NEWS / Foreign Exchange

Crude Market Update

• Mexico's Pemex to shut oil wells with 600K (approximately 20% of its production) of output due to a cold front in the Gulf of Mexico || Co. says that it should be able to resume full production onces the cold front passes ??“ wires
• According to reports citing the Venezuelan Energy Minister this weekend, OPEC will consider creating a basket of currencies for oil pricing at its mid-November summit due to the decline in the US Dollar.  [Saturday]
• Qatari Oil Minister: OPEC has no plans to price oil in any currency other than dollars || OPEC pricing oil away from dollars is not on the agenda yet || Current oil prices are the result of geopolitics, not a lack of supply || OPEC would be unable to cover Iran??™s oil output if stopped
• Sudan??™s oil output to top 515K bpd in 2007; Sudan holds stocks of 5B barrels [Wires citing ministry official]
• Royal Dutch Shell shut a catalytic cracker feed hydrotreater unit at its Deer Park, Texas refinery on Saturday due to a small fire [wire summary report] [rdsa.uk]
• The Sunday Times ran an article titled ???Will Bush Really Bomb Iran??? detailing the current situation surrounding the Iranian nuclear program and the international response. [The Sunday Times]
• Kuwait named Finance Min Bader al-Humaidhi as the new oil minister
• Royal Dutch Shell Executive: High oil prices are impacting oil product demand and growth || European oil product demand is slowing || US product demand growth is moderate || Not giving up on building a refinery in China || Still teaming up with KPC on refineries globally || Will divest smaller refineries globally || Too focus investment on larger refineries [rdsa.uk]
• Chevron wins a 10-year extension to operate a Thai gas field [cvx]
• Nippon Oil guides November crude refining volume unchanged y/y || To restart Negishi refinery on November 17 [5001.jp]
• The head of the UN nuclear watchdog said he had no evidence Iran was working actively to build nuclear weapons [WSJ]
• If oil prices have difficulty clearing the $100 milestone, psychology might be one reason why. Expectations for tight year-end supply and other factors that have driven crude to record heights aren't likely to diminish soon. But psychological resistance to triple-figure oil and a nagging feeling that prices have run too high, too soon could keep crude from reaching $100 a barrel before year's end, as traders decide to lock in gains instead, analysts say. [WSJ]
• There is a growing concern that record high oil prices and the 10-year high of local currency against the dollar will have a negative impact on the Korean economy. In particular, many economic experts say the recent trend of oil price hike and the won-dollar exchange rate will continue into next year, and the government estimation of next year's economic growth of 5 percent would not be easy to achieve. [Dong-A Ilbo]
• Crude oil prices appear increasingly likely to hit the record in real terms record, reached during the second oil crisis in 1979, as nominal prices on Monday continued rising well above $90 a barrel. [Financial Times]
• Although many recent weather forecasts point to a warmer-than-normal heating season, the 21 analysts participating in the latest Natural Gas Week Quarterly Price Scoreboard are not exactly throwing caution to the (winter) wind. For the fourth quarter, the average analyst forecast for the natural gas composite spot wellhead price slid 35?? to $6.94/MMBtu, from a previous average of $7.29. [Natural Gas Week]
• Nigerian militants Friday mounted their second attack on offshore oil facilities in less than a week, raiding an oil production vessel operated by Italy's Eni, kidnapping six workers and forcing the company to shut in 50,000 barrels per day of output. The attack raised fears of further disruptions to production in the strife-ridden country after a five-month cease-fire. [International Oil Daily]
• NHC: Tropical storm Noel is located at 18.0 North, 72.3 West about 40 miles South of Port-Auprince Hati || The storm is moving North by Northwest at 5mph and has maximum wins of 45mph and a minimum central pressure of 1002MB || No other tropical cyclone formations are expected over the next 48 hours
• The latest weather derivatives currently forecast that the average temperature in the US will be 2.1 degrees above its historical average over the next 1 to 7 days, with temperatures in the Southwest 3.7 degrees above normal, and temperatures in the North-central 2.6 degrees above normal.
• Accuweather: The Northeast had a chilly start to the week as a low pressure system exited the region and ushered in cool winds. As high pressure moves in Monday, weather conditions will calm down. In contrast, the tropics are active with Tropical Storm Noel intensifying in the Caribbean.