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Monday, January 31, 2011

Brent oil surges above $101 on Egypt uncertainty

Oil rigs are seen in Midland, Texas May 9, 2008. REUTERS/Jessica Rinaldi
Oil rigs are seen in Midland, Texas May 9, 2008.
Credit: Reuters/Jessica Rinaldi

Egyptian President Hosni Mubarak overhauled his government to try to defuse a popular uprising but angry protesters rejected the changes and said he must surrender power. The Suez Canal continued to operate normally.
Prices were choppy earlier, with traders reassessing Friday's price surge after fears over contagion failed to materialize at the weekend.
OPEC Secretary General Abdullah al-Badri said the producer group would boost oil supply in the event of a real shortage, but did not expect current unrest in Egypt to affect the Suez Canal or SUMED pipeline oil flows.
Cold weather supporting heating fuel demand and supportive economic data from the United States in the form of better Midwest factory activity and firmer consumer spending also helped keep bullish price momentum intact.
In London, ICE Brent crude for March rose $1.36 to $100.78 a barrel by 12:41 p.m. EST, having reached $101.08, the highest since prices reached $103.29 on September 29, 2008.
U.S. crude oil for March delivery rose $2.20 to $91.54 a barrel, trading as high as $91.75. Analysts and brokers expect Brent's push above $100 to help U.S. crude retest resistance at the $92.58 peak from January 3.
The U.S. price strength helped narrow the near-record discount versus Brent. Brent's spread to U.S. benchmark West Texas Intermediate crude widened to more than $12 a barrel last week.
"Momentum is up. Traders are buying dips on fears that things could escalate further in the Middle East and spread to other countries," said Tom Bentz, broker at BNP Paribas Commodity Futures Inc in New York.
"Everything is still moving and there is no loss of shipping. But there are still concerns -- nothing has gone away."
Egypt is not a major oil producer but protests and demands for political change there come two weeks after Tunisia's president was overthrown. Investor worries that oil-producing states in the region may face similar protests are keeping crude prices lifted.
Egypt controls the Suez Canal and the Suez-Mediterranean (SUMED) Pipeline, which between them moved over 2 million barrels per day (bpd) of crude and oil products in 2009.
Shipping has so far proceeded as normal through the 192-km (120-mile) Suez Canal shipping choke point but port operations have been slowed by the protests.
OPEC ministers will discuss oil output policy on the sidelines of a conference in Saudi Arabia next month, an OPEC delegate told Reuters.
Ministers are scheduled to meet on February 22 in Riyadh with counterparts from oil-consuming nations and the International Energy Agency at the International Energy Forum.
Saudi Oil Minister Ali al-Naimi believes oil markets are relatively balanced. Naimi told an industry conference on Monday that the price spike had more to do with the value of the dollar and the behavior of oil traders.
The dollar weakened against a basket of currencies, dropping 0.49 percent as euro zone inflation topped forecasts, supporting the European currency.

PetroChina offers $1bn for 50% share in INEOS refining

The INEOS refinery at Grangemouth, ScotlandLONDON (ICIS)--INEOS has been offered $1bn (€740m) by PetroChinafor a 50% share in its European refining operation, it said on Monday.
The business includes the refineries at Grangemouth in Scotland and Lavera in France.
“This new partnership will secure investment and the long-term sustainability of both sites in a highly competitive market and ensure we continue to be Europe’s leading independent crude oil refiner,” said Calum MacLean, CEO of INEOS Refining.
The partnership with PetroChina, for which a framework agreement was entered on 10 January 2011, would comprise a trading joint venture (JV) and a refining JV, INEOS added.
“This offer is an important step on the way to forming a strategic partnership with PetroChina,” said INEOS chairman Jim Ratcliffe.
Ratcliffe added that the JV would allow INEOS to remain fully committed to its refining business as well as present opportunities to further develop its interests in China.
Core to INEOS was an agreement signed with PetroChina’s ultimate parent company, China National Petroleum Corporation (CNPC) to share refining and petrochemical technology and expertise. The agreement gives INEOS the opportunity to lever its technology and expertise into the China market.
In addition, the JV would aid PetroChina’s strategy of building a broader business platform in Europe and of becoming a leading international energy company, INEOS said.
The geographic location of the refineries are strategically important – Grangemouth provides utilities for essential UK pipeline links with gas fields in the North Sea and provides most of Scotland’s gasoline, while Lavera supplies fuel by pipelines into France, Switzerland and southern Germany.
INEOS and PetroChina would now work towards forming the proposed JVs in the second quarter of 2011.
“We now intend to evaluate our future refinancing options for the group over the first half of 2011,” Ratcliffe said.
A new Swiss company would be incorporated to hold the INEOS investment, while the two JVs would be operated independently of the INEOS Group, it said.
INEOS Refining is Europe’s largest independent oil refiner with an annual turnover of about $15bn. The Grangemouth and Lavera refineries, formerly owned by BP, can process 410,000 bbl/day of crude to produce about 20m tonnes of fuels a year.
($1 = €0.74)

Tuesday, January 25, 2011

Perstorp Announces TDI Price Hike

Leading specialty chemicals company Perstorp will be increasing prices for its TDI product range (ScuranateTM) effective February 1st, 2011, or as existing contract terms permit.
In Europe prices will be increased by 200 Euros/MT over the next 2 months. Prices for exports to the Middle East/ Africa regions will be raised by a minimum of USD 200/MT as of February 1st 2011. The increase will apply to all product qualities.
Prices are being increased to recover lost margins due to sharp increases in raw materials prices over the past 4 months.