OIL FUTURES:Oil Futures Back Above $100/Bbl After Upbeat Jobs Report.
May 6, 2011
By Dan Strumpf
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Oil futures staged a rebound Friday, a day after
their dramatic plunge below $100 a barrel, following a better-than-expected
April jobs report.
Light, sweet crude for June delivery jumped $2.36, or 2.3%, to $102.18
a barrel on the New York Mercantile Exchange. The contract reversed
earlier losses after falling as low as $94.63 a barrel intraday.
Brent crude on the ICE futures exchange advanced $3.22, or 2.9%, to
$114.02 a barrel.
The Labor Department's upbeat report on April nonfarm payrolls pulled
crude out of its lows. The agency said nonfarm payrolls rose 244,000
last month, with the private sector posting its strongest employment
gain in five years.
Economists surveyed by Dow Jones Newswires had forecast payrolls would
rise by just 185,000. The March data were revised upward slightly to
show an increase of 221,000 jobs, from a previous estimate of 216,000.
"The sentiment has changed from yesterday," said Raymond
Carbone, president of oil brokerage Paramount Options.
However, other points painted a mixed picture. Unemployment reached
9%, the Labor Department said, marking the first time monthly unemployment
rose in five months.
Reports on the health of the economy of the U.S., the world's largest
crude consumer, have taken on increased significance in the oil market
recently amid fears consumers are balking at $4-a-gallon gasoline prices
and demand isn't keeping up with elevated supply levels.
Such fears were the primary catalyst behind Thursday's sell-off, which
spread across the commodities markets. A weak U.S. jobless claims report
for last week and less-hawkish-than-expected comments on monetary policy
from Europe's top central banker triggered the initial bout of selling,
and the decline gathered steam as the day went on.
Crude prices gave up 8.6% Thursday, marking the biggest one-day percentage
decline since April 2009. The Nymex contract settled below the psychologically
important $100-a-barrel mark for the first time since March.
Market participants remain uncertain over whether crude prices have
yet found a floor. Analysts at Goldman Sachs, however, said they were
"wary" of future downside following such a dramatic decline.
"The sell-off yesterday has likely removed a large portion of
the risk premium that we believe has been embedded in oil prices, which
could suggest further downside may be limited from here," the analysts
said in a research report.
Front-month June reformulated gasoline blendstock, or RBOB, recently
rose 6.21 cent, or 2%, to $3.1575 a gallon. June heating oil climbed
5.12 cents, or 1.8%, to $2.9381 a gallon.
Statoil, Chesapeake adding Marcellus acreage
Mar 26, 2010
By OGJ editors
HOUSTON, Mar. 26 -- Statoil ASA has signed an agreement with Chesapeake
Energy Corp., Oklahoma City, that will add 59,000 net acres to Statoil’s
current 600,000 net acre positions in the Marcellus shale in the Appalachian
basin.
Statoil put the transaction cost at $253 million, or $4,325/acre.
As part of Statoil’s 2008 joint venture agreement with Chesapeake,
Statoil has the right to periodically acquire its share of leasehold
that Chesapeake continues to acquire in the Marcellus shale. Statoil
has now exercised such acquisition rights on a series of Chesapeake
Marcellus shale acquisitions.
Statoil has seen encouraging production performance since the entry
into the Marcellus play in late 2008. This new acreage is expected to
strengthen Statoil’s position and its cooperation with Chesapeake
as the largest lease holders in one of the most prospective US shale
gas plays.
The acquisition will enable the partnership to optimize its development
activity and secure additional developments in the play. Statoil expects
to continue to grow its Marcellus position together with Chesapeake
(OGJ, Feb. 1, 2010, p. 34).
Andy Winkle, vice-president for the Marcellus Asset, said, “We
were an early mover into the Marcellus and we will continue to build
a long term position in what we expect will become a legacy asset and
reach our goal of 50,000 b/d of oil equivalent production by 2012.”
Saudi Arabia arrests al-Qaeda terrorists targeting oil installations
Mar 26, 2010
Eric Watkins
OGJ oil Diplomacy Editor
LOS ANGELES, Mar. 26 -- Saudi Arabia, continuing its long-standing
efforts to protect the country’s oil facilities, announced the
arrest of more than 100 suspected militants linked to the terrorist
al-Qaeda organization.
Mansour al-Turki, spokesman for the ministry of interior, said the
suspected terrorists “were targeting the oil facilities in the
Eastern province, and they had plans that were about to be implemented.”
There was no statement concerning the exact date of the arrests or
which oil installations were targeted.
The interior ministry said the arrests were carried out over a period
of 5 months and resulted in the detention of 47 Saudis, 51 Yemenis,
a Somali, an Eritrean, and a Bangladeshi.
Most of the militants were arrested in the southern province of Jizan,
close to the border with Yemen. Belts of explosives, weapons, cameras,
documents, and computers were also seized, the ministry said.
According to al-Turki, the investigation has so far revealed “correspondence
between this organization and al-Qaeda's organization in Yemen.”
The Yemeni group, known as al-Qaeda in the Arabian Peninsula (AQAP),
recently issued a manifesto aimed at disrupting oil shipping in and
around the Arabian Peninsula, especially through the Bab al-Mandab Strait
at the entrance to the Red Sea.
At the time, the Al-Quds al-Arabi newspaper said, "The organization
does not need to recruit thousands but just few hundreds to implement
some of its aims, among them infiltrating into the Kingdom of Saudi
Arabia and the gulf countries where two thirds of the world's oil reserves
are (OGJ Online, Feb. 15, 2010).”
Henry Wilkinson of Janusian Security Consultants said most indications
are AQAP remains largely undiminished by counter-terrorist activity
in Yemen and represents “a consistent if not growing threat to
the oil sector and Western interests in the region.”
Justin Crump of the Stirling Assynt Business Intelligence Group agreed,
saying the target is credible, as hitting the oil industry is “a
persistent, stated objective of AQAP.” Crump added that an increase
in “hostile reconnaissance” near oil sites was picked up
nearly a year ago.
This week’s announcement follows a string of arrests and attacks
by al-Qaeda in Saudi Arabia over the past several years.
Proposals to build and operate liquefied natural gas (LNG) terminals worldwide continue to face opposition from government officials, citizens and environmental groups. Read more…
