Oil could hit $220 per barrel on the fear of the Libya and Algeria, cautions Nomura

Barclays Capital said 1 m barrels of Libyan output is "locked in", with the other 0.6 m at risk. While Saudi Arabia may respond by raising the output, it takes time and its oil is not a substitute for "Sweet Crude the Libya".

The crisis escalating triggered falls more on the global stock exchanges. Wall Street was down 1pc in trade at the beginning and the FTSE 100 1. 2pc. The Dow Jones index has shed more than 300 points during the three days of 12,075.

Nomura said a closure in Libya and Algeria would reduce global 2.9 m b/d supply and reduce the ability of spare OPEC b/2.1 m d, comparable to levels at the beginning of the Gulf war and worse than during the 2008 spike when prices hit $147.

Two price shocks preceded by - or triggered - a recession in Europe and the United States. Fatih Birol, Chief Economist, International Energy Agency said the last rising already become prices a "serious risk" for the fragile economies of OECD block.

Some analysts fear the underlying image is worse than officially recognized doubting Saudi claims of alternative ample capacity. Wikileaks cable cited comments by geologist of Saudi Aramco oil giant that Kingdom reserves had been exaggerated by 40pc. A second cable cited U.S. diplomats asking if the Saudis "more empowered to make prices downwards for an extended period."

Report from Nomura, who consider the scenario catastrophic to a real crisis in the Gulf, said recent oil price shocks have shown a pattern of three floors, with a final blow-off price in the final phase. The current crisis is the first step.

Soaring oil prices create a dilemma for banks, nasty because they inflationary if caused by the robust global growth, but the deflationist if caused by a tightening of supply which acts as a tax on consumption of nations. Big oil exporters tend to save additional revenues for first price spikes, so the initial effect is draining global demand.

The current image contains elements of both, with an extra touch of liquidity created by the US Federal Reserve leaking into the global system and play havoc with commodity prices.

Secretary of the Treasury Tim Geithner told us Wednesday that the global economy is relatively stong to "manage" the oil shock, insisting on the fact that central banks "have extensive experience in the management of these things."

The European Central Bank (ECB) responded to skyrocketing oil in July 2008 by raising rates even if the Germany and the Italy were in recession at that time there. Nout Wellink, the Governor of Dutch of the ECB, said that this was an error policy.

Circumstances are different this time still also dark. ECB chief Jean-Claude Trichet scored last month that the Bank will be "look at" the hump of prices in the short term, but the ECB rhetoric has since then harden. Fed doves will probably give more weight to the deflationary risks.

Jeremy Leggett, a leader of the task force industry UK peak oil and energy security, says the crisis Mid-East "shows the extreme fragility of the world system." People don't realize the proximity we a potential jump if that agitation reached critical mass in OPEC countries enough. "Governments must develop contingency plans and get cracking on proactive steps while we still have time", he says.

Charles Robertson in the Capital of the Renaissance, said concern actual harass investors is what happens in oil-rich Province Saudi Arabia Eastern home of Kingdom restless minority Shi'ite. The Saudis produced with FP6 11 of world production, but a more significant share of exports.

It does y potential serious tensions and not only among the Shiites. High unemployment and the youth bulge means disorders could be anywhere in the country. If Saudi Arabia or Iran is gobbled up, we have a serious problem. »

On Wednesday, the Saudi King Abdullah has unveiled $restriction of social aid for his people.

Energy & Utilities and positions vacant Oil & Gas jobs Telegraph

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Oil prices rising soaring to $120 per barrel Middle East concern

At the same time, light crude sweet from NYC in April, known as West Texas Intermediate (WTI), rose to $103.41, a level last seen in late September 2008.

"Oil prices continued to surge higher Libya events dominated headlines and the oil market", said Westhouse Securities analyst Dave Hart.

"Leaving the country of high-quality crude is being significantly affected due to the exodus of foreign personnel."

Brent jumped high $119.79 per barrel at the beginning Thursday, return to approximately $113.53 through the middle of the morning. NY crude was higher at $100.72 $2.67 per barrel.

The King of Saudi Arabia last night announced $36bn (£ 22bn) additional benefits for his people to try to stop the wave of uprisings Arab extends to largest exporter of oil in the world.

Market analysts warns also Brent crude could hit $220 per barrel.

Nomura said oil prices products team is likely to unexplored highs of storage for the next few weeks if political unrest spreads in Algeria, reduction in capacity of world reserve margins thin light just before the first Gulf war.

Prices on the part of the world and copper fell for the fourth consecutive day, as investors reduce their exposure to risk while the sanctuary of gold, Swiss francs and US Government bond pink price.

Disturbance arising from the revolt in the global exporter No. 12 Libya cut at least 400,000 barrels per day (BPD) output bpd countries 1.6 m, according to Reuters calculations.

Soaring oil prices threatens to put an end to the recovery in advanced economies and add other inflationary pressures in booming emerging markets.

According to UBS, an increase of $10 of oil prices will shave 0.3 percentage point by global growth.

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Oil rises to $104 per barrel

Brent crude rose above $ 104 per barrel after Israel says two warships Iranian expected to navigate through the Suez canal in Syria road.  Photo: AP

Gross Brent rose above $ 104 per barrel later Wednesday and stay there Thursday after avigdor lieberman, Israeli Foreign Minister said two warships Iranians planned navigate through the Suez canal in Syria road.

Apart from the fresh tensions Israel-Iran oil traders concerned also stirring the Bahrain where the riot police killed demonstrators and the oil-rich Libya.

They fear the kind of disturbance that reverses the Presidents of the Egypt and the Tunisia could extend to other Middle East oil-producing nations.

"Trouble in the Middle East are on the agenda of events at Bahrain and Saudi have placed in barrels of political tensions, said Rob Montefusco, a financial Sucden oil trader."

Ken Hasegawa, Manager of Newedge broker Japan, derivatives says oil could easily hits $105 today, according to economic data out of the United States later.

Mr. Lieberman called the move later "provocation" by the Iran whose Israel sees a significant threat to nuclear weapons program OPEC nation.

However, the Suez Canal by the Egypt Authority said today was "informed of the cancellation of two regular journeys of two Iranian warships.

Channel, official who refused to be named, "no new date has been set to cross the Suez in convoy south from the Red Sea", told Reuters.

Military vessels passing through the channel must first obtain permission from the Ministry of defence and the Ministry of Foreign Affairs.

The official identified vessels like Alvand and Kharg Island, said that ships were near the port of Jeddah, Saudi Arabia Red Sea. Shipping experts said that the Alvand frigate Kharg refueller.

Last time, Iranian warships crossed the channel is in 1979.

In January, disorders in Egypt helped push Brent over $ 100 per barrel. The last approach by Iran between five days after the Egyptian President Hosni Mubarak resigned and Israeli leaders have expressed concerns that the Iran may operate the transition period.

Energy & Utilities and positions vacant Oil & Gas jobs Telegraph

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Oil rises to $104 per barrel in the middle of the Middle East tensions

Brent crude rose above $ 104 per barrel after Israel says two warships Iranian expected to navigate through the Suez canal in Syria road.  Photo: AP

Gross Brent rose above $ 104 per barrel later Wednesday and stay there Thursday after avigdor lieberman, Israeli Foreign Minister said two warships Iranians planned navigate through the Suez canal in Syria road.

Apart from the fresh tensions Israel-Iran oil traders concerned also stirring the Bahrain where the riot police killed demonstrators and the oil-rich Libya.

They fear the kind of disturbance that reverses the Presidents of the Egypt and the Tunisia could extend to other Middle East oil-producing nations.

"Trouble in the Middle East are on the agenda of events at Bahrain and Saudi have placed in barrels of political tensions, said Rob Montefusco, a financial Sucden oil trader."

Ken Hasegawa, Manager of Newedge broker Japan, derivatives says oil could easily hits $105 today, according to economic data out of the United States later.

Mr. Lieberman called the move later "provocation" by the Iran whose Israel sees a significant threat to nuclear weapons program OPEC nation.

However, the Suez Canal by the Egypt Authority said today was "informed of the cancellation of two regular journeys of two Iranian warships.

Channel, official who refused to be named, "no new date has been set to cross the Suez in convoy south from the Red Sea", told Reuters.

Military vessels passing through the channel must first obtain permission from the Ministry of defence and the Ministry of Foreign Affairs.

The official identified vessels like Alvand and Kharg Island, said that ships were near the port of Jeddah, Saudi Arabia Red Sea. Shipping experts said that the Alvand frigate Kharg refueller.

Last time, Iranian warships crossed the channel is in 1979.

In January, disorders in Egypt helped push Brent over $ 100 per barrel. The last approach by Iran between five days after the Egyptian President Hosni Mubarak resigned and Israeli leaders have expressed concerns that the Iran may operate the transition period.

Energy & Utilities and positions vacant Oil & Gas jobs Telegraph

View the original article here

Oil could hit $220 a barrel on Libya and Algeria fears, warns Nomura

Barclays Capital said 1m b/d of Libyan output is "shut in", with the other 0.6m at risk. While Saudi Arabia can step in by raising output, this takes time and its oil is not a substitute for Libya's "sweet crude".

The escalating crisis set off further falls on global bourses. Wall Street was down 1pc in early trading and the FTSE 100 fell 1.2pc. The Dow has shed more than 300 points over the past three days to 12,075.

Nomura said a shut-down in both Libya and Algeria would cut global supply by 2.9m b/d and reduce OPEC spare capacity to 2.1m b/d, comparable with levels at the onset of the Gulf War and worse than during the 2008 spike, when prices hit $147.

Both price shocks preceeded – or triggered – a recession in Europe and the US. Fatih Birol, chief economist for the International Energy Agency, said the latest price rise had already become a "serious risk" for the fragile economies of the OECD bloc.

Some analysts fear the underlying picture is worse that officially recognised, doubting Saudi claims of ample spare capacity. A Wikileaks cable cited comments by a geologist for the Saudi oil giant Aramco that the kingdom's reserves had been overstated by 40pc. A second cable cited US diplomats asking whether the Saudis "any longer have the power to drive prices down for a prolonged period".

Nomura's report, which does not examine the catastrophic scenario of a full-blown Gulf crisis, said past oil shocks have shown a three-stage pattern, with a final blow-off in prices in the final phase. The current crisis is at stage one.

Surging oil prices create a nasty dilemma for central banks since they are inflationary if caused by robust global growth, but deflationary if caused by a supply crunch that acts as a tax on consuming nations. The big oil exporters tend to save extra revenues from price spikes at first, so the initial effect is to drain global demand.

The current picture contains elements of both, with an added twist of liquidity created by the US Federal Reserve that is leaking into the global system and playing havoc with commodity pricing.

US Treasury Secretary Tim Geithner said on Wednesday that the world economy is stong enough to "handle" the oil shock, insisting that central banks "have a lot of experience in managing these things".

The European Central Bank (ECB) responded to the oil spike in July 2008 by raising rates even though Germany and Italy were in recession by then. Nout Wellink, the ECB's Dutch governor, said this had been a policy error.

Circumstances are different this time yet also murky. ECB chief Jean-Claude Trichet signalled last month that the bank will "look through" the short-term price hump, but ECB rhetoric has since turned more hawkish. Fed doves will undoubtedly give more weight to the deflationary risks.

Jeremy Leggett, a leader of the UK industry task force on peak oil and energy security, said the Mid-East crisis "shows the extreme fragility of the global system. People don't realise how close we are to a potential precipice if this unrest reaches critical mass in enough OPEC countries. Governments need to draw up emergency plans and get cracking on proactive measures while we still have time," he said.

Charles Robertson at Renaissance Capital said the real concern nagging investors is what will happen in Saudi Arabia's oil-rich Eastern Province, the home of the kingdom's restless Shi'ite minority. The Saudis produce 11.6pc of world output, but a much higher share of exports.

"There is potential for serious tension, and not just among the Shia. High unemployment and the youth bulge means unrest could be country-wide. If Saudi Arabia or Iran are engulfed, we have a serious problem."

On Wednesday Saudi King Abdullah unveiled $11bn of welfare projects for his people.

Energy & Utilities and Oil & Gas vacancies at Telegraph Jobs

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This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.

Oil could hit $220 a barrel on Libya and Algeria fears, warns Nomura

Barclays Capital said 1m b/d of Libyan output is "shut in", with the other 0.6m at risk. While Saudi Arabia can step in by raising output, this takes time and its oil is not a substitute for Libya's "sweet crude".

The escalating crisis set off further falls on global bourses. Wall Street was down 1pc in early trading and the FTSE 100 fell 1.2pc. The Dow has shed more than 300 points over the past three days to 12,075.

Nomura said a shut-down in both Libya and Algeria would cut global supply by 2.9m b/d and reduce OPEC spare capacity to 2.1m b/d, comparable with levels at the onset of the Gulf War and worse than during the 2008 spike, when prices hit $147.

Both price shocks preceeded – or triggered – a recession in Europe and the US. Fatih Birol, chief economist for the International Energy Agency, said the latest price rise had already become a "serious risk" for the fragile economies of the OECD bloc.

Some analysts fear the underlying picture is worse that officially recognised, doubting Saudi claims of ample spare capacity. A Wikileaks cable cited comments by a geologist for the Saudi oil giant Aramco that the kingdom's reserves had been overstated by 40pc. A second cable cited US diplomats asking whether the Saudis "any longer have the power to drive prices down for a prolonged period".

Nomura's report, which does not examine the catastrophic scenario of a full-blown Gulf crisis, said past oil shocks have shown a three-stage pattern, with a final blow-off in prices in the final phase. The current crisis is at stage one.

Surging oil prices create a nasty dilemma for central banks since they are inflationary if caused by robust global growth, but deflationary if caused by a supply crunch that acts as a tax on consuming nations. The big oil exporters tend to save extra revenues from price spikes at first, so the initial effect is to drain global demand.

The current picture contains elements of both, with an added twist of liquidity created by the US Federal Reserve that is leaking into the global system and playing havoc with commodity pricing.

US Treasury Secretary Tim Geithner said on Wednesday that the world economy is stong enough to "handle" the oil shock, insisting that central banks "have a lot of experience in managing these things".

The European Central Bank (ECB) responded to the oil spike in July 2008 by raising rates even though Germany and Italy were in recession by then. Nout Wellink, the ECB's Dutch governor, said this had been a policy error.

Circumstances are different this time yet also murky. ECB chief Jean-Claude Trichet signalled last month that the bank will "look through" the short-term price hump, but ECB rhetoric has since turned more hawkish. Fed doves will undoubtedly give more weight to the deflationary risks.

Jeremy Leggett, a leader of the UK industry task force on peak oil and energy security, said the Mid-East crisis "shows the extreme fragility of the global system. People don't realise how close we are to a potential precipice if this unrest reaches critical mass in enough OPEC countries. Governments need to draw up emergency plans and get cracking on proactive measures while we still have time," he said.

Charles Robertson at Renaissance Capital said the real concern nagging investors is what will happen in Saudi Arabia's oil-rich Eastern Province, the home of the kingdom's restless Shi'ite minority. The Saudis produce 11.6pc of world output, but a much higher share of exports.

"There is potential for serious tension, and not just among the Shia. High unemployment and the youth bulge means unrest could be country-wide. If Saudi Arabia or Iran are engulfed, we have a serious problem."

On Wednesday Saudi King Abdullah unveiled $11bn of welfare projects for his people.

Energy & Utilities and Oil & Gas vacancies at Telegraph Jobs

View the original article here

This post was made using the Auto Blogging Software from WebMagnates.org This line will not appear when posts are made after activating the software to full version.