SUDAN WATCH: Russia has temporarily overtaken Saudi Arabia as the world’s largest oil producer

Tuesday, October 06, 2009

Russia has temporarily overtaken Saudi Arabia as the world’s largest oil producer

Report by KBC Market Research Desk, KBC Bank, Tue, Oct 6 2009:
Weaker dollar pushes gold higher above 1000$/oz
On Monday Brent was little changed at below 70$, pausing from the previous session's losses, as concerns about a halting U.S. economic recovery and sluggish energy demand continued to weight on crude prices. However, better than expected U.S. ISM in services sector and speculations that Gulf Arab states were in secret talks with Russia, China, Japan and France to replace greenback with a basket of currencies in oil trading strengthened WTI.

Today, oil prices stayed flat, as investors waited for more definitive signs of demand recovery and weighed the impact of a report that Gulf Arab states were in secret talks to replace the U.S. dollar with a basket of currencies in oil trading.

Russia's president Dmitry Medvedev said that his country was not interested in oil prices going too high saying that a fair oil price should be at around 80- 90$/b.

Supply from the 11 OPEC members bound by output targets rose to 26.40 mln.b/d from 26.2 mln.b/d in August, according to the survey of oil firms, OPEC officials and analysts.

Russia’s oil production reached 10.01mln.b/d in September, a record, and breaching the 10mln.b/d mark for the first time. OPEC output cuts mean Russia has temporarily overtaken Saudi Arabia as the world’s largest oil producer.

Deutsche Bank increased its 2010 oil price forecast by 10$ to 65$/b on Monday, still below consensus even as it priced in improved economic prospects and a weaker U.S. dollar, while it maintained a more bullish view for 2011.

South Sudan's semi-autonomous government has approved plans to build a 2 bln.$ oil refinery, the southern energy minister said on Sunday, a step toward boosting its oil infrastructure ahead of a referendum on secession. Sudan, emerging from decades of north-south civil war, produces more than 500kb/d of crude from fields mostly in the landlocked south. But the refineries and pipelines are in the north, giving Khartoum control of the precious commodity

A world economic upturn risks support speculation that could dent the recovery, French Economy Minister Christine Lagarde said. She expected tougher control and regulation of the commodities market was needed and oil trading was a particular concern.

U.S. gasoline demand peaked in 2007 and will decline into the future as efficiency and the development of biofuels and high-tech cars like hybrids speed up, Exxon Mobil Corp's top executive said.

Iraq is expected to put off passing its long-delayed oil and gas legislation until after national polls in January, the head of the Iraqi parliament's oil and gas committee said.

The amount of crude oil held at sea on tankers is likely to fall as consumption grows in the fourth quarter, the chief executive of the world's biggest independent oil tanker group Frontline said.

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