NEWS / Foreign Exchange

Crude Market Update

• OPEC daily basket hits a new all time high of $88.13/barrel on Monday
• The Turkish President said overnight that a decision has been made on how to proceed against the PKK, noting that the US has been informed about the decision || The President declined to specify on what decision has been made
• Indonesian Central Bank: Notes in its post rate announcement statement that it is monitoring oil prices
• Korea Development Institute says that oil prices may fuel South Korean inflation and weigh down on the economy
• French Budget Minister: One should get used to higher oil prices || Government cannot lower oil taxes || Oil prices could have an impact on growth
• Algerian Oil Min: Says OPEC will seek to stabilize the market at its December meeting
• Norwegian Central Bank Governor: Expects the country??™s oil fund to grow to $600B over the next 4 to 5 years from the current level of $350B
• Indonesia??™s Pertamina shut down its 120K bpd Dumai refinery yesterday for scheduled maintenance
• Saudi Aramco cut its official selling prices for US-bound December crude to their lowest levels on record. Prices for all grades were cut by $4.25/barrel.
• In an attempt to ease shortages China National Petroleum and China Petrochemical have delayed maintenance at some of their oil processing plants
• Australia??™s Macquarie Group boosted their average Q4 and 2008 WTI oil price forecasts by approximately 20% overnight, forecasting Q4 oil prices of $79.83/barrel, and 2008 oil prices of $76/barrel
• Energy consumers and speculators are scrambling to take out options contracts to insure themselves against oil prices rising above $100 a barrel ??“ a further sign of growing expectations of a spike in the crude market. Some have even taken out contracts to protect themselves against prices rising to $250 a barrel in the next two years. [Financial Times]
• "PEAK oil is now", proclaims a hard-hitting study of global resources by the German-based Energy Watch Group. Its predictions are dire: global oil output peaked in 2006 at 81million barrels per day, will slide to 58million bpd by 2020 and 39million bpd by 2030. This is in sharp contrast to the International Energy Agency, which predicts 105million bpd by 2020 and 116million by 2030, though offline, there is a growing view at the IEA that its projections are too optimistic.  [Press & Journal]
• Accuweather: Low pressure that is now moving across the northern Plains and Upper Midwest is accompanied by the coldest air of the season. As the low moves into eastern Canada, lake-effect snow and gusty winds will spread across the Great Lakes while the cold air on Tuesday and Wednesday spreads into the East and South.