Chris Termeer's Blog, page 2

Current Gasoline Price Continues Downward Trend

The average price of retail gas in New Hampshire dropped 5.3 cents a gallon last week to its recent average of $3.42 per gallon, according to a daily poll regional gas stations.

Maine’s average price of retail gas also declines 4.9 cents a gallon in the previous week to its recent average of $3.53 a gallon, according to the daily poll of gasoline stations throughout that state.

The decline in both states reflects the same trend seen in the national average price of gasoline that shed 1.6 cents a gallon in the past week to its average of $3.50 per gallon.

Adding the change in New Hampshire’s gasoline prices during the previous week, the average price of gasoline in the state is lower by 42.6 cents compared to the same period last year and 21.3 cents below last month. For Maine, the recent gasoline price average was lower by 40.7 cents compared to the same day last year and 21.5 cents below last month.

The current gasoline price at the national level reflects a decline of 14.5 cents a gallon in the past month and is currently lower by 34.7 cents compared to the same day last year.

The slow downward movement in the prices of gasoline has continued for one more week. While unmatched, the drop in the national average of gasoline has definitely pleased drivers who are used to huge price increases that come during springtime. As Memorial Day draws closer, motorists would be happy to know that gasoline prices would likely stay lower compared to their levels last year.

By: Chris Termeer

Vitol Group: Crude Prices Can Go Higher or Lower than $100

The current crude prices can go lower or higher than $100 per barrel, with neither movements dominating at present, aside from a longer term trend for slight gains, according to the Vitol Group’s head.

For the first time in almost nine months, the crude futures prices of Brent recently fell lower than $100 and have fluctuated in both directions since then, trading at a crude price per barrel of $100.53 in the latest London trading.

In Abu Dhabi, Mr. Ian Taylor, the Chief Executive Officer of the biggest privately held oil trader in the world, said that he does not see any huge movement in the price of oil during the coming days. He added that nothing is special with a price of around $100, and that it can go slightly lower or higher.

Ali Al-Naimi, the oil minister of Saudi Arabia, also said recently that an oil price of $100 per barrel is reasonable and that (such a price) won’t choke the growth of the world economy. He made the statement when the crude futures price of Brent ended at $108.17 per barrel. Brent is down by 10 percent this 2013 after growing 3.5 percent last year.

Vital is one of a few privately owned commodity trading firms that operate from Switzerland together with Gunvor Group Ltd and Trafigura Beheer BV. The costs for energy firms are increasing with, for example, increased regulatory costs getting into profit margins, said Taylor.

By: Chris Termeer

Petrobas Opts for Selective Oil Investment in Brazil Round

Many are skeptical about Petrobas’ capacity to invest in oil exploration in Brazil, which is set to auction offshore oil fields this coming May. The state-run oil company has significantly large liabilities, leaving the company with limited funds for the forthcoming bidding rounds. Petrobas is neck-deep in debt as it spent more than $90 billion of borrowed funds for deepwater oil exploration during the past few years. It also needs to fund infrastructure projects already in the pipeline.

Observers say that Petrobas’ financial constraints are a big boost for Exxon Mobil, which is reportedly intent on acquiring new oil assets from the Latin America region.

After a 6-year hiatus, Brazil is back to auctioning off its offshore oil assets and expects to rake in up to $5 billion worth of sales.  A specialist from Medley Global Advisers noted that this is Brazil’s biggest oil sale for 2013 and presents huge opportunities for global oil companies to gain additional acreage.

However, Petrobas reportedly said that it might still submit bids, but only for a select few, particularly focusing on existing oil fields. Some believe that the company might forego oil assets that haven’t been explored in view of its limited funds.

Exxon, on the other hand, didn’t issue any word about its participation in the May 2013 Brazilian auction.  Shell, meanwhile, disclosed that it will review all assets being offered for sale.

Close to 290 oil blocks will be opened for sale. Brazil confirmed that these could hold about 36 billion barrels of oil equivalent (boe).

Aside from Exxon and Shell, other bid participants may include BP, Repsol, and China Petroleum.  A total of 71 oil firms have signified their intention to place their bids for the Round 11 auction.

Petrobas’ exploration and production head, Jose Formigli, mentioned that the company’s strategy is based on selective investing and forging partnerships with other oil companies. He believes that companies engaged in the oil investment and exploration business benefit well from conducting these, particularly under joint-venture or partnership-type arrangements.

While Brazil is definitely a hot spot for oil explorers, observers say that protocols requiring the use of local resources, employees and service providers could dampen global interest in the Round 11 auction.  Such a policy is clearly a tactic employed by the country to boost local employment and economic development.

By: Chris Termeer

Gasoline Prices Fall in NYC

New York’s average retail price of gasoline has decreased 3.5 cents a gallon last week, putting the state’s average gasoline price today at $3.83 per gallon, according to the daily poll of gasoline stations throughout the state. This average is higher compared to the nationwide average, which has shed 4 cents a gallon in the past week to reach the current gasoline price average of $3.58 per gallon, according to price tracking statistics.

Including New York’s gas price change in the previous week, the recent prices in the state were lower by 29.4 cents a gallon compared to the same day last year and 11.5 cents a gallon down versus last month. The nationwide average has dropped 9.3 cents a gallon over the past month and is currently lower by 32.8 cents a gallon compared to the same day last year.

Petroleum analysts and other experts have cited that the daily amount spent by Americans for gasoline at present is lower by $108 million compared to last year. Prices in almost all the nation’s metropolitan areas are cheaper right now than last year.

Overall, 300 of these regions saw lower quarter one gasoline prices compared to last year, with two of them posting no major change. More costly markets this year consist of areas in New York, Vermont, Pennsylvania and Massachusetts. The most costly market in the nation is in Honolulu. However, the current price in the area is only 3 cents higher compared to last year’s rate.

By: Chris Termeer

Current Oil Price in Asian Trading Lifted by Japanese Equities

The current oil price was up in Asian trading, lifted by strong equities in Japan as the market got better from a weak U.S. employment report, said analysts.

On the NYMEX, the U.S. benchmark for May delivery Chris Termeer

OPEC Considers Current Oil Prices as Beneficial

The current oil prices are not dangerous to the world economy; it is, in fact, contrary to that because they are supportive of energy investments, according to the recent statement of the secretary general of the Organization of Petroleum Exporting Countries (OPEC).

The average crude price per barrel for this year is about $110.

After early indications of stabilization in the global economy, the previous month has faced consecutive setbacks as the recovery of the United States and Europe stuttered.

Abdallah Al-Badri, OPEC’s secretary general, said during the group’s crude conference in Paris that they believe the current level of oil prices is supportive of the crude future prices they expect.

He added that the price of oil at this time is comfortable for both consumers and producers.

Furthermore, the secretary general said that, in case prices drop to particular levels, plenty of investors may be forced to abandon various marginal projects.

Meanwhile, the crude oil production of OPEC for the month of April is on its way to reach its lowest level since October of 2011 as tension in Libya, leaks in Nigeria’s pipeline and disruptions in Iraq’s exports pull supplies lower, according to recent market surveys.

The survey showed that Saudi Arabia, the top exporter of OPEC, was still restricting its output.

The oil group is set to convene on the 31st of May in Vienna and look into its production policy for this year’s second half.

By: Chris Termeer

Current Oil Price Drops

The current oil price dropped as traders obtained profits after the latest increases in prices and with a report showing a weaker than anticipated manufacturing activity in the United States.

On the New York Mercantile Exchange, light, sweet, crude for delivery in May moved 36 cents lower to a crude price per barrel of $96.87 during midday trading, Bangkok time. The contract moved 65 cents higher to settle at $97.23 per barrel during the last trading day of the past week. Trading was closed earlier last week for a holiday.

Oil increased over $4 in the latest trading sessions, pushed by indications of a stronger economy in the United States. The increase for the month of March was 5.6 percent. Higher per barrel oil prices encourage investors to take in gains.

Oil prices also moved lower following a report of an industry group that shows a slowdown in the manufacturing activity of the United State for the month of March. The manufacturing index of the Institute for Supply Management declined from February’s 54.2 to 51.3 in March. The index signifies a sector’s expansion if it is higher than 50.

The price of oil in today’s trading declined mainly because of profit taking. Prices increased in the past week because of a boosted performance by equities trading as well as a weaker U.S. currency, according to energy analyst Victor Shum of Singapore’s Purvin & Gertz.

In other NYMEX trading, wholesale gasoline moved 0.4 cent lower to a price of $3.106 per gallon. The cost of heating oil also shed 0.7 cent to $3.04 per gallon. The price of natural gas moved 3.4 cents down to $3.99 per thousand cubic feet.

By: Chris Termeer