes the most heating oil, cut demand. OPEC President Mohamed al-Hamli said yesterday's drop below $53 a barrel was ``unacceptable'' and urged members to comply with the cuts in output they had promised to make in November and in February.

``The supply sides are going to remain tight,'' said Greg Smith, the U.K. managing director of the investment advisers Fat Prophets U.K. Ltd. ``OPEC can be successful in getting that price up, certainly getting it back towards $60 a barrel.''

Crude oil for February delivery rose as much as $1.06, or 2 percent, to $52.94 a barrel in after-hours electronic trading on the New York Mercantile Exchange, its first gain this week. The contract traded at $52.34 at 12:58 p.m. in London.

Brent crude oil for February settlement climbed as much as $1.24, or 2.4 percent, to $52.94 a barrel in electronic trading on the ICE Futures exchange and traded at $52.36 in London.

Some analysts and brokers expect a forecast for colder weather next week to push prices higher. Colder weather will reach the northeastern U.S. Jan. 17 through Jan. 21, according to the U.S. National Weather Service. Temperatures in the region were milder than normal through the first part of winter. New York had its third-warmest December on record.

``The temperature is expected to drop below normal after'' the next five days, said Michael Davies, an analyst in London with broker Sucden (U.K.) Ltd. ``Many traders are expecting OPEC to take action in order to support prices.''

2007-01-11T07:37:00.000-08:00

Working gas in storage was 3,025 Bcf as of Friday, January 5, 2007, according to EIA estimates. This represents a net decline of 49 Bcf from the previous week. Stocks were 401 Bcf higher than last year at this time and 461 Bcf above the 5-year average of 2,564 Bcf. In the East Region, stocks were 241 Bcf above the 5-year average following net withdrawals of 28 Bcf. Stocks in the Producing Region were 182 Bcf above the 5-year average of 751 Bcf after a net withdrawal of 9 Bcf. Stocks in the West Region were 38 Bcf above the 5-year average after a net drawdown of 12 Bcf. At 3,025 Bcf, total working gas is above the 5-year historical range.

2007-01-10T09:01:00.000-08:00

Chevron Corp.'s fourth-quarter results will be hurt by a drop in realized crude oil prices, lower production and weaker profit from its refining business, the company warned late Tuesday.

Shares of the nation's second-largest integrated oil company fell 67 cents in Wednesday morning trading to $69.95.

Wall Street doesn't expect Chevron to top its third-quarter or year-ago results in the fourth quarter. The company reported net income of $5.02 billion, or $2.29 per share, on revenue of $54.21 billion in the third quarter, and $1.86 per share in the year-ago period.

Analysts polled by Thomson Financial are looking for profit of just $1.82 per share in the current fourth quarter.

The market price of crude declined during the fourth quarter, and Chevron's average realized prices fell as well.

In the U.S., Chevron saw its average realized crude price drop from both the third and year-ago quarters to $52.26 a barrel. Average realized crude prices were 18 percent higher in the third quarter at $63.98 and slightly higher in the fourth quarter of 2005 at $52.87.

Natural gas prices fell by roughly half year over year. Chevron estimates its average realized gas price slid to $5.42 from $10.22 per 1,000 cubic feet a year ago and $5.93 in the third quarter.

Chevron estimates it has produced 766,000 barrels of oil equivalent in the fourth quarter through November, up from 717,000 barrels in the year-earlier period but lower than the 772,000 barrels produced in the third quarter.

U.S. production of oil liquids and natural gas fell almost 1 percent from the third quarter, Chevron said, due to planned maintenance and construction activity, particularly in the Gulf of Mexico. International production declined about 3 percent at the same time.

On the refining side, scheduled downtime reduced output in the quarter. Refining margins -- or the spread between the cost of crude oil and the sale price of refined products -- narrowed in the fourth quarter, which is expected to result in weaker profit from the segment.

Chevron noted that its estimates are based on the first two months of the quarter, and fourth-quarter results may differ substantially from its outlook. The company plans to release its quarterly results on Feb. 2.

2007-01-08T06:56:00.000-08:00

Crude oil rose for a second day on speculation that falling temperatures in the U.S. may boost heating demand in the world's largest energy consumer and as Russian supplies to Poland and Germany were curtailed.

Up to six inches of snow may fall today in parts of the U.S. Northeast, where four-fifths of the country's heating oil is burned, according to forecasting service Accuweather.com. Russian crude oil deliveries to Poland and Germany along a million barrel- a-day pipeline were halted following a dispute between Russia and Belarus, according to the Polish pipeline operator.

``The weather is the main driver of the market now,'' said Gerrit Zambo, an oil trader at BayernLB in Munich. ``Even small signs of cooler temperatures can bring prices back up toward the $60 a barrel region.''

Crude oil for February delivery rose as much as $1.41, or 2.5 percent, to $57.72 a barrel on the New York Mercantile Exchange and traded at $57.46 at 2:41 p.m. London time. Brent crude oil gained $1.35 to $56.99 a barrel on the London-based ICE Futures exchange.

Polish pipeline operator PERN Przyjazn SA and Grupa Lotos SA, Poland's second-largest refiner, said supplies via the Druzhba pipeline that transports Russian crude through Belarus were cut off last night. The Polish segment of the pipeline carries about 50 million tons of oil a year, including 27 million tons to German refiners.

U.S. Weather

Temperatures may drop below normal in the western U.S. this week and cooler weather will spread across most of the country until Jan. 20, according to the National Weather Service.

New York-traded crude rose 72 cents, or 1.3 percent, to $56.31 a barrel on Jan. 5 after dropping almost 9 percent the previous two sessions. Prices fell last week amid mild weather in the U.S. Northeast and after U.S. fuel inventories climbed more than expected.

Last week's price decline was the biggest since April 2005. The price of oil has plunged about 27 percent from the record $78.40 a barrel reached July 14 after Israeli forces invaded Lebanon to fight Hezbollah militants.

``The next move is likely to be back up again,'' said Adam Sieminski, chief energy economist at Deutsche Bank AG in New York. ``There could be rising hysteria in OPEC because a number of the countries like Iran and Venezuela have been spending like oil was going to stay at $70 a barrel.''

The Organization of Petroleum Exporting Countries agreed to cut output by 1.2 million barrels a day in November, citing slower-than-forecast demand growth and rising global stockpiles. Members agreed in December to cut another 500,000 barrels a day starting Feb. 1.

2007-01-05T07:45:00.000-08:00

Working gas in storage was 3,074 Bcf as of Friday, December 29, 2006, according to EIA estimates. This represents a net decline of 47 Bcf from the previous week. Stocks were 433 Bcf higher than last year at this time and 408 Bcf above the 5-year average of 2,666 Bcf. In the East Region, stocks were 201 Bcf above the 5-year average following net withdrawals of 33 Bcf. Stocks in the Producing Region were 170 Bcf above the 5-year average of 772 Bcf after a net withdrawal of 5 Bcf. Stocks in the West Region were 37 Bcf above the 5-year average after a net drawdown of 9 Bcf. At 3,074 Bcf, total working gas is above the 5-year historical range.

2007-01-04T07:32:00.000-08:00

Summary of Weekly Petroleum Data for the Week Ending December 29, 2006

U.S. crude oil refinery inputs averaged over 15.5 million barrels per day during
the week ending December 29, down 96,000 barrels per day from the previous
week's average. Refineries operated at 91.0 percent of their operable capacity
last week. Gasoline production declined slightly last week compared to the
previous week, averaging over 9.3 million barrels per day, while distillate fuel
production increased slightly, averaging 4.3 million barrels per day.

U.S. crude oil imports averaged over 10.1 million barrels per day last week, up
997,000 barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged over 9.4 million barrels per day, or 550,000 barrels
less than averaged over the same four-week period last year. Total motor
gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged nearly 1.3 million barrels per day. Distillate
fuel imports averaged 385,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) declined by 1.3 million barrels compared to the previous
week. However, at 319.7 million barrels, U.S. crude oil inventories remain
above the upper end of the average range for this time of year. Total motor
gasoline inventories rose by 5.6 million barrels last week, and are in the
middle of the average range. Distillate fuel inventories increased by 2.0
million barrels, and are in the upper half of the average range for this time of
year. Increases were seen in both high-sulfur distillate fuel (heating oil)
inventories and diesel fuel inventories (a combination of ultra-low-sulfur and
low-sulfur). Total commercial petroleum inventories rose by 1.8 million barrels
last week, and are above the upper end of the average range for this time of
year.

Total products supplied over the last four-week period has averaged nearly 20.9
million barrels per day, or 3.0 percent less than averaged over the same period
last year. Over the last four weeks, motor gasoline demand has averaged over
9.3 million barrels per day, or 0.5 percent above the same period last year.
Distillate fuel demand has averaged nearly 4.3 million barrels per day over the
last four weeks, or 1.3 percent below the same period last year. Jet fuel demand
is down 8.1 percent over the last four weeks compared to the same four-week
period last year.

2007-01-03T08:50:00.000-08:00

Oil prices plunged below $59 a barrel Wednesday as mild weather persisted in the United States, dampening demand for winter fuels such as heating oil and natural gas.

Light, sweet crude for February delivery on the New York Mercantile Exchange fell to $58.97 a barrel in midmorning trading, a drop of $2.08 from Friday's settlement price.

The Nymex trading floor was closed Monday for New Year's Day and Tuesday for the memorial service for former U.S. President Gerald Ford, although there was some electronic trading.

The Brent crude contract for February delivery fell $1.58 to $60.05 a barrel on the ICE Futures exchange, which was open on Tuesday.

In New York City, temperatures on the first day of 2007 hit a peak of 54 degrees Fahrenheit _ much warmer than normal.

But many analysts expect crude oil futures to stay on average above $60 a barrel this year because of robust demand growth in Asia and the Middle East, efforts by the Organization of Petroleum Exporting Countries to trim supply and market-rattling instability in suppliers such as Nigeria and Iraq.

OPEC's concerns that high global stockpiles and sluggish demand would undermine prices led it to agree on a 1.2 million barrel-a-day crude oil output cut in November and a further 500,000 barrel-a-day cut to take place Feb. 1.

"For 2007, oil pricing is likely going to be stubbornly high, with the OPEC group looking like it will want to defend a $55 floor under prices," said Victor Shum, an analyst with Purvin & Gertz in Singapore. He projected crude futures would trade in the $60-65 a barrel range. "With ongoing geopolitical concerns such as Iran and Nigeria, the market will also tend to have buyers on the high side."

Slower economic growth in the U.S. and a production spurt from non-OPEC countries should keep prices below the 2006 average of roughly $66 a barrel, analysts say.

A survey of energy analysts showed U.S. crude oil stocks were expected to decline for a fifth straight week in data due Thursday from the U.S. Energy Information Administration. The data, which will cover the week ended Dec. 22, have been delayed until Thursday because of the three-day Christmas holiday.

Crude stocks were expected to show a draw of 1.32 million barrels on average, a Dow Jones Newswires survey said, while both distillate and gasoline stocks were predicted to rise.

Distillate stocks, which include heating oil and diesel fuel, are expected to increase by an average of 220,000 barrels while gasoline inventories were seen rising by an average of 590,000 barrels.

Heating oil futures fell 4.72 cents to $1.6010 a gallon, while natural gas prices dropped 11.2 to $6.187 a gallon.

2006-12-29T08:12:00.000-08:00

Working gas in storage was 3,121 Bcf as of Friday, December 22, 2006, according to EIA estimates. This represents a net decline of 46 Bcf from the previous week. Stocks were 458 Bcf higher than last year at this time and 355 Bcf above the 5-year average of 2,766 Bcf. In the East Region, stocks were 165 Bcf above the 5-year average following net withdrawals of 28 Bcf. Stocks in the Producing Region were 154 Bcf above the 5-year average of 793 Bcf after a net injection of 6 Bcf. Stocks in the West Region were 36 Bcf above the 5-year average after a net drawdown of 24 Bcf. At 3,121 Bcf, total working gas is above the 5-year historical range.

2006-12-26T09:37:00.000-08:00

Oil fell Tuesday as warm weather continued to blanket the northeast U.S., but prices remained supported by worries Iran might disrupt oil flows in response to the U.N. Security Council's decision to impose sanctions on it.

U.S. crude for February delivery lost 81 cents to $61.60 a barrel on the New York Mercantile Exchange.

Public holidays across Europe meant trading volumes were very thin.

After months of deadlock, the Security Council agreed Saturday to impose sanctions on Iran's trade in nuclear materials and technology, drawing a warning from Tehran.

"If necessary, Iran will use any weapon to defend itself," Oil Minister Kazem Vaziri-Hamaneh was quoted as saying by the semi-official Fars news agency on Tuesday. In the past he has said Iran would rather not play the oil card.

Iran, the world's fourth-largest crude producer, has condemned the U.N. resolution as illegal and on Sunday vowed to speed up enrichment work, which could heighten tensions.

Oil prices rose earlier in the year because of fears Iran might cut its oil exports or disrupt Gulf shipping as its row with the West over its nuclear program escalated. The issue had faded since summer as the U.N. appeared unable to agree on how to deal with Tehran.

But analysts said traders might disregard the latest developments unless they saw evidence of supply disruption.

"It is certainly a bullish factor, but I think geopolitical matters will be ignored unless clearer risks materialize," said Makoto Takeda, energy analyst at Bansei Securities Co.

2006-12-22T08:46:00.000-08:00

Oil prices hovered below $63 a barrel on Friday after falling from a three-month high in the previous session on unusually warm weather in the United States Northeast.

U.S. crude was up 27 cents at $62.93 a barrel by 1230 GMT, pausing after a more than $1 tumble from Wednesday's highest close for three months.

London Brent crude rose 39 cents to $62.85 a barrel.

The U.S. National Weather Service on Thursday joined a chorus of private forecasters predicting that mild weather would persist into January, extending a period of above average temperatures that has lowered demand for heating fuels.

Temperatures in the U.S. Northeast, the biggest heating oil consuming region in the world, are expected to average as much as 14 degrees Fahrenheit above normal into early next week, according to forecasters DTN Meteorlogix.

U.S. crude inventories were expected to rebound next week as Gulf Coast shipping delays eased following a week of intermittent disruptions due to fog.

But commercial crude and refined product stocks combined were 400,000 barrels lower than the same time a year ago, a sharp fall from a 76 million barrels year-on-year surplus three months ago.

“(A) rebound in demand growth against limited supply growth created the largest October/November U.S. inventory draw on record,” said Goldman Sachs in a report.

The investment bank reaffirmed its positive view on next year but cut its average price forecast by $3 to $72.50 a barrel, still among the industry's highest targets.

A downward revision in U.S. third-quarter economic growth to 2 percent – from a previously reported 2.2 percent annualised rate – sent a bearish signal for fuel demand growth from the world's top consumer.

2006-12-21T07:31:00.000-08:00

Working gas in storage was 3,167 Bcf as of Friday, December 15, 2006, according to EIA estimates. This represents a net decline of 71 Bcf from the previous week. Stocks were 342 Bcf higher than last year at this time and 274 Bcf above the 5-year average of 2,893 Bcf. In the East Region, stocks were 110 Bcf above the 5-year average following net withdrawals of 52 Bcf. Stocks in the Producing Region were 117 Bcf above the 5-year average of 824 Bcf after a net withdrawal of 14 Bcf. Stocks in the West Region were 47 Bcf above the 5-year average after a net drawdown of 5 Bcf. At 3,167 Bcf, total working gas is within the 5-year historical range.

2006-12-20T07:32:00.000-08:00

Summary of Weekly Petroleum Data for the Week Ending December 15, 2006

U.S. crude oil refinery inputs averaged over 15.5 million barrels per day during
the week ending December 15, up 232,000 barrels per day from the previous week's
average. Refineries operated at 90.7 percent of their operable capacity last
week. Gasoline production increased last week compared to the previous week,
averaging over 9.3 million barrels per day, while distillate fuel production
also increased, averaging over 4.2 million barrels per day.

U.S. crude oil imports averaged 8.9 million barrels per day last week, down
696,000 barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged over 9.6 million barrels per day, 470,000 barrels less
than averaged over the same four-week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components) last
week averaged 843,000 barrels per day. Distillate fuel imports averaged 541,000
barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) dropped by 6.3 million barrels compared to the previous week.
However, at 329.1 million barrels, U.S. crude oil inventories remain well above
the upper end of the average range for this time of year. Total motor gasoline
inventories increased by 1.0 million barrels last week, but remain below the
lower end of the average range. Distillate fuel inventories rose by 1.2 million
barrels, and are in the middle of the average range for this time of year.
Increases were seen in both high-sulfur distillate fuel (heating oil)
inventories and diesel fuel inventories (a combination of ultra-low-sulfur and
low-sulfur). Total commercial petroleum inventories fell by 7.9 million barrels
last week, and are just above the upper end of the average range for this time
of year.

Total products supplied over the last four-week period has averaged over 21.1
million barrels per day, or 0.4 percent more than averaged over the same period
last year. Over the last four weeks, motor gasoline demand has averaged over
9.4 million barrels per day, or 2.3 percent above the same period last year.
Distillate fuel demand has averaged nearly 4.3 million barrels per day over the
last four weeks, or 2.0 percent above the same period last year. Jet fuel demand
is down 7.2 percent over the last four weeks compared to the same four-week
period last year.

2006-12-19T06:26:00.000-08:00

The Paris prosecutor's office has launched a probe of suspected payments by oil giant Total SA in Iran, judicial officials said Tuesday.

The inquiry was opened Monday and will be led by two investigating magistrates, said the two officials who spoke on condition of anonymity because of laws requiring that details of judicial investigations be kept secret.

They said the judges will aim to determine whether Total made illicit payments relating to a gas contract in Iran, and whether there is sufficient evidence for charges of embezzlement and corrupting foreign officials.

The probe follows a tip-off from authorities in Switzerland, the officials said. They said Swiss judicial authorities have frozen bank accounts belonging to an Iranian-born Swiss national as part of an investigation of suspected money laundering.

Total shares fell 0.9 percent to euro54.50 (US$71.34) in Paris trading.

2006-12-18T02:04:00.000-08:00

il held steady above $63 on Monday, as a dense fog delayed U.S. crude shipments and traders factored in OPEC's plan to further cut output.

U.S. crude traded one cent up at $63.44 a barrel by 0825 GMT, after rising 92 cents on Friday to the highest settlement in two weeks. London Brent slipped 3 cents to $63.46 a barrel.

Forecasts showed a fog delaying tankers carrying crude to refineries along the U.S. Gulf Coast could lift early this week, though vessel traffic on the Houston Ship Channel was halted again on Sunday night due to the fog.

Four days of intermittent delays on the waterway, which feeds the nation's busiest petrochemicals port, has led some refiners in the area to warn they may need to slow fuel production, but so far no Gulf Coast refinery has announced production cuts.

The shipping disruptions follow OPEC's decision on Thursday for a second output cut of 500,000 barrels per day (bpd) to start from February, coming on top of a 1.2 million bpd reduction agreed from November.

2006-12-15T08:23:00.000-08:00

Five oil and gas companies, including Shell, ConocoPhillips and BP, have agreed to pay royalties on future production under flawed drilling leases in the Gulf of Mexico, the government said Thursday.

The companies are among 59 energy producers that hold the leases at issue from 1998 and 1999. Because of a government mistake, the leaseholders have avoided royalty payments on oil and gas taken from federal waters. The leases omitted language requiring royalties when prices reached a certain level.

The agreements with the five companies are "a step in the right direction" and may lead others to find a way to rework the flawed leases, said the Interior Department's assistant secretary, Stephen Allred.

Some members of Congress have estimated that the royalty exemptions have cost the government $2 billion. Allred put the amount at "somewhat less than $900 million."

Congressional auditors have put the total government loss for past and potential future production under the leases as high as $10 billion.

The companies that reached agreement to begin paying royalties as of this past Oct. 1 are Shell Oil Co., BP PLC, ConocoPhillips Co., Marathon Oil Co. and Walter Oil & Gas Corp.

More than 1,040 of the leases were issued and about 570 are actively held by 59 companies, according to the Minerals Management Service, the agency that manages the leasing program. The companies that settled hold all or parts of 131 of the flawed leases.

"They're significant players," Allred told reporters.

He said other major leaseholders have refused to rework the deals and that some have refused even to discuss them.

Allred also acknowledged that the agreements Thursday deal only with royalties from future production and not oil and gas already taken.

"We do not believe that we have any ability to unilaterally change a contract," he said, explaining why the department is not seeking to recover royalties already lost from production.

The refusal of most of the companies to even discuss ways to correct the error in the 1998-99 leases has produced a political firestorm in Congress.

Both Democrats and Republicans have threatened to bar companies from future Gulf of Mexico drilling leases unless they agree to renegotiate the flawed leases.

Speaker-to-be Nancy Pelosi, D-Calif., said on Thursday that resolving the matter will be a priority in the House's first 100 legislative hours after Democrats take control in January.

Allred, however, said banning companies from future leases if they do not rework the flawed ones would lead to legal fights and significantly could reduce domestic oil and gas production.

"Our fear is that our program would shut down" if companies were banned from future lease sales, Allred said.

Reps. Henry Waxman, D-Calif., incoming chairman of the House Government Reform Committee, and GOP Rep. Tom Davis of Virginia, the current chairman, asked Attorney General Alberto Gonzales on Thursday to review the Interior Department's claim it cannot legally recover past royalty losses.

They cited a private law firm's analysis that argued the government has "legal recourse to immediately seek recovery of lost taxpayer revenue" from past production under the defective leases.

"It appears that the assertions by MMS that there are no available remedies may be incorrect," Waxman and Davis said.

2006-12-14T07:19:00.000-08:00

Oil prices rose above $62 a barrel Thursday as OPEC ministers agreed to hold production unchanged for now but set the stage for a cutback of half a million barrels a day in February.

Light, sweet crude for January delivery rose 80 cents to $62.17 a barrel on the New York Mercantile Exchange by afternoon in Europe. Brent crude for January, which expires at the close of trading Thursday, was up 90 cents at $62.23 a barrel.

The decision by the Organization of Petroleum Exporting Countries _ was confirmed by President Edmund Daukoru, who is also oil minister of Nigeria, along with ministers from other member nations.

With world inventories high but moving downward and the coldest days of the Northern Hemisphere winter still ahead, the move was a compromise _ meant to keep markets and consumers calm at least in the short term. It also left a possible window for the organization to decide against a cut in February should demand spike, moving prices move sharply upward.

The disagreement within OPEC over whether further reductions in output were needed reflected uncertainty over demand over the next four months, worries that inventories are too high and chafing over the shrinking U.S. dollar that makes each barrel of crude worth less than it was a year ago.

The U.S. Energy Department released data showing a 4.3 million barrel drop in U.S. crude oil inventories last week, while the International Energy Agency said in its monthly report that stockpiles of crude in industrialized nations fell by 40 million barrels in October.

In its latest supply report, the Energy Department said domestic crude oil inventories fell last week to 335.4 million barrels, but that was still 4 percent more than last year.

Gasoline stocks fell 100,000 barrels to 199.9 million barrels, their lowest level in more than a year and the lowest level for the week since 2000, the department's statistical arm said. Distillate stocks, which include heating oil and diesel fuel, also declined, dropping by 500,000 barrels to 131.9 million barrels.

Heating oil futures rose nearly 3 cents to $1.7600 a gallon, and gasoline futures were up more than 2 cents to $1.6400 a gallon. Natural gas rose 6.4 cents to $7.737 per 1,000 cubic feet.

2006-12-13T07:30:00.000-08:00

Summary of Weekly Petroleum Data for the Week Ending December 8, 2006

U.S. crude oil refinery inputs averaged 15.3 million barrels per day during the
week ending December 8, down 169,000 barrels per day from the previous week's
average. Refineries operated at 89.1 percent of their operable capacity last
week. However, gasoline production increased last week compared to the previous
week, averaging nearly 9.3 million barrels per day, while distillate fuel
production declined, averaging over 4.0 million barrels per day.

U.S. crude oil imports averaged 9.6 million barrels per day last week, down
701,000 barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged over 10.0 million barrels per day, 132,000 barrels
less than averaged over the same four-week period last year. Total motor
gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged 967,000 barrels per day. Distillate fuel imports
averaged 465,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) dropped by 4.3 million barrels compared to the previous week.
However, at 335.4 million barrels, U.S. crude oil inventories remain well above
the upper end of the average range for this time of year. Total motor gasoline
inventories inched lower by 0.1 million barrels last week, and are below the
lower end of the average range. Distillate fuel inventories declined by 0.5
million barrels, and are in the lower half of the average range for this time of
year. A decline in high-sulfur distillate fuel (heating oil) inventories more
than compensated for a slight rise in diesel fuel inventories (a combination of
ultra-low-sulfur and low-sulfur). Total commercial petroleum inventories fell
by 7.5 million barrels last week, and are just above the upper end of the
average range for this time of year.

Total products supplied over the last four-week period has averaged 21.0 million
barrels per day, or 0.7 percent more than averaged over the same period last
year. Over the last four weeks, motor gasoline demand has averaged over 9.3
million barrels per day, or 1.9 percent above the same period last year.
Distillate fuel demand has averaged nearly 4.3 million barrels per day over the
last four weeks, or 3.0 percent above the same period last year. Jet fuel demand
is down 6.5 percent over the last four weeks compared to the same four-week
period last year.

2006-12-12T07:05:00.000-08:00

Crude oil rose on speculation that the Organization of Petroleum Exporting Countries, producer of 40 percent of the world's oil, may agree this week to cut output to prop up prices.

There is ``general support'' among OPEC members to reduce supply, OPEC President Edmund Daukoru said today in an interview in Abuja, Nigeria, where the group will meet Dec. 14. A price of $60 a barrel for U.S. benchmark crude, called West Texas Intermediate, is ``low,'' he said.

``Prices could sell off sharply after the meeting'' if the group fails to agree on an additional supply cut, Edward Meir, an analyst at Man Financial Inc. in Stamford, Connecticut, wrote in a report. ``The cartel has not only come up short in November, but its failure to trim again will not sit well with the markets.''

Crude oil for January delivery rose as much as 41 cents, or 0.7 percent, to $61.63 a barrel in after-hours electronic trading on the New York Mercantile Exchange. The contact traded at $61.50 at 2:47 p.m. in London. Brent crude oil advanced 22 cents to $62.06 a barrel on the ICE Futures exchange in London. Brent has declined every day since Dec. 1.

OPEC should cut production again because of an oversupply of crude, Iranian Oil Minister Kazem Vaziri-Hamaneh said on Shana, the oil ministry's news agency. Iran is the 11-member group's second-largest producer.

Oil analysts and traders have been questioning OPEC's compliance with a previous cut. The group agreed to reduce daily production by 1.2 million barrels starting Nov. 1, citing rising stockpiles and slower than forecast demand growth. OPEC managed to reduce output by 550,000 barrels in November, according to a Bloomberg News survey.

Kuwait Satisfied

Most OPEC nations are satisfied with a price of about $60 a barrel, Kuwaiti Oil Minister Ali Jarrah al-Sabah said today, according to state-run Kuwait News Agency.

The group may see less need to cut output with prices above $60 a barrel, Maizar Rahman, the OPEC governor of Indonesia, said in Abuja. ``There are surplus amounts'' of crude oil stockpiles, he said.

OPEC's basket price, a weighted average of 11 blends produced by OPEC nations, fell 89 cents to $57.74 a barrel yesterday.

Crude oil has fallen about 2.5 percent this month as analysts and traders said they expect U.S. fuel inventories to meet demand for heating amid signs of mild weather.

Temperatures in the U.S. northeast, where 80 percent of U.S. heating oil is burned, will be above average from Dec. 17 through Dec. 25, the National Weather Service said yesterday.

U.S. distillate supplies probably gained 650,000 barrels last week, based on the median estimate from the Bloomberg News survey of six analysts. Stockpiles held 132.4 million barrels on Dec. 1, 0.9 percent more than the five-year average for the period.

Heating demand in the U.S. northeast will be 37 percent below normal through Dec. 18, Belton, Missouri-based forecaster Weather Derivatives said yesterday.

Crude oil inventories, already 14 percent above the five-year average, probably declined by 1.4 million barrels, based on the survey. Stockpiles held 339.7 million barrels on Dec. 1.

2006-12-11T08:05:00.000-08:00

Oil prices fell in trading Monday amid mixed signals from OPEC officials about the possibility of production cuts when the organization meets later this week.

Forecasts of warmer U.S. weather also depressed prices.

Light, sweet crude for January delivery on the New York Mercantile Exchange dropped 33 cents to $61.70 a barrel in electronic trading by afternoon in Europe.

Brent fell 23 cents to $61.97 a barrel on the ICE Futures exchange.

Heating oil was down by more than a penny at $1.7459 a gallon while unleaded gasoline futures lost nearly a cent to $1.6140 a gallon. Natural gas prices dropped more than 25 cents to $7.308 per 1,000 cubic feet.

The market is somewhat uncertain what to expect from Thursday's meeting of the 11-member Organization of Petroleum Exporting Countries.

Some OPEC officials have been pressing in recent days for a cut in output on top of the production cut of 1.2 million barrels a day approved in October, while others have indicated that with prices above US$60 a barrel, the cartel was likely to refrain from cutting output at the meeting.

Some Saudi officials have expressed satisfaction with current price levels, but Saudi Oil Minister Ali Naimi said recently that he was concerned about excessively high oil inventories in major consuming nations.

Vienna's PVM Oil Associates also suggested that a weaker dollar could add to sentiment for production increases because crude is sold in dollars but much of the consumer goods purchased by OPEC nations is denominated in euros.

"A weaker U.S. currency does have an effect on oil producers' earnings," it said.

Recent data from the International Energy Agency showed stocks held among the 30 members of the Organization for Economic Cooperation and Development at the end of September at 2.76 billion barrels, the highest level in almost eight years and 4.5 percent higher than a year ago.

Expectations of milder temperatures in the United States also weighed on prices. Temperatures in the Northeast, the nation's largest heating oil market, were expected to moderate this week, with above-normal temperatures through most of the nation, according to the National Weather Service.

2006-12-10T10:54:00.000-08:00

Oil prices should climb back above US$70 a barrel as a result of winter weather in the northern hemisphere and OPEC output decisions, a senior Iranian oil official said Sunday.

"The oil price in the world market has been more than [US]$70 per barrel in the past, but considering the fact that we are approaching winter and demand is increasing, this price could be higher," said Gholamhossein Nozari, managing director of state oil company NIOC.

"We are trying to increase the current oil price through controlling the market," the official IRNA news agency said.

Oil prices in New York and London closed just above US$62 per barrel Friday.

The Organization of Petroleum Exporting Countries meets Thursday to decide on output policy.

OPEC president Edmund Daukoru has said he favors a cut in production, deepening a cut of 1.2 million barrels per day agreed in October.

Iran's OPEC governor, Hossein Kazempour Ardebili, said OPEC ministers need to take into account ample US oil stockpiles, the weakening dollar, slower-than- expected world economic growth and forecasts of strong non-OPEC oil production growth.

"OPEC will make appropriate decisions by having these realities in mind," he said on the fringe of an energy conference in Teheran Sunday.

Saudi Electricity said it has awarded US firm General Electric contracts worth 3.65 billion riyals (HK$7.56 billion) to help expand three power plants in key regions of the country. The project would increase the capacity of the three plants in the Eastern and Central provinces by 2,860 megawatts, Saudi Electricity, the kingdom's biggest utility by market value, said.

Completion is expected within 20 months, it added without giving further details. The firm was forced to ration power for two weeks in August in the two provinces - the kingdom's main industrial hubs - due to technical failures.

2006-12-08T07:16:00.000-08:00

Oil prices rose Friday, supported by a possible production cut by OPEC countries and amid violence in Nigeria, Africa's largest oil producer.

Light, sweet crude for January delivery gained 64 cents (U.S.) to $63.13 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe.

January Brent crude at London's ICE Futures exchange rose 93 cents to $63.50 a barrel.

Prices were also supported by uncertainty ahead of a meeting next week of oil ministers from the Organization of Petroleum Exporting Countries. Some officials have been pressing in recent days for a cut in output on top of a production cut of 1.2 million barrels a day, approved in October.

On Thursday, Saudi Arabia's ambassador to the U.S., Prince Turki al-Faisal, said current crude oil prices were “acceptable and imminently fair.”

In Nigeria, a militant group attacked a southern oil export terminal belonging to a subsidiary of Italy's Eni SpA early Thursday, taking three Italians and a Lebanese hostage and killing another person, officials said.

Agip officials said oil exports at the 200,000 barrels a day terminal were not affected. The group vowed more attacks will follow if their long-standing demands, which include compensation from Royal Dutch Shell PLC for alleged environmental pollution, are not met.

Since the beginning of 2006, militant groups in Nigeria have attacked pipelines and taken workers hostage in violence that has kept about 500,000 barrels a day of Niger Delta crude off the market, although output has grown offshore Nigeria.

Buying of oil futures was kept in check by forecasts of warmer weather in the United States next week.

Temperatures in the U.S. Northeast, the nation's largest heating oil market, were expected to moderate later in the week, with the National Weather Service forecasting above-normal temperatures through most of the nation next week.

The U.S. National Oceanic and Atmospheric Administration said last month that the unusual warming of water in the Pacific Ocean known as El Nino was expected to continue into winter. The federal Climate Prediction Center said the result could be warmer than normal temperatures over the western and northern United States and western and central Canada.

Natural gas futures fell fractionally to $7.668 per 1,000 cubic feet on the Nymex, unleaded gasoline rose 1.1 cent to $1.6385 and heating oil prices were up 1.82 cents to $1.7970 a gallon.

2006-12-07T07:30:00.000-08:00

Working gas in storage was 3,406 Bcf as of Friday, December 1, 2006, according to EIA estimates. This represents a net decline of 11 Bcf from the previous week. Stocks were 232 Bcf higher than last year at this time and 282 Bcf above the 5-year average of 3,124 Bcf. In the East Region, stocks were 109 Bcf above the 5-year average following net injections of 10 Bcf. Stocks in the Producing Region were 129 Bcf above the 5-year average of 881 Bcf after no net change in stock levels. Stocks in the West Region were 45 Bcf above the 5-year average after a net drawdown of 21 Bcf. At 3,406 Bcf, total working gas is above the 5-year historical range.

2006-12-07T07:14:00.000-08:00

Oil prices gained slightly in Asian trading Thursday after U.S. government data showed that domestic inventories of crude oil, gasoline and heating oil fell last week.

Light, sweet crude for January delivery rose 23 cents (U.S.) to $62.42 a barrel in Asian electronic trading on the New York Mercantile Exchange. The contract on Wednesday fell 24 cents to settle at $62.19 a barrel.

January Brent crude at London's ICE Futures exchange rose 32 cents to $63.39 a barrel.

In its latest petroleum supply report released Wednesday, the Energy Information Administration, the U.S. Department of Energy's statistical arm, said domestic inventories of crude oil fell by 1.1 million barrels last week to 339.7 million barrels, or 5.4 per cent above year-ago levels.

Gasoline stocks declined by 1.1 million barrels to 200 million barrels, or 2.6 per cent less than a year ago.

Inventories of distillate fuel, which include heating oil and diesel, shrank by 400,000 barrels to 132.4 million barrels, or 1 per cent below year-ago levels.

The decline in inventories came as refinery utilization rose 2.4 percentage points to 90.5 per cent of operating capacity.

Analysts surveyed by Dow Jones Newswires had predicted a build of less than 1 million barrels in both gasoline and crude stocks, and a modest drawdown in distillate stocks.

Also supporting prices was uncertainty ahead of a meeting next week of oil ministers from the Organization of Petroleum Exporting Countries. OPEC officials have been pressing in recent days for a cut in output on top of a production cut of 1.2 million barrels a day, approved in October.

Weighing on energy prices were expectations of milder temperatures in the United States. Temperatures in the Northeast, the nation's largest heating oil market, were expected to moderate later in the week, with the National Weather Service forecasting above-normal temperatures through most of the nation next week.

Heating oil futures rose half a cent to $1.7990 a gallon while natural gas prices added 3.8 cents to $7.765 per 1,000 cubic feet.

2006-12-06T12:03:00.000-08:00

Oil prices were steady Wednesday after U.S. government data showed domestic inventories of crude oil, gasoline and heating oil fell last week.

The possibility of more production cuts by the Organization of Petroleum Exporting Countries has also kept a floor under prices. OPEC, which meets Dec. 14 in Nigeria, says it is concerned about ballooning worldwide crude oil inventories.

Light, sweet crude for January delivery rose 2 cents to $62.45 a barrel on the New York Mercantile Exchange. The contract had fallen a penny Tuesday.

January Brent crude at London's ICE Futures exchange fell 19 cents to $63.13 a barrel.

In its latest petroleum supply report, the Department of Energy said domestic inventories of crude oil fell by 1.1 million barrels last week to 339.7 million barrels, or 5.4 percent above year ago levels.

Inventories of gasoline declined by 1.1 million barrels to 200 million barrels, or 2.6 percent less than a year ago. Inventories of distillate fuel, which include heating oil and diesel, shrank by 400,000 barrels to 132.4 million barrels, or 1 percent below year ago levels.

Heating oil fell half a cent to $1.7933 a gallon, unleaded gasoline futures fell 1.2 cent to $1.63 a gallon and natural gas futures fell 9.7 cents to $7.588 per 1,000 cubic feet.

The U.S. Energy Department said Tuesday in its annual long-term world energy forecast that the price of oil, when adjusted for inflation, would decline between 2007 and 2015 as investments made in recent years of historically high prices bring new supplies to the market.

2006-12-06T07:30:00.000-08:00

Summary of Weekly Petroleum Data for the Week Ending December 1, 2006

U.S. crude oil refinery inputs averaged nearly 15.5 million barrels per day
during the week ending December 1, up 319,000 barrels per day from the previous
week's average. Refineries operated at 90.5 percent of their operable capacity
last week. Gasoline production increased last week compared to the previous
week, averaging nearly 9.2 million barrels per day, while distillate fuel
production also increased, averaging nearly 4.2 million barrels per day.

U.S. crude oil imports averaged 10.3 million barrels per day last week, up
541,000 barrels per day from the previous week. Over the last four weeks, crude
oil imports have averaged 10.0 million barrels per day, 229,000 less than
averaged over the same four-week period last year. Total motor gasoline imports
(including both finished gasoline and gasoline blending components) last week
averaged 877,000 barrels per day. Distillate fuel imports averaged 303,000
barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) declined by 1.1 million barrels compared to the previous
week. At 339.7 million barrels, U.S. crude oil inventories remain well above
the upper end of the average range for this time of year. Total motor gasoline
inventories dropped by 1.1 million barrels last week, and are below the lower
end of the average range. Distillate fuel inventories inched lower by 0.4
million barrels, and are near the middle of the average range for this time of
year. A decline in high-sulfur distillate fuel (heating oil) inventories more
than compensated for a slight rise in diesel fuel inventories (a combination of
ultra-low-sulfur and low-sulfur). Total commercial petroleum inventories fell
by 4.2 million barrels last week, and are just above the upper end of the
average range for this time of year.

Total products supplied over the last four-week period has averaged nearly 21.0
million barrels per day, or 1.7 percent more than averaged over the same period
last year. Over the last four weeks, motor gasoline demand has averaged nearly
9.3 million barrels per day, or 1.6 percent above the same period last year.
Distillate fuel demand has averaged over 4.3 million barrels per day over the
last four weeks, or 6.6 percent above the same period last year. Jet fuel demand
is down 0.6 percent over the last four weeks compared to the same four-week
period last year.

2006-12-06T05:04:00.000-08:00

Before Christmas Dinner.....Perform A Background Check
On Your Daughter's Boyfriend

Oil prices held their ground above $62 on Wednesday as caution set in ahead of U.S. inventory data, which are expected to show a fall in heating fuel stocks.

U.S. crude was trading 16 cents higher at $62.59 at 0736 GMT. London's Brent crude rose 15 cents to $63.47.

Analysts polled by Reuters expect U.S. government data on Wednesday to show a 500,000-barrel decline in distillate stocks, which include heating fuel, following higher demand after a major snow storm hit the northeast U.S. over the weekend.

Crude inventories were expected to rise by a slim volume as imports rebounded, keeping them at or near their highest level for the time of year since 1991.

The data will be released at 1530 GMT.

"Inventories remain the key and from comfortable levels, there's not much indication of unusual demand," said Tobin Gorey, an analyst at Commonwealth Bank.

"The cold snap in the U.S. will come to an end over the weekend and then warmer than usual temperatures will prevail for a couple of weeks. Supply is less likely to get critically tight," Gorey said.

The U.S. National Weather Service forecast higher than usual temperatures by the weekend in the U.S. Northeast, the top heating oil market. The mild weather could last for two weeks.

For now, oil prices have yet to convincingly leave behind the trading rut of $58-$64 a barrel established since mid-September, despite signs that OPEC is inclined to cut output again.

Most OPEC ministers have said they still see the need for a further output cut when they meet in Abuja on December 14 and that, regardless of price, the market is oversupplied.

The group, which controls more than a third of world oil exports, already agreed at an emergency meeting in October to trim 1.2 million barrels per day of output from November 1 to stem oil's steep slide.

But energy watchdog the International Energy Agency (IEA) opposed the possible cut, stating that the cartel should wait until winter demand data becomes available at the end of January.

2006-12-05T09:14:00.000-08:00

Oil prices edged higher Tuesday as traders weighed forecasts calling for mild U.S. weather next week against anticipated further production cuts by OPEC.

Light sweet crude for January delivery rose 21 cents to $62.65 a barrel on the New York Mercantile Exchange. January Brent crude at London's ICE Futures exchange was up 40 cents at $63.85 a barrel.

Also on Tuesday, the U.S. Energy Department released its annual long-term world energy forecast. The agency predicted that the price of oil, when adjusted for inflation, would decline between 2007 and 2015 as investments made in recent years of historically high prices bring new supplies to the market.

After that, the Energy Department said it expects prices to resume an upward trend, bringing average real prices (in 2005 dollars) by 2030 to more than $59 a barrel. In nominal terms, that would be equivalent to about $95 a barrel. The agency said it expects OPEC to adjust its output over the next 25 years to try to keep average prices between $50 and $60 _ a range it is already trying to achieve.

In the very short-term, energy analyst Victor Shum said he expects the oil market to strengthen further as demand increases during the Northern Hemisphere winter. He predicted that $60 a barrel was the new price floor.

"In the short-term future, what's still going to move the market is the weather," said Shum, of Purvin & Gertz in Singapore.

At the moment, however, the U.S. autumn has been marked by relatively mild weather. Nymex natural gas fugures fell 7 cents to $7.73 per 1,000 cubic feet, while heating oil futures were steady at $1.809 a gallon. Unleaded gasoline futures were flat at $1.6674 per gallon.

Recent comments from key members of the Organization of Petroleum Exporting Countries suggest the cartel will push for further cuts in output when it meets Dec. 14 in Nigeria.

Recent data from the International Energy Agency showed stocks held among the 30 members of the Organization of Economic Cooperation and Development at the end of September at 2.76 billion barrels, the highest level in almost eight years and 4.5 percent higher than a year ago.

This means OECD members have 55 days' worth of oil consumption in stock, a significant two days more than a year ago.

Saudi Arabian Oil Minister Ali Naimi has said OPEC needs to take 100 million barrels out of the market to balance it. Kuwait's Oil Minister Sheik Ali Al Jarrah Al Sabah, who was also at a meeting of Arab oil producers in Cairo, agreed.

The figure is close to what the IEA estimates is the stock build in the third quarter of this year _ the highest for the period in 14 years _ and it equates to more than 1 million barrels a day.

2006-12-04T07:43:00.000-08:00

Oil prices fell on Monday, unwinding steep gains last week that were spurred by mounting expectations of a second OPEC supply cut and as colder weather began to eat into U.S. fuel stocks.

U.S. crude was trading 51 cents lower at $62.92 a barrel by 6:32 a.m. EST, while Brent crude traded down 60 cents at $64.02.

"The run up that we had was too much, too soon," said Olivier Jakob of Petromatrix.

U.S. crude hit a 17-month low of $54.86 on November 17, but has since recovered, climbing by around $4 last week and reaching a peak of $63.82 early on Monday, the highest since September 28.

Most OPEC ministers have said they still see the need for a further output cut when the producer group meets in Abuja next week and that, regardless of price, the market is oversupplied.

The group already agreed to reduce supplied by 1.2 million barrels per day from November 1.

"The price is firming somewhat, but against a weakening dollar, and there is still a lot of excess volume out there," OPEC President Edmund Daukoru said in Abu Dhabi on Monday.

The dollar's slide to a series of 20-month lows against the euro (EUR=) has triggered buying across the commodities complex as dollar-denominated assets are relatively cheap, but it has eroded revenues for oil producing countries.

Some analysts have said, however, OPEC could be more worried about the forecasts of economic weakness in the United States, the world's biggest oil consumer, that have contributed to the dollar's slide.

A weaker U.S. economy would impact oil demand and lower oil prices, although in the immediate term, tightening inventories could provide some support.

2006-12-01T09:06:00.000-08:00

Angola, the largest sub-Saharan oil producer in Africa after Nigeria, said it will apply to join OPEC next month, while the oil cartel's secretary general said Sudan also was poised to join.

OPEC Secretary General Mohammed Barkindo, speaking to Dow Jones Newswires on Thursday on the sidelines of a producers' meeting in Egypt, gave no timetable for Angola or Sudan to join the group, which has not welcomed a new member since 1975.

Joining offers prestige, but would mean adhering to OPEC production quotas -- though members routinely violate the limitations. OPEC agreed in October to cut total production by 1.2 million barrels a day to about 26.3 millions barrels a day as of Nov. 1, and further cuts aimed at shoring up prices could be coming. OPEC controls about 40 percent of the world's daily oil consumption.

Oil prices are down about 20 percent since hitting a high above $78 a barrel in mid-July, though light sweet crude for January delivery rose 57 cents to $63.03 a barrel Thursday on the New York Mercantile Exchange.

David Fyfe, an International Energy Agency analyst, told Dow Jones Newswires that Angola and Sudan could significantly boost OPEC's influence over global oil markets because of the added volume. But Fyfe pointed out the cartel was having trouble getting existing members to adhere to quotas, speculating that adding members would only make that more difficult.

Angola's crude production, most of it from offshore rigs operated by foreign companies, has climbed to around 1.4 million barrels a day but is expected to reach 2 million barrels a day by April. Sudan produces about half a million barrels a day.

Angola's announcement that it planned to apply for OPEC membership appeared to have little effect on prices. Ehsan Ul-Haq, chief analyst at PVM, noted Angola would not be joining before March, and said "they don't produce enough to have an immediate impact."

A senior Angolan official told The Associated Press the formal membership request would be presented at OPEC's Dec. 14 meeting in Abuja, Nigeria. The official spoke on condition of anonymity because he was not authorized to discuss the issue publicly.

Angola said in a statement late Wednesday the application stemmed from its "growing role in the world oil sector."

The southwest African country is China's largest supplier of crude after overtaking Saudi Arabia this year.

Foreign oil companies operating in Angola include Chevron Corp., BP PLC, Exxon Mobil Corp., and Total SA. State oil company Sonangol oversees the sector and awards operating licenses.

In Vienna, OPEC spokesman Omar Farouk Ibrahim said he did not foresee any problems with Angola's application, noting it has been an observer for some time and has attended OPEC conferences with that status.

Three-quarters of the membership must approve an application, including all founding members -- Iran, Iraq, Saudi Arabia, Kuwait and Venezuela.

OPEC member Venezuela supports Angola's membership bid, that country's oil minister, Rafael Ramirez, told reporters in Venezuela Thursday.

OPEC currently has 11 members. Ibrahim said Gabon, in 1975, was the last country to join the organization, two years after Ecuador joined in 1973. However, both withdrew in the 1990s. Nigeria joined in 1971 and has remained a member.

Oil revenues provide around 80 percent of Angola's state income. The country, a former Portuguese colony, is now relatively stable politically after a ruinous two-decade civil war ended in 2002.

Human rights groups, however, have accused Angola's leaders of concealing the exact amount the country receives from crude sales and of stealing some of the money. Angolan officials have denied the charges.

The International Monetary Fund has also complained about a lack of openness in oil sector accounting in Angola

Angola steered closer to the United States in the early 1990s and has maintained close ties with France. However, since the civil war ended Angola has deepened cooperation with China and, more recently with Russia.

Last month Russia's OAO Lukoil and Sonangol signed a memorandum of understanding on joint exploration of Angola's offshore oil fields.

2006-11-30T08:58:00.000-08:00

The Energy Department said natural-gas inventories fell 32 billion cubic feet for the week ended Nov. 24. Global Insight expected a decline of 18 billion. Total stocks now stand at 3.417 trillion cubic feet, up 185 billion cubic feet from the year-ago level, and 230 billion cubic feet above the five-year average, the government data said. January natural gas rose 12.9 cents to $8.99 per million British thermal units after reaching an over two-month high of $9.05 before pulling back to $8.86 in mid-day trading.

2006-11-30T07:41:00.000-08:00

Working gas in storage was 3,417 Bcf as of Friday, November 24, 2006, according to EIA estimates. This represents a net decline of 32 Bcf from the previous week. Stocks were 185 Bcf higher than last year at this time and 230 Bcf above the 5-year average of 3,187 Bcf. In the East Region, stocks were 62 Bcf above the 5-year average following net withdrawals of 28 Bcf. Stocks in the Producing Region were 113 Bcf above the 5-year average of 897 Bcf after a net withdrawal of 5 Bcf. Stocks in the West Region were 55 Bcf above the 5-year average after a net addition of 1 Bcf. At 3,417 Bcf, total working gas is above the 5-year historical range.

2006-11-30T07:24:00.000-08:00

Oil climbed to a two-month high near $63 on Thursday, building on the previous session's gains after an unexpected drop in U.S. winter fuel stocks and signs of solid economic growth in the world's top consumer.

U.S. crude rose 44 cents to $62.90 a barrel at 1423 GMT. It earlier hit $63.07, its highest since October 2.

Brent crude rose 76 cents at $63.83.

U.S. inventories of crude oil and refined products fell last week as imports eased and demand was robust, the Energy Information Administration (EIA) said on Wednesday .

Distillate stocks, including home heating oil, fell by one million barrels. Analysts had expected a stock build.

"The unexpected pull on U.S. stock levels was an immediate catalyst for the market to trade up," said Andrew Harrington, a natural resource analyst at ANZ Bank in Sydney.

The news pushed oil prices above $62 on Wednesday, helping the market finally break through a two-month-long trading rut.

2006-11-29T08:35:00.000-08:00

U.S. commercial crude oil inventories declined by 0.3 million barrels compared to the previous week. At 340.8 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories dropped by 0.6 million barrels last week, and are at the lower end of the average range.

Summary of Weekly Petroleum Data for the Week Ending November 24, 2006

U.S. crude oil refinery inputs averaged nearly 15.2 million barrels per day during the week ending November 24, up 169,000 barrels per day from the previous week''s average. Refineries operated at 88.1% of their operable capacity last week. Gasoline production increased last week compared to the previous week, averaging nearly 8.9 million barrels per day, while distillate fuel production inched lower, averaging over 4.0 million barrels per day.

U.S. crude oil imports averaged nearly 9.8 million barrels per day last week, down 732,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged nearly 9.9 million barrels per day, 217,000 less than averaged over the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 940,000 barrels per day. Distillate fuel imports averaged 298,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) declined by 0.3 million barrels compared to the previous week. At 340.8 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories dropped by 0.6 million barrels last week, and are at the lower end of the average range. Distillate fuel inventories fell by 1.0 million barrels, and are near the middle of the average range for this time of year.

A decline in high-sulfur distillate fuel (heating oil) inventories more than compensated for a slight rise in diesel fuel inventories (a combination of ultra-low-sulfur and low-sulfur). Total commercial petroleum inventories plummeted by 7.5 million barrels last week, and are just above the upper end of the average range for this time of year.

Total products supplied over the last four-week period has averaged nearly 21.0 million barrels per day, or 2.0% more than averaged over the same period last year. Over the last four weeks, motor gasoline demand has averaged 9.2 million barrels per day, or 1.2% above the same period last year. Distillate fuel demand has averaged nearly 4.4 million barrels per day over the last four weeks, or 7.1% above the same period last year. Jet fuel demand is up 0.3% over the last four weeks compared to the same four-week period last year.

2006-11-28T09:37:00.000-08:00

Natural-gas futures touched their highest levels in over a week ahead of the expiration of the December contracts, while growing expectations that key oil producers will agree to further cut output at a meeting next month helped lift crude prices closer to $61 a barrel.

Natural-gas for December delivery rose 12.2 cents to $8.22 per million British thermal units on the New York Mercantile Exchange after a high of $8.14, its strongest intraday level since Nov. 17.

January natural gas, which will become the lead-month contract at the session's end, was at $8.57, up 21.3 cents.

January crude was last up 53 cents at $60.85 a barrel in New York, after earlier climbing as much as 1% to $60.90.

"Some forecasters are making the daring prediction that it might actually get cold in December," said Phil Flynn, a senior analyst at Alaron Trading, in e-mailed commentary.

"Though the eastern third of the country is enjoying an atypical warm spell for this time of year ... change is on the way in the form of an Arctic air mass currently chilling the Northwest and Rocky Mountains," said John Kilduff, an analyst at Fimat USA.

Still, "winter readings don't appear to have much staying power and should diminish by the middle of next week," he said. "Until cold with some longevity blankets the high consumption regions, prices will have difficulty over $8," he said, adding that "right now, the coming cold just doesn't seem severe enough to eat up much storage."

Early estimates for Thursday's weekly Energy Department update on natural-gas supplies calls for a decline between 5 billion and 40 billion cubic feet, according to Fimat.

2006-11-27T04:37:00.000-08:00

Oil rose one percent towards $60 a barrel on Monday after Saudi Arabia's oil minister said OPEC may cut output further when it meets on Dec. 14.

Surging gold also lifted oil as investment funds sought an alternative to the dollar, at a 20-month low against the euro.

U.S. crude rose to $59.86 by 4:21 a.m. ET, up 62 cents from the settlement Wednesday, the last day of trade in New York before the two-day Thanksgiving holiday.

London Brent crude gained seven cents to $60.10, adding to 68-cent gains on Friday.

Saudi Oil Minister Ali al-Naimi, OPEC's most influential voice, held out the prospect of a further output cut when the group meets next month in Abuja.

At an emergency meeting in Doha in October, OPEC agreed to remove 1.2 million barrels per day from oversupplied markets -- the first cut in two years. Since then, OPEC ministers have lined up in favor of a further reduction to underpin prices.

"We must look at the impact of the measures decided in Doha. If they are adequate, we will be satisfied, if they are not we will act again and the aim is to bring stability back to the market," Naimi told reporters.

"The longer oil stays below $60 the more chance OPEC will cut," said Tony Nunan, a risk manager at Mitsubishi Corp.

The dollar hit a 20-month low against the euro and a three-month low against the yen on Monday, amid worries over a slowdown in U.S. economic growth.

Oil has been stuck in a two-month trading rut of $58-$62 a barrel, showing few signs of resuming a climb back toward a record high of $78.40 a barrel hit in mid-July.

2006-11-24T10:11:00.000-08:00

Oil rose towards $60 a barrel on Friday, drawing strength from a disruption to supply in Nigeria and as a fall in the U.S. dollar boosted other commodities.

The price of oil had dropped nearly $1 on Wednesday after a U.S. government report showed crude stocks rose a more-than-expected 5.1 million barrels last week, adding to ample supplies.

"It's been pretty weak recently so maybe a rally is not unexpected," said Christopher Bellew, an oil futures broker at Bache Financial in London.

U.S. crude was up 57 cents at $59.81 a barrel. London Brent gained 64 cents to $59.99 at 1424 GMT.

Supporting the market, Italian oil company Eni declared a force majeure on exports from the Okono terminal in Nigeria after it was attacked, ship agent Gulf Agency Company said late on Thursday.

Prices are vulnerable to wider fluctuations as the New York Mercantile Exchange is shut for the two-day Thanksgiving holiday while electronic trade is continuing, leaving trade thinner.

"Because of the holiday it's light volume and that sets the stage for volatility," said Mike Wittner, oil analyst at investment bank Calyon in London.

2006-11-24T03:51:00.000-08:00

Oil steadied on Friday at around $59 a barrel in trade muted by the long U.S. Thanksgiving holiday weekend, after tumbling on a rise in stockpiles in top oil consumer the United States.

Prices dropped nearly $1 on Wednesday after a U.S. government report showed crude stocks rose by 5.1 million barrels last week, much more than expected, adding to already ample supplies.

"In this market, people would not wish to be long over the weekend," said analyst Deborah White of SGCIB. "Inventories in the U.S. remain extremely comfortable -- we had a massive crude stockbuild."

U.S. crude was down 3 cents at $59.21 a barrel. London Brent gained 5 cents to $59.40 at 1005 GMT.

The New York Mercantile Exchange is shut for the two-day Thanksgiving holiday, while electronic trade is continuing.

Oil's drop from a record high of $78.40 hit in July prompted the Organization of Petroleum Exporting Countries in October to cut oil output by 1.2 million barrels per day from November 1.

But rising inventories and analysts' skepticism over whether OPEC, which pumps more than a third of world supply, will adhere to the cutback in full has pressured prices.

On Thursday, the oil minister for OPEC's smallest producer Qatar dulled down comments made last week on the prospect of a further cut in OPEC output.

"It's too early now to jump to the front seat and say what we will do, what is the quantity if we want to cut," Abdullah bin Hamad al-Attiyah told reporters in Seoul.

Last week Attiyah told Reuters OPEC had "no choice but to accept a cut" when it meets in Nigeria next month, and that a $60 U.S. crude oil price was "moderate".

Prices over the past few weeks have dipped below $55 before rebounding to around $60 despite bulging U.S. inventories and warm winter in the United States suppressing demand.

2006-11-22T09:06:00.000-08:00

Working gas in storage was 3,449 Bcf as of Friday, November 17, 2006, according to EIA estimates. This represents a net decline of 1 Bcf from the previous week. Stocks were 174 Bcf higher than last year at this time and 240 Bcf above the 5-year average of 3,209 Bcf. In the East Region, stocks were 72 Bcf above the 5-year average following net injections of 2 Bcf. Stocks in the Producing Region were 114 Bcf above the 5-year average of 901 Bcf after no net change in stock levels. Stocks in the West Region were 54 Bcf above the 5-year average after a net drawdown of 3 Bcf. At 3,449 Bcf, total working gas is above the 5-year historical range.

2006-11-22T07:43:00.000-08:00

Summary of Weekly Petroleum Data for the Week Ending November 17, 2006

U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the
week ending November 17, up 60,000 barrels per day from the previous week's
average. Refineries operated at 87.1 percent of their operable capacity last
week. Gasoline production inched slightly higher last week compared to the
previous week, averaging 8.7 million barrels per day, while distillate fuel
production increased as well, averaging nearly 4.1 million barrels per day.

U.S. crude oil imports averaged 10.5 million barrels per day last week, up over
1.0 million barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged nearly 10.0 million barrels per day. Total
motor gasoline imports (including both finished gasoline and gasoline blending
components) last week averaged 1.2 million barrels per day. Distillate fuel
imports averaged 205,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) jumped by 5.1 million barrels compared to the previous week.
At 341.1 million barrels, U.S. crude oil inventories remain well above the upper
end of the average range for this time of year. Total motor gasoline
inventories increased by 1.4 million barrels last week, but remain in the lower
half of the average range. Distillate fuel inventories fell by 1.2 million
barrels, but remain in the upper half of the average range for this time of
year. A decline in ultra-low-sulfur diesel fuel inventories more than
compensated for a slight increase in low-sulfur diesel fuel (15 ppm to 500 ppm
sulfur), while high-sulfur distillate fuel (heating oil) inventories inched
slightly lower. Total commercial petroleum inventories rose by 3.8 million
barrels last week, and remain above the upper end of the average range for this
time of year.

Total products supplied over the last four-week period has averaged nearly 21.1
million barrels per day, or 2.9 percent more than averaged over the same period
last year. Over the last four weeks, motor gasoline demand has averaged nearly
9.3 million barrels per day, or 1.9 percent above the same period last year.
Distillate fuel demand has averaged over 4.4 million barrels per day over the
last four weeks, or 9.2 percent above the same period last year. Jet fuel demand
is down 0.1 percent over the last four weeks compared to the same four-week
period last year.

2006-11-22T05:32:00.000-08:00

Crude-oil prices dropped Wednesday as traders awaited the weekly U.S. oil inventory report, a day after climbing above $60 a barrel on news of temporary supply disruptions.

Analysts are expecting the weekly report to show that U.S. supply of gasoline and distillates, which include heating oil and diesel fuel, dropped for the seventh straight week.

"Day-to-day events and commentary will continue to push prices up and down in the short term, but until something new of significant fundamental import surfaces, prices will most likely remain fairly close to the current range," said John Kilduff at Fimat USA.

Light sweet crude for January delivery fell 23 cents to $59.94 a barrel in electronic trading on the New York Mercantile Exchange by midday in Europe. On London's ICE Futures exchange, January Brent was down 26 cents to $60.13 a barrel.

Meanwhile Wednesday, gunmen in Nigeria seized seven hostages from an Italian oil supply vessel off the southern coast. Two private security contractors confirmed the overnight incident on a vessel belonging to Agip, a subsidiary of Italian oil giant Eni SpA.

The kidnappings were the latest in a series of attacks on oil installations in the volatile Niger Delta, where most of Nigeria's oil is produced. Each attack raises market concern about how the violence may affect the oil supply.

Oil rose above $60 on Tuesday following news that the Trans-Alaska Pipeline was flowing at just 25 percent of its normal 800,000 barrel-a-day capacity, as strong winds disrupted tanker loading. Also, traders worried about shutdowns at Exxon Mobil Corp.'s refinery in Baytown, Texas, America's biggest at 562,500 barrels a day, and Citgo's 156,000 barrel-a-day refinery in Corpus Christie, Texas.

Oil prices have fallen by about 23 percent since hitting an all-time trading high above $78 a barrel in mid-July. They haven't settled above $62 a barrel since Oct. 1, despite the Organization of Petroleum Exporting Countries' announcement in mid-October that it would reduce output by 1.2 million barrels a day.

Skepticism that OPEC members are committing to production cuts, as well as milder-than-normal U.S. temperatures this fall, have moderated prices.

In other Nymex trading, heating oil futures dropped 1.35 cent to $1.7196 a gallon, unleaded gasoline was down 1.82 cents at $1.6145 and natural gas futures fell 1.9 cents to $7.969 per 1,000 cubic feet.

2006-11-21T14:48:00.000-08:00

Natural Gas prices pulled back on Tuesday, declining by 5% ahead of tomorrow's Natural Gas Inventory data. This 1 month chart of $NATGAS (Natural Gas Continuous Contract) shows the tremendous volatility of the market in recent weeks.

Due to the Thanksgiving holidays both Petroleum and Natural Gas Inventory Data will be released on Wednesday. Oil-Profits.Org will have both numbers immediately after they are released.

2006-11-21T13:02:00.000-08:00

December natural gas fell 24.9 cents to $7.93 per million British thermal units Monday afternoon. "The short-term uptrend continues to meet solid resistance near $8.26," said Darin Newsom, a senior analyst at DTN.

January crude fell 55 cents to $58.42 a barrel. Oil-product prices were mixed with December heating oil down 1.49 cents at $1.654 a gallon and December unleaded gas up 0.89 cent at $1.55 a gallon.

2006-11-21T07:38:00.000-08:00

Oil prices climbed Tuesday amid temporary trouble with an Alaskan pipeline and a couple of U.S. refinery outages.

Still, milder-than-normal U.S. temperatures and skepticism that OPEC members are committing to production cuts helped moderate the price increase.

Light sweet crude for January delivery rose 98 cents to $59.78 a barrel in late morning trading on the New York Mercantile Exchange.

On Friday, the December crude contract had closed at $55.81 a barrel, the lowest settlement for crude since June 15, 2005.

"The market is due for a bounce, and we're getting some of that," said Tom Bentz, a broker at BNP Paribas Commodity Futures in New York. "Throw in the Alaskan news, and here we go."

The Trans-Alaska Pipeline is flowing at 25 percent of its normal capacity due to high winds, the Alyeska Pipeline Service Co. said late Monday, according to Dow Jones Newswires. Also, there have been shutdowns at ExxonMobil Corp.'s refinery in Baytown, Texas, the country's biggest at 562,500 barrels a day, and Citgo's 156,000 barrel-a-day refinery in Corpus Christie, Texas.

However, analysts don't expect oil prices to jump too high, as doubts remain that OPEC members are reducing oil exports as planned. The Organization of Petroleum Exporting Countries, which is scheduled to meet in Nigeria on Dec. 14, announced an output cut of 1.2 million barrels a day last month. The cartel may make further cuts at its next meeting.

In an interview with Nigeria's This Day newspaper, OPEC President Edmund Daukoru acknowledged that some group members weren't complying with the cut, confirming market suspicions.

In other Nymex trading, heating oil futures rose 4.37 cents to $1.7145 a gallon, unleaded gasoline rose 4.32 cents at $1.5975 a gallon, and natural gas futures rose 3.7 cents to $8.056 per 1,000 cubic feet.

January Brent at London's ICE Futures exchange climbed 92 cents to $59.90 a barrel.

Traders were also positioning themselves ahead of the weekly U.S. oil inventory reports, to be released Wednesday. Analysts are expecting inventories of gasoline and distillates _ which include heating oil and diesel fuel _ to drop.

Because the New York Mercantile Exchange will be closed Thursday and Friday for the Thanksgiving holiday, trading has been light this week. With fewer players in the market, price swings are often larger than they would normally be.

2006-11-20T13:24:00.000-08:00

This 7 month chart of $NATGAS (Natural Gas Continuous Contract) shows that the price of Natural Gas recently broke through over head resistance. This is a very bullish signal heading into the Winter heating season.

2006-11-20T07:30:00.000-08:00

Crude-oil prices slid Monday as the market gauged OPEC nations' cohesion in oil cuts and noted ample winter supplies because of a so-far mild autumn.

An increase in supply from non-OPEC countries has also eased prices in the January contract that started trading Monday, said Victor Shum, energy analyst with Purvin & Gertz in Singapore.

Light sweet crude for January delivery was down 35 cents to $58.62 a barrel in electronic trading on the New York Mercantile Exchange near midday in Europe. January Brent at London's ICE Futures exchange was down 43 cents to $58.56 a barrel.

On Friday, the December light sweet crude contract closed at $55.81 a barrel. It was the lowest settlement for the front-month crude contract since June 15, 2005.

"The concern for the market is how real is the cutback in OPEC supply, the rising growth in supply from non-OPEC nations and the fact that winter weather in the northern hemisphere has not turned cold," Shum said.

"Going forward, I think weather will remain a wild card," he said. "Also, in less than a month's time, OPEC will meet again, and there is already talk of further cuts, which has underpinned prices."

The Organization of Petroleum Exporting Countries, which is scheduled to meet in Nigeria on Dec. 14, announced an output cut of 1.2 million barrels a day last month. But traders have been skeptical that the Vienna-based cartel will stick to its pledge at a time of historically high prices.

In other Nymex trading, heating oil futures dropped 0.12 cent to $1.6677 a gallon, while gasoline futures fell 1.11 cents to $1.5300 a gallon. Natural gas futures were down 19.5 cents to $7.984 per 1,000 cubic feet.

2006-11-18T10:31:00.000-08:00

Oil company Chevron Corp. on Friday called off its planned acquisition of 122 retail gasoline stations in California owned by USA Petroleum Corp.

The deal was stopped "for business reasons," Chevron spokeswoman Stephanie Price said Friday, declining further comment.

San Ramon, Calif.-based Chevron, which last month reported a record quarterly profit of $5 billion, announced the deal in July and said then it planned to operate the stations under either the Chevron or Texaco brand.

Sen. Barbara Boxer, D-Calif., last month asked the Federal Trade Commission to "thoroughly review" Chevron's then-pending acquisition.

Boxer said the company and six other large refiners supplied about 90 percent of retail gas in the state, giving them "a significant effect" on prices in California due to their dominant market position.

Boxer's spokeswoman did not immediately return a call for comment Friday evening.

Thousand Oaks, Calif.-based USA Petroleum owns and operates retail gasoline stations primarily in California. Company representatives did not immediately return a call for comment.

Shares of Chevron gained 55 cents to end at $69.10 on the New York Stock Exchange.

2006-11-17T08:08:00.000-08:00

Crude oil fell to a 17-month low in New York as warm weather in the northern U.S. reduced fuel consumption and on signs OPEC won't cut production as much as pledged.

The Organization of Petroleum Exporting Countries agreed to reduce output by 1.2 million barrels a day starting Nov. 1. Prices plunged yesterday after consultant Oil Movements said November OPEC shipments will rise. The U.S. Climate Prediction Center said yesterday the El Nino weather pattern will cause a mild winter in the northern third of the U.S.

``A lot of what's happening is technical, we broke through $57 and that created a lot of selling,'' said Adam Sieminski, chief energy economist at Deutsche Bank Securities AG in New York. ``There's a huge amount of skepticism about the level of OPEC output. There seems to be a game right now between OPEC and the trading community.''

Crude oil for December delivery fell 61 cents, or 1.1 percent, to $55.65 a barrel at 10:01 a.m. on the New York Mercantile Exchange. Futures touched $54.86, the lowest since June 2005. The contract slumped $2.50 to $56.26 yesterday, the biggest one-day drop in 15 months. Prices, which plunged 6.6 percent this week, are down 1.2 percent from a year ago.

The December contract expires today. The more-active January contract fell 17 cents, or 0.3 percent, to $58.40 a barrel.

``There's always volatility when the contract expires,'' Sieminski said. ``You either have to sell it or take delivery. A lot of people obviously don't need deliveries next month.''

OPEC, which produces about 40 percent of the world's oil, will discuss production at its next meeting, which is scheduled for Dec. 14 in Abuja, Nigeria.

Home-Heating Demand

Home-heating demand in the Northeast, the region responsible for 80 percent of U.S. heating-oil use, will be 10 percent below normal through Nov. 24, said Weather Derivatives, a forecaster in Belton, Missouri.

``The decline is driven in large part by forecasts for mild weather,'' said Antoine Halff, a vice president and head of energy research at Fimat USA Inc. in New York. ``High distillate stocks in the U.S. are largely a legacy of the mild winter last year. I think this move lower will be short-lived because there have been a series of incredibly strong draws.''

Supplies of distillate fuel, including heating oil and diesel, fell 11 percent to 135 million barrels the past six weeks, according to an Energy Department report on Nov. 15. The declines left inventories last week 6.3 percent higher than the five-year average for this time of year, the department said.

Brent crude oil for January settlement fell 12 cents to $58.42 a barrel on the London-based ICE Futures exchange.

2006-11-16T09:55:00.000-08:00

Oil and energy company Repsol YPF reported a drop of 8.5 percent in third-quarter net profit on Thursday, pressured by lower output.

Net profit for the third quarter came to euro869 million ($1.11 billion), compared to euro950 million in the same period the previous year.

Adjusted net profit, Repsol's preferred measure of profitability, fell more than 11 percent to euro844 million ($1.08 billion) in the third quarter, compared to euro951 million a year earlier. Adjusted net profit excludes payments to minority shareholders and non-recurring items.

Repsol's total output fell 2.5 percent in the third quarter to 1.128 million barrels of oil equivalent a day from 1.157 million in the same period a year earlier. The decline was mostly attributed to contract renegotiations in Venezuela as the nation enforced its demand for a majority share in operations by foreign companies.

Shares in the Spanish-Argentine company were down 1.16 percent to euro27.47 ($35.14) in Madrid. They have been volatile in recent months amid speculation on potential merger and acquisition activity.

In early October, Sacyr-Vallehermoso SA became the latest in a string of Spanish construction companies to jump into the country's energy sector, when it started buying Repsol shares in a friendly buildup to create a stable group of core local shareholders in the oil giant.

Sacyr currently owns 10.1 percent of Repsol and has another 7 percent through options contracts, positioning itself as Repsol's top shareholder above Catalan savings bank La Caixa.

2006-11-15T07:45:00.000-08:00

Summary of Weekly Petroleum Data for the Week Ending November 10, 2006

U.S. crude oil refinery inputs averaged over 14.9 million barrels per day during
the week ending November 10, down 221,000 barrels per day from the previous
week's average. Refineries operated at 87.3 percent of their operable capacity
last week. Gasoline production decreased slightly last week compared to the
previous week, averaging nearly 8.7 million barrels per day, while distillate
fuel production remained relatively constant, averaging 4.0 million barrels per
day.

U.S. crude oil imports averaged nearly 9.5 million barrels per day last week,
down 337,000 from the previous week. Over the last four weeks, crude oil imports
have averaged 9.7 million barrels per day. Total motor gasoline imports
(including both finished gasoline and gasoline blending components) last week
averaged nearly 1.1 million barrels per day. Distillate fuel imports averaged
328,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) rose by 1.3 million barrels compared to the previous week.
At 336.0 million barrels, U.S. crude oil inventories remain well above the upper
end of the average range for this time of year. Total motor gasoline
inventories dropped by 3.7 million barrels last week, and are now in the lower
half of the average range. Distillate fuel inventories fell by 3.6 million
barrels, and are in the upper half of the average range for this time of year.
A very slight increase in high-sulfur distillate fuel (heating oil) inventories
was more than compensated by a significant decline in diesel fuel (both
ultra-low-sulfur and 15 ppm to 500 ppm sulfur) inventories. Total commercial
petroleum inventories declined by 9.0 million barrels last week, but remain
above the upper end of the average range for this time of year.

Total products supplied over the last four-week period has averaged over 21.3
million barrels per day, or 4.8 percent more than averaged over the same period
last year (when Hurricanes Katrina and Rita lowered demand levels). Over the
last four weeks, motor gasoline demand has averaged over 9.3 million barrels per
day, or 3.1 percent above the same period last year. Distillate fuel demand has
averaged nearly 4.5 million barrels per day over the last four weeks, or 9.5
percent above the same period last year. Jet fuel demand is up 4.1 percent over
the last four weeks compared to the same four-week period last year.

2006-11-15T06:33:00.000-08:00

Oil prices edged up Wednesday as traders awaited the release of the weekly U.S. inventory report.

Mild weather in much of the Northern Hemisphere is dampening demand for heating oil and natural gas, however.

Light sweet crude for December delivery on the New York Mercantile Exchange rose 29 cents to $58.57 a barrel in electronic trading by midday in Europe.

On London's ICE Futures exchange, December Brent crude gained 30 cents to $59.14 a barrel. That contract expires later Wednesday.

After declining 25 percent from a summer peak above $78 a barrel, oil prices have hung close to the $60 level over the past month, even as the Organization of Petroleum Exporting Countries announced a 1.2 million barrel a day production cut and violence in Nigeria raised supply worries.

"For the first time in a while the market appears in a somewhat somnolent state: comfortable with current price levels and lulled by the lack of urgency from the geopolitical sphere," Mike Fitzpatrick, a vice president for energy risk management at Fimat USA, told Dow Jones Newswires.

Commodities analyst Mark Pervan, with Daiwa Securities in Melbourne, Australia, suggested the market was positioning ahead of the weekly U.S. inventories report, which comes out later Wednesday.

"Generally, most of the price catalysts for price taking are not active," Pervan said. "Instead we have mild winter weather in the United States, quiet in the Middle East and we're between OPEC meetings."

Vienna's PVM Oil Associates noted "the coming winter months could be milder than expected."

"According to the (U.S.) National Weather Service, heating oil consumption should be some 30 percent lower than average this week," PVM said. It added that "heating oil stocks in Germany, Europe's largest consumer, have been increasing markedly lately."

Last week showed declines in U.S. supplies of gasoline and diesel fuel, though oil and natural gas supplies are still ample _ above the average for this time of year.

Market participants are bracing for what could be another mixed report.

U.S. commercial crude inventories are expected to have risen by an average of 900,000 barrels in the week to Nov. 10, a Dow Jones survey of eight analysts showed.

Any bearish signal from this, however, is likely to be offset by a predicted 1 million-barrel drop in stocks of distillates, comprising diesel and heating oil.

In other Nymex trading, heating oil futures rose 0.48 cent to $1.66800 a gallon, and unleaded gas by more than a penny to $1.5570 a gallon. Natural gas futures were steady at $7.973 per 1,000 cubic feet.

Last week the International Energy Agency trimmed its outlook for 2006 global oil demand growth to 1.1 percent from 1.2 percent. The forecast for growth in demand for 2007 was maintained at 1.7 percent.

2006-11-14T07:28:00.000-08:00

Oil held near $59 a barrel Tuesday after a two-day slide triggered in part by weaker-than-expected heating oil demand in the United States, the world's biggest consumer.

U.S. crude rose 8 cents to $58.66 a barrel after sliding $1.01 on Monday. London Brent crude was up 24 cents at $59.29.

Unseasonably mild temperatures in the U.S., the world's biggest heating oil market, are expected to leave demand about 16 percent below normal this week, the National Weather Service said.

U.S. heating oil stocks are nearly 7 percent above last year's level, and analysts polled by Reuters see distillate stocks - including heating oil - having fallen only 390,000 barrels last week in inventory data due Wednesday.

"Inventory levels are too high, with heating oil inventories ultra-high. But energy demand should pick up with winter," said Tony Nunan, manager at Mitsubishi Corp.'s risk management unit.

The International Energy Agency said Friday oil stocks in industrialized nations rose 1.15 million barrels per day (bpd) during the third quarter, the biggest rise since 1991.

Crude stocks in the U.S. are seen rising another 750,000 barrels in the week to Nov. 10, despite an agreement by OPEC to cut output 1.2 million bpd from November in an effort by the producers group to stem a 25 percent price slide since mid-July.

A Gulf source familiar with Saudi Arabia's policy told Reuters on Monday the world's top oil exporter will enforce its 380,000-bpd OPEC cut in full until the end of the year.

But refining sources told Reuters the kingdom will ship more to some customers next month in Asia, which takes nearly half its exports.

Since the beginning of October, U.S. and Brent crude have traded at $58 to $62 a barrel, with speculative hedge funds playing a part in keeping prices in this range.

They have sold when the price begins to break higher and bought as it nears the bottom of the six-week range, analysts and traders said.

The latest data from U.S. regulatory body the Commodity Futures Trading Commission showed speculators on the New York Mercantile Exchange cut net crude short positions in the week ended Nov. 7, taking their overall position to around neutral.

"This lack of commitment and a net position which is neutral should partly explain the flat price swings that we currently have," said Olivier Jakob, analyst at Petromatrix.

Oil is down nearly $20 from its mid-July peak of $78.40 and has recently been hovering near the bottom of a range of $57 to $62 that has held since early October.

2006-11-13T08:05:00.000-08:00

High crude oil prices can wreck global economies, U.S. Energy Secretary Sam Bodman said on Monday.

"It is not an understatement to say ... that high oil prices can literally wreck economies," Bodman told a conference hosted by the Middle East Institute. Bodman did not specify whether current crude oil prices were too high.

High prices "can restrict development in a way that stifles business growth and, more notably, inhibits improvements in the health and well-being of so many around the world," Bodman said.

2006-11-10T06:47:00.000-08:00

Russia's Finance Minister said Friday that oil giant BP PLC's Russian joint venture had paid out more than $1.1 billion in back taxes for 2002-2003, a news agency reported.

Finance Minister Alexei Kudrin said that most of the money would be transferred to the budget of the Tyumen region where the company is based, with a portion also going into federal coffers.

Earlier, the Vedomosti daily had reported that TNK-BP had transferred $1.5 billion to the budget, citing three unidentified sources close to the company.

Marina Dracheva, the TNK-BP spokeswoman, would not confirm how much had been paid. "This payment will not affect our financial results for this year, nor our investment plans for the future," she told The Associated Press.

TNK-BP has come under increasing pressure in recent weeks, with prosecutors alleging that the company has failed to fulfill the terms of its gas field licenses.

In a note to investors, Deutsche Bank said that the report of the back-tax payment added up to more bad news. "Some investors were still hoping for a material reduction in the back-tax claims," the note said.

2006-11-09T08:38:00.000-08:00

The Energy Department said natural-gas inventories fell 7 billion cubic feet for the week ended Nov. 3, marking the second-weekly decline of the heating season.

Total stocks now stand at 3.445 trillion cubic feet, up 225 billion cubic feet from the year-ago level, and 246 billion cubic feet above the five-year average, the government data said. December natural gas rose 21.7 cents to $8.04 per million British thermal units.

2006-11-09T07:20:00.000-08:00

Oil rose almost a dollar to more than $60 a barrel on Thursday, supported by OPEC supply cuts and a drop in fuel stockpiles in top oil consumer the United States.

OPEC is lowering output and some members have said the group may cut supply further in December. The cutback comes as oil demand is nearing its seasonal peak in the northern hemisphere winter.

"There is rising product demand, rising crude demand and OPEC is cutting output," said Mike Wittner, analyst at investment bank Calyon. "Global demand will get us back to mid-$60s crude by December."

U.S. crude was up 72 cents at $60.55 a barrel by 1244 GMT, adding to Wednesday's gain. London Brent rose $1.05 to $60.64.

Gulf members of OPEC said on Wednesday they were fully committed to the 1.2 million barrels per day (bpd) cut agreed from November, but said markets remained oversupplied for now.

2006-11-08T13:08:00.000-08:00

Devon Energy Corp., the biggest independent oil and natural-gas producer in the U.S, said costs to double output at an Alberta oil-sands project may be about a third higher than the initial stage.

Adding daily output of 35,000 barrels a day by 2011 at its Jackfish project may cost C$600 million ($530 million) to C$750 million, the Oklahoma City-based company said in a filing with provincial regulators. The first phase cost about C$550 million, said Chris Seasons, president of Devon's Canadian unit.

``We are seeing some inflationary pressures for sure,'' Seasons, 46, said in a telephone interview. The new estimate is ``quite broad. Will it capture it? I hope so but I'm not 100 percent confident of that.''

Devon's increased estimate reflects rising labor costs as high prices spark a boom in projects to extract oil from Alberta's tar-like deposits, Seasons said. Spending of as much as C$125 billion by Devon and other companies will almost triple production from Alberta's oil-soaked sand to 3 million barrels a day by 2015, Canada's National Energy Board has said.

Once regulatory approval is granted and cost estimates are finalized, Devon will consider sanctioning the expansion in 2007, Seasons said yesterday. The project could be deferred if rising costs mean the project won't generate enough profit, he said.

The expansion's cost was pegged at $500 million in August 2005, according to Devon's Web site.

Each phase of Jackfish will develop recoverable reserves of more than 300 million barrels, he said. The project is located about 140 kilometers (87 miles) south of Fort McMurray, a northern Alberta city that is the hub of oil-sands developments.

Soaring Labor Costs

Another company building an oil-sands project in the region is Nexen Inc. Higher labor costs contributed to Nexen and partner Opti Canada Inc. last month raising the estimated cost of their project 10 percent to C$4.6 billion. The price tag has jumped 21 percent from a February forecast, Nexen said in October.

Royal Dutch Shell Plc's Canadian unit said in July costs for an 100,000-barrel-a-day expansion of an oil-sands project may reach C$12.8 billion, up from an August 2005 estimate of $7.3 billion and the original target of C$4 billion.

The oil-sands boom means companies supplying equipment and contractors to build the projects aren't reducing their fees even though oil and gas prices have fallen, said Steve Laut, president of Canadian Natural Resources Ltd.

Cost pressures on oil-sands projects near Fort McMurray ``are very, very high,'' he said yesterday at a press conference. ``Fort McMurray is like a world on its own, there is still a lot of activity.''

Calgary-based Canadian Natural estimates spending C$6.8 billion on the first phase of an oil-sands project scheduled to produce 110,000 barrels of oil a day by 2008.

Jackfish Output

The first phase of Devon's Jackfish is scheduled to begin production next year and reach capacity in 2008. Phase two aims to start construction in 2008 and production in 2010, according to an application submitted to Alberta energy regulator.

The two phases of Jackfish are expected to produce oil for several decades, according to the filing.

Devon's daily output is equivalent to about 600,000 barrels of oil. Alberta's tar-like deposits represent ``a significant piece of our long-term strategy for the company,'' Seasons said.

Devon is the largest U.S. oil and gas producer among companies that don't own refineries or chemicals plants.

2006-11-08T06:50:00.000-08:00

Oil prices slid below $59 a barrel Tuesday as traders focused on a coming snapshot of U.S. supplies that will likely show modest increases in crude and gasoline inventories.

Light, sweet crude for December delivery dropped $1.09, to settle at $58.93 a barrel, on the New York Mercantile Exchange. Prices had gained 88 cents in Monday's trading after armed protesters shut down a Nigerian oil pumping station.

"Traders are still looking for clues for clear direction," said Ken Hasegawa, an analyst with Himawari CX in Tokyo.

The long-term outlook, however, appeared bullish, with the International Energy Agency saying that governments around the globe must substantially increase their investment in the infrastructure that carries energy supplies to prevent a global shortage by 2030.

In its 2006 World Energy Outlook, the IEA said global energy needs will surge 53 percent by 2030. More than 70 percent of that increase is seen coming from developing countries, led by China and India.

Oil prices have retreated sharply from a summertime high above $78 a barrel, trading in a range of about $57 to $61 a barrel over the past month as traders weigh the latest weather and economic forecasts against OPEC's plans to curb supplies by 1.2 million barrels a day.

Some members of the Organization of the Petroleum Exporting Countries are concerned that prices have already fallen too far from their July peak.

OPEC President Edmund Daukoru, also Nigeria's oil minister, said the oil cartel might need to further cut its output, but that it doesn't have a specific price floor or band that it wants to defend.

"OPEC doesn't have a rigid floor," Daukoru told reporters Tuesday during a visit to South Korea. Setting a target price band "is not really applicable to the fluid, free market."

Daukoru described the current price of oil as "low." OPEC's next meeting is scheduled for December.

"One cut really didn't do much to buoy the market," said Tom Hartmann, commodity broker at Altavest Worldwide Trading Inc. in Mission Viejo, Calif. "We're still fighting large supply issues," and mild weather in the U.S. will also limit heating demand, he said.

Meanwhile, in Nigeria, an American and a Briton kidnapped from a ship mapping petroleum deposits off the nation's oil-rich southern coast were released Tuesday, government and company officials said. The two men taken hostage Thursday were employed by a Norwegian firm working with Chevron Corp.

Last week's report on U.S. energy supplies showed that crude oil inventories rose by 2 million barrels, to 334.3 million. Demand is currently low because the cold winter season in the Northern Hemisphere has yet to set in.

Vienna's PVM Oil Associates predicted that Wednesday's U.S. inventory figures will "show a modest increase of crude stocks by 290,000 barrels, due to healthy import figures."

In other Nymex trading Tuesday, heating oil futures fell by 3.81 cents, to settle at $1.6803 a gallon, unleaded gasoline futures fell a half-cent, to settle at $1.5241 a gallon, and natural gas futures jumped 26.5 cents, to settle at $7.755 per 1,000 cubic feet.