| Iraqi oil output set to stay low - Yomiuri Shimbun
With public security still volatile, prospects for Iraqi oil production getting back into full swing are growing dim, according to oil industry officials.
Moves to restore oil production facilities also appear to have slowed in Iraq as fierce fighting continues and after a spate of kidnappings of foreign civilians.
Delays in increasing Iraqi oil output will push up the price of crude oil on international markets, which may have an adverse impact on Japanese and world economies, an industry expert said.
The Iraqi oil ministry has postponed indefinitely an international oil conference, originally slated for Sunday in Basra, southern Iraq.
The conference, intended as an opportunity for the ministry to brief U.S. and European oil majors on the country's oil development plans, has been postponed because of the worsening security situation. Hopes that Iraq could promote its oil development through investment of foreign capital appear to be gone for now.
According to the International Energy Agency, Iraq's crude oil production in March recovered to prewar levels of about 2.4 million barrels per day.
The recovery was chiefly due to resumed operation of some pipelines transporting crude oil from northern Iraq to a port in Turkey, restarting its oil shipments to European markets.
Major Japanese trading houses, including Mitsubishi Corp. and Itochu Corp., resumed crude oil imports via a port in southern Iraq last autumn.
The oil ministry of Iraq had forecast an increase in crude oil production to 2.8 million bpd during 2004, and hoped that it could increase production toward 5 million to 6 million bpd in the future.
Due to the ever-worsening security situation, as evidenced by the recent kidnappings, expectations of increased oil production have now faded.
The prevailing view in the market now is that unless the security situation improves, oil production in Iraq will remain in the neighborhood of 2.5 million bpd in the days ahead.
The Organization of Petroleum Exporting Countries has decided to cut its quota for oil production by 1 million bpd this month, and says it has no plans to increase quotas for the time being.
Should there be further delays in increasing Iraqi production, crude oil prices are likely to stay at current highs, pushing up prices of petroleum products, such as gasoline, with serious implications for corporate earnings and global economic growth.
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| Oil prices supported by violence in Iraq - Channel News
- Singapore
Oil prices climbed in trading, helped by escalating violence in oil-producer Iraq, as the market awaited the latest figures on US crude inventories, dealers said.
The price of benchmark Brent North Sea crude oil for May delivery won 16 cents to 33.50 dollars per barrel from 33.34 dollars on Thursday when the market in London shut for the Easter holiday weekend.
New York's reference light sweet crude May contract fell 34 cents from Monday to 37.50 dollars a barrel in pre-opening electronic deals.
"Over the weekend, there's been more unrest in Iraq, and that is bullish for prices," GNI-Man Financial analyst Lee Elliott said.
"A lot of people look more at the bullish incidents rather than the bearish ones," he said as traders looked ahead to the weekly US oil inventories, to be published Wednesday.
GNI-Man Financial was forecasting an increase of one million barrels of commercial crude oil inventories as well as a build of 1.5 million barrels of gasoline.
But he noted: "If there were to be suprise draws (falls) again, prices could go much higher."
Prices surged on both sides of the Atlantic late last week after the US Department of Energy announced a surprise drop in crude oil and gasoline inventories.
Dealers are nervous about the risk of gasoline shortages in the United States during the so-called summer driving season later this year.
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| US govt predicts world oil price to rise sharply by 2025 - Xinhua
Crude oil prices will increase sharply and reach about 51 dollars a barrel by 2025 due to rising energy needs in the world especially in developing nations, US Energy Department said on Wednesday.
The report by the department's Energy Information Administration (EIA) projected that global energy demand to grow about 54 percent by 2025. But demands in China, India and other developing countries will increase by a sharp 91 percent as these countries continue rapid industrial development.
The report said that strong economic growth in Asia will drive world energy prices in the next decade.
The Organization of Petroleum Exporting Countries (OPEC), which accounts for about a third of the world oil output at present, is expected to remain the major oil suppliers in 2025.
The oil prices in the world market are rising quickly this year with the price in the United States hit a 13-year high of more than 38 dollars a barrel in mid-March
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| China's hunger for oil, ore boost trade deficit - Reuters
China's exports rose more than 34 percent in the first three months of 2004, but a growing appetite for foreign oil, iron ore and soybeans helped push up the trade deficit to $8.4 billion.
China's trade balance has become a sensitive topic with some trading partners, especially the United States, where an election race is heating up.
The United States runs a large trade deficit with China and has called on Beijing to take steps to narrow it.
"China's foreign trade in the first quarter continued the strong growth of last year," the official Xinhua news agency said on Sunday.
"But due to strong demand for raw materials and crude oil ... there were three months of continuous trade deficits," Xinhua said.
Exports were $115.7 billion in the first quarter, up 34.1 percent from a year earlier, while imports were $124.1 billion, up 42.3 percent, it quoted customs figures as showing.
Imports of iron ore, soybeans and vegetable oil also saw strong growth, while imports of steel and cars fell, state television said.
China had a trade deficit of $7.9 billion in the first two months of the year, putting the March deficit at about $500 million, similar to the same month in 2003.
But in the first quarter of 2003, China's trade deficit was only about $1 billion.
Although China ended up with a trade surplus of more than $25 billion for all of 2003, that was down 16 percent from 2002 as the country bought more raw materials, components and machinery to fuel its booming industries.
Much of the import growth has come from other Asian countries such as Japan and South Korea, which now run surpluses with their up-and-coming neighbour.
But China's huge surplus with the United States, which grew 20 percent last year to more than $120 billion according to U.S. data, has become a hot political issue in the run-up to the U.S. presidential election in November.
State media did not provide first-quarter data for individual trade partners, but the most recent figures show that, in January, exports to the United States rose 24.7 percent from a year earlier while imports rose 21.2 percent.
Some U.S. politicians and industry leaders have accused China of unfair trade practices and blamed its fixed currency policy for keeping the price of its exports artificially low.
China's export engine has also been an important source of economic growth for the world's sixth-biggest economy.
In 2003, China's exports rose nearly 35 percent to more than $438 billion as its overall economy surged 9.1 percent.
Its fierce industrial expansion, which saw factory output grow 17 percent, helped boost imports almost 40 percent to just under $413 billion.
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| OPEC's oil production cut affects Zambian economy - Xinhua
The recent announcement by Oil Producing and Exporting Countries (OPEC) to cut world oil production by 4.0 percent will affect the Zambian economy during the second quarter of this year, the Bank of Zambia (BOZ) said on Thursday.
"This may translate to an increase in transport and production costs in the economy as upward adjustments of wholesale price and ultimately, retail prices of petroleum products could lead to increases in prices," Danny Kalyalya, deputy governor of the central bank, told journalists during the monthly media briefing.
The central bank official said the move will adversely affect production costs because petroleum products are inputs in most production processes and that this will contribute to a build up in inflationary pressures in the economy.
While acknowledging the improvements of the economy during the first quarter of this year, the official noted that the move by OPEC countries as well as the tensions in the Middle East will likely push up the prices of oil on the world market. Zambia is not a producer of oil and the country currently imports its oil from the Middle East.
Zambia has shown some overall improvements in the performance of the economy during the first quarter of the year attributed to the tight fiscal economic discipline the country has undertaken.
According to the bank statistics, the commercial bank's interest rates have continued to go down while the foreign exchange market has remained relatively favorable due to control measures put in place by the government as it strives to reach
the Highly Indebted Poor Countries (HIPC) completion point by June this year.
"The government is expected to continue containing expenditures within the program (reaching HIPC completion point) as favorable fiscal performance is a key prerequisite for macroeconomic stability," he said
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Research: Pig Manure Can Become Crude Oil - Associated Press
A University of Illinois research team is working on turning pig manure into a form of crude oil that could be refined to heat homes or generate electricity.
Years of research and fine-tuning are ahead before the idea could be commercially viable, but results so far indicate there might be big benefits for farmers and consumers, lead researcher Yanhui Zhang said.
"This is making more sense in terms of alternative energy or renewable energy and strategically for reducing our dependency on foreign oil," said Zhang, an associate professor of agricultural and biological engineering. "Definitely, there is potential in the long term."
The thermochemical conversion process uses intense heat and pressure to break down the molecular structure of manure into oil. It's much like the natural process that turns organic matter into oil over centuries, but in the laboratory the process can take as little as a half-hour.
A similar process is being used at a plant in Carthage, Mo., where tons of turkey entrails, feathers, fat and grease from a nearby Butterball turkey plant are converted into a light crude oil, said Julie DeYoung, a spokeswoman for Omaha, Neb.-based Conagra Foods, which operates the plant in a joint venture with Changing World Technologies of Long Island, N.Y.
Converting manure is sure to catch the attention of swine producers. Safe containment of livestock waste is costly for farmers, especially at large confinement operations where thousands of tons of manure are produced each year. Also, odors produced by swine farms have made them a nuisance to neighbors.
"If this ultimately becomes one of the silver bullets to help the industry, I'm absolutely in favor of it," said Jim Kaitschuk, executive director of the Illinois Pork Producers Association.
Zhang and his research team have found that converting manure into crude oil is possible in small batches, but much more research is needed to develop a continuously operating reaction chamber that could handle large amounts of manure. That is key to making the process practicable and economically viable.
Zhang predicted that one day a reactor the size of a home furnace could process the manure generated by 2,000 hogs at a cost of about $10 per barrel.
Big oil refineries are unlikely to purchase crude oil made from converted manure, Zhang said, because they aren't set up to refine it. But the oil could be used to fuel smaller electric or heating plants, or to make plastics, ink or asphalt, he said.
"Crude oil is our first raw material," he said. "If we can make it value-added, suddenly the whole economic picture becomes brighter."
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