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ENERGY MARKETS REPORT INCLUDING: BP has reported flaring and a breakdown at a refinery in Los Angeles

Last updated: 13:10 09 Sep 2010 BST, First published: 12:10 09 Sep 2010 BST

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WTI Crude futures moved higher during the European session, amid speculation that today’s DOE inventories will show a smaller increase in crude inventories than previously forecast.
 
Oil & Gas News:
•    Citigroup has cut its price forecasts for WTI Crude oil for delivery in 3 months to USD 74 from USD 78, and cut the 6 to 12 month forecast to USD 83 from USD 85. Citigroup also cut their forecasts for natural gas for delivery in 3 months to USD 4.25 and for delivery in 6 to 12 months to USD 4.50.
•    According to technical analysis by Petromatrix, Crude oil may drop to a lower trading range of between USD 65 and USD 75, if prices fall below USD 71.10.
•    The US EIA raised its forecast for 2010 world oil demand growth by 50,000 BPD, and now sees 1.62mln BPD Y/Y increase. However, the EIA cut their forecast for 2011 world oil demand growth by 100,000 BPD, and they now see 1.41mln BPD Y/Y.
 
OPEC News:
•    OPEC has reduced its oil production by 110,000 BPD to 0.4% to 29.11mln BPD in August according to survey by Platts.
•    OPEC has left their 2010, and 2011 global oil demand growth forecasts unchanged, but said that world demand for OPEC’s oil will be about 100,000 BPD lower than expected this year due to a slowing economic recovery and higher supplies from non-member countries. OPEC also met 53% of pledged supply curbs in August, up from 52% in July.
 
Corporate News:
•    KNOC said it was sticking by its GBP 1.67bln offer for Dana Petroleum after the UK oil company tried to squeeze out a higher bid with an independent valuation. KNOC is encouraging Dana shareholders to accept the offer by no later than 13:00BST on the 23rd September 2010.
•    Uganda will repossess the remainder of exploration area 3A from Tullow Oil, around the southern tip of oil-rich Lake Albert, because the block's licence has expired, a government official said yesterday.
•    Total has agreed to buy a 20% stake in Australia's Gladstone liquefied natural gas project from Santos and Malaysia's Petronas.
•    BP has reported flaring and a breakdown at a refinery in Los Angeles.
 
Geopolitical News:

•    China has expressed it opposition to additional sanctions imposed by South Korea on Iran, calling for further talks to resolve the situation.
 
**BP & the Gulf of Mexico Oil Spill**:

•    BP may have to push back the final kill of the blown-out Macondo well until the middle or even the end of this month, Thad Allen said.
•    BP in its internal investigation into the Gulf of Mexico oil spill, shows other companies made mistakes that led to the explosion, and that BP managers only had direct involvement in one of the eight judgement errors and equipment failures that led to the explosion. The blame for the other mistakes rests primarily with Transocean, Halliburton and Weatherford International.
 
Yesterday’s API data:
•    US API Crude Oil Inventories W/W (Sep 3) -7308K vs. Prev. 4765K
•    US API Cushing Crude Inventory W/W (Sep 3) -40K vs. Prev. -503K
•    US API Distillate Inventory W/W (Sep 3) 1288K vs. Prev. -1860K
•    US API Gasoline Inventories W/W (Sep 3) 654K vs. Prev. -589K (RTRS)
 
Looking ahead to today’s DOE figures:
•    US DOE Crude Oil Inventories (Sep 3) M/M Exp. 1000K vs. Prev. 3425K (High 4800K, Low -2000K)
•    US DOE Gasoline Inventories (Sep 3) M/M Exp. -1000K vs. Prev. -212K (High 1250K, Low -2500K)
•    US DOE Distillate Inventory (Sep 3) M/M Exp. 700K vs. Prev. -739K (High 1500K, Low -200K)
•    US DOE US Refinery Utilization (Sep 3) M/M Exp. -0.50% vs. Prev. -0.70% (High 1.00%, Low -2.20%)
 
Weather news:
The Weather Insight forecast sees temperatures for the next 6-10 days in the US to be 2.3F below the 10-year average for this time of year and 1.5F lower the 30-year average.
• Northeast: forecasts that temperatures have risen 0.4F over the last 12 hrs
• Texas: forecasts that temperatures have fallen 0.2F over the last 12 hrs
• Southeast: forecasts that temperatures have fallen 0.2F over the last 12 hrs
• West: forecasts that temperatures have fallen 0.3F over the last 12 hrs
The NHC reports that Tropical Storm Igor is presently stationary 70 miles south of southernmost Cape Verde islands, with winds remaining at 40mph.

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