Browsing all articles tagged with Oil

Banks In The Dark Over $15 Billion of Promised Rosneft M&A business

Banks that assist Russian oil company Rosneft finance its $55 billion buyout of rival have been left waiting for their payback a share in $15 billion in asset sales projected to follow the deal.

State oil company Rosneft’s takeover of this year aimed to generate a major oil group producing more oil than however it also tightened the Russian government’s grip on the country’s energy sector.

The asset sales promised by Rosneft Chief Executive Igor Sechin would offload less-profitable businesses to turn the company into the major oil player the CEO has stated he wants it to be. The delay demonstrate Rosneft has a lot on its plate integrating and that the sales are on the back burner.

Rosneft had dangled the juicy divestment mandates at the banks in exchange for a $29.8 billion loan the largest in Russia’s history on good terms, all the lending banks are waiting. We thought asset sales and refinancing bonds would kick start straight following the closing.

Rosneft’s slow motion is annoying the banks as they would earn fat fees from advising the oil giant on the asset sales this year, which would assist boost M&A revenues in an otherwise arid deal making landscape.

M&A activity across all sectors is losing 7 percent in Europe, Africa and Middle East since January partly due to the impact of the euro zone crisis on business confidence.

Banks that uphold big balance sheets throughout the financial crisis have been hoping to use this muscle to win lucrative M&A advisory business from competitor which had to shrink partly to meet tough European capital rules.

Banks frequently use their balance sheets to offer cheap loans to corporate clients to secure higher margin business such as share or bond issues or M&A work.

Big balance sheets helped Deutsche Bank and Barclays to achieve number 2 and 3 rankings in M&A league tables previous year, challenging US rival Goldman Sachs which had the top slot.


Gold down Still Posts Greatest Weekly Addition in 3 Months

Bullion knock down in choppy trade on Friday on as investors took profits, however the market still posted its greatest weekly gain in three months on strong physical demand following bullion hit a two year low previous week.

In untimely trade gold climbed more than 1 percent following the US Commerce Department reported that economic growth regained speed in the first quarter, however not as much as expected. Gold gave back those early additions and slipped into negative territory as options related selling kicked in, and losses in industrial commodities including copper and crude oil also weighed.

Gold has recovered more than half of the loss of $225 an ounce incurred among April 12 and 16.

Investors in exchange traded funds headed for the exits concerned regarding potential central bank sales of gold and uncertainty over the outlook for US monetary stimulus.

Erica Rannestad, precious metals analyst at the CPM Group said that there is still some long liquidation in the market, signifying that some investors are still repositioning themselves and that leaves the price susceptible to some sideways actions.

Spot gold was down 0.6 percent at $1,457.76 per ounce by 3:28 p.m. EDT (1928 GMT), off the session high of $1,484.80.

US gold futures for June delivery settled down $8.40 at $1,484.80 per ounce. Trading volume was almost 10 percent above its 30-day average.

Robin Bhar, Societe General Analyst said that GDP is encouraging for precious metal as the whole sell off in the yellow metal was linked to perceptions that the US economy was getting stronger and stronger.

US first quarter growth expanded at a 2.5 percent annual rate, less then economists expectations for 3 percent. In the meantime, a separate report on consumer sentiment demonstrates a drop from the previous month.

Silver also climbed early, striking a 10 day high of $24.82. Then it slipped down 1.7 percent in late trade to $23.91 per ounce.

Holdings of the biggest gold backed exchange traded fund, the SPDR Gold Trust dropped 0.25 percent to 1,090.27 tonnes on Thursday from 1,092.98 on Wednesday. Holdings are at their weakest level since September 2009.

Among platinum group metals, platinum added 0.4 percent to $1,472.49 per ounce, as palladium was down 0.4 percent at $677.25 per ounce.


Gold Plunge on Stronger US Greenback, ETF outflows

Yellow metal knock down more than 1 percent on Tuesday as a stronger US dollar put pressure on prices and as the outflow from the world’s leading gold exchange-traded fund known as ETF accelerated and accentuated an investor shift towards equities and other assets.

At the midsession, bullion along with markets in stocks, oil, bonds and other commodities, was roiled temporarily by a bogus report of explosions at the White House. Bullion pulled up off its lows on the fake report.

The early turn down retraced some of gold’s 1.6 percent rally from a day earlier, which was encouraged by strong physical purchases.

Heraeus Precious Metals Management metals trader David Lee said that he believe the whole commodities space came off because of the weak PMI out of Europe and the weak PMI out of China, particularly Germany. That combination is dragging everything from silver to copper to platinum and palladium down. And yellow metal is going down in sympathy as it’s part of the basket.

Traders stated gold prices chop down to session lows in overnight dealings when the US dollar firmed in reaction to weaker April manufacturing statistics from both Germany and China, and then lingered at the lower levels.

Shortly following 1 p.m. (1700 GMT), precious metal prices pulled up off their lows, US government debt prices surged briefly and stocks knock down sharply following a false tweet from the Associated Press stated there had been two explosions at the White House and that President Barack Obama had been injured.

Gold knock down 1.4 percent to a session low of $1,405.44 per ounce and had pared losses to $1,412.70 by 3:14 EDT (1914 GMT), off 0.87 percent. Precious metal has dropped 15 percent this year.

US gold futures for June delivery were losing 0.61 percent at $1,412.30 per ounce.

Traders said gold’s retreat off the one week high it reached a day earlier reproduce investor nervousness regarding holding on to precious metal positions for long. Many yellow metal bulls were caught by surprise a week ago when bullion slid to its biggest-ever daily loss in Greenback terms.

Gold was also under pressure from a strong dollar and bounce back of equity markets following sales of new US single family homes climbed in March, indicating the housing market recovery remains on track.

Commerzbank analyst Carsten Fritsch said that bullion is lower as well as other commodities, including base metals oil and crude, which knock down following weaker than expected economic data out of China and Europe, which gave a boost to the dollar.

In other markets, copper knock down to an 18-month low and crude oil was down nearly 1 percent because data revealed a slowdown in business activity in Germany and China in April. The figures heightened worries over global growth.


Alaska Lawmakers Slash Oil Taxes Hope to Spur Output

Alaska official on Sunday gave final approval to a bill cutting state oil production taxes in a change supporters stated was needed to enhanced deteriorating output from aging fields but which critics say will severely damage the state’s finances.

The new system permitted by the Republican dominated legislature does away with a methodology that boost tax rates as oil prices climb, a centerpiece of the aggressive tax legislation championed by ex- governor Sarah Palin.

Alaska will compel a base rate of 35 percent on oil companies net profits in the state, swaping a 25 percent base rate that augmented by 0.4 percentage points for every $1 over a net wellhead price of $30.

Although the old tax system produced billions of dollars in surpluses for the state treasury, it meant Alaska’s tax rate topped 50 percent when oil prices were high. Palin’s successor, Governor Sean Parnell  said the cut would set the stage for future growth as the state tries to reverse decades of dropping oil output.

Parnell said in a statement we are indicating to the world that Alaska is back ready to compete, and ready to supply additional energy once again.

According to state Department of Revenue statistics Oil production, from Alaska’s North Slope peaked in 1988 at over 2 million barrels per day led by the Prudhoe Bay field which averaged 1.6 million bpd that year. Production in 2012 averaged 579,400 bpd, with Prudhoe Bay production losing to 265,200 bpd.

The tax change was supported by the three major North Slope oil producers, Conoco Phillips, Exxon Mobil Corp and BP Plc. The companies argued that Alaska’s current tax system is disciplinary and makes the state less attractive than other regions, such as Alberta and North Dakota.

Republicans stated the changes would ultimately coax additional oil into the aged Trans Alaska Pipeline. However minority Democrats railed against it, with Senator Bill Wielechowski saying it handed over billions of dollars, with no sequence attached.


Oil Rose to $113 per barrel, Heads for 2nd Monthly Addition

Oil augmented to $113 per barrel on Friday, bearing for a second monthly addition supported by investor expectation of further monetary easing that could encourage economic growth and support oil demand, and worries regarding supplies.

Federal Reserve Chairman Ben Bernanke may admit the US central bank is aggressively considering an additional round of monetary easing in his Jackson Hole speech today.

Brent crude was climbed up 57 cents to $113.22 per barrel by 0947 GMT, following declining to a session low of $112.36 per barrel. US crude increased 38 cents to $95.00 per barrel.

Natalie Rampono, commodity strategist at ANZ stated that the oil is most likely going to trade sideways on Friday until the Bernanke speech, which will probably offer further of a downside risk as the markets have previously priced in a policy easing response.

The US dollar lost its strength in advance of the speech by the Fed chairman, who could frustrate markets if he stops short of indicating a further bond buying program is looming, a conclusion which many analysts articulated is a strong likelihood.

In addition of stimulus expectations, a plunge in supply from the North Sea source of the crude which supports the Brent contract, due to oilfield upholding as well as hostility in Syria and stress over Iran’s nuclear program also lent support.

Tony Machacek, a broker at Jefferies Bache said that essentially the market could come down; however there is this general fear factor about Syria, Iran, Israel and hurricanes.

Furthermore, the 17-nations shared currency has directed to stabilize, which has maybe assist oil creep higher. Short covering earlier than the weekend could also keeps the market floating.

Oil for October delivery climbed 39 cents to $95.01 per barrel during the Friday’s trading session.

Natural gas for October delivery increased 2 cents to $2.77 per British thermal units. September gasoline knocks down 1 cent to $3.08 per gallon.


Oil Firm below $113 per barrel; Isaac stokes supply worries

Oil was stable under $113 per barrel during the Tuesday’s session, because tropical storm Isaac turns off the forced companies and Gulf of Mexico to close down US oil production.

J.P. Morgan analysts, led by Colin Fenton said that as US Gulf Coast refiners are working near full exploitation, the likelihood for interruption to oil product markets is particularly obvious.

Additions may be restricted by doubts that hurricane damage could prompt refiners to cut crude oil purchases during the coming weeks and on heightened prospects that the International Energy Agency which is known as IEA may release oil treasury as soon as September.

Brent crude climbed 33 cents to $112.59 per barrel by 0857 GMT, as US crude added 57 cents to $96.04 per barrel.

Brent augmented to as high as $115.50 during the Monday’s session, increasing almost $2 as US refiners shut facilities on the Gulf Coast in front of Isaac, previous to closing at $112.26, as US oil had hit a session peak of $97.72 per barrel.

Regulators said on Monday energy companies had cut crude production by 78 percent in the Gulf of Mexico.

Shutdowns are projected to rise over the next few days in the region that accounts for almost a fourth of US oil production and 7 percent of its natural gas output.

Gasoline futures for September delivery increased 0.1% to $3.16 per gallon during the Tuesday’s trading session, following attainment their highest settlement since April on Monday.

Crude futures for October delivery fall 6 cents, or 0.1%, to $95.41 per barrel during Asian trading session, accumulating to a 0.7% loss during the New York Mercantile Exchange session.