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Saturday, 14 August 2010

Think OPEC Exports Won't Decline? You're Living In A Dreamworld

At the EIA’s International Energy Outlook (IEO) presentation this May the issue of future oil exports from OPEC nations came up, and in an interesting way. Readers may be familiar with the phenomenon of declining net exports, from major oil producing nations, as a result of internal demand from growing, domestic populations. The phenomenon was modelled last decade by Jeffrey Brown and Samuel Foucher. Their Export-Land Model showed that the rate of decline from oil exporters can become quite accelerated. While that may seem obvious, it was a point worth making last decade when it was widely presumed that gross production from large oil producing nations was largely available for export. The tipping, of both the UK and Indonesia, from net oil exporters to net oil importers should have put an end to such a presumption. More importantly, the rise of domestic oil consumption in Saudi Arabia was also a warning. Saudi oil exports have declined now for five years.

Given that Saudi Arabia’s exports have already been in decline for some time, it was surprising to hear EIA Deputy Administrator Howard Gruenspecht not only fail to acknowledge that fact, but forecast a rather sanguine outlook on future OPEC export supply in the IEO May press conference. It is particularly noteworthy that he gave such an empty and meaningless answer to the questioner, James Schlesinger former Energy Secretary under Carter, who made a point of probing in this exact area. | see: dialogue starting after the 37:00 minute mark of Video: International Energy Outlook 2010.

GCC Market Analytics: Weekly GCC Trend Analysis

will post the following trend analysis of the GCC markets on a weekly basis. Hopefully everything is self explanatory but if not please refer to the Notes section at the end of this post.

Enjoy.
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Notes:
1. In the "Current Trend Conditions" section the short-term, medium-term and long-term trend values are determined by dual moving averages. The trend value is "Up" when the the shorter length moving average is greater the longer length moving average. The trend value is "Down" when the the shorter length moving average is less then the longer length moving average. For more information on dual moving averages see previous post here.
2. Dual moving average parameters are specific to each index and time-frame (short, medium and long).
3. The "Outlook" value can be "Very Bullish," "Bullish," "Neutral," "Bearish" or "Very Bearish." The value is determined by the historical performance of the index when the same short, medium and long-term trend conditions were in evidence in the past.
4. The top chart shows a plot of the historical price performance of the index. Highlighted on the chart are the past periods when the current trend conditions were in evidence in the past
5. The bottom chart shows the non-compounded percentage returns of the index when the current trend condition were in evidence in the past.

Saudi Arabian Stocks Drop for Fifth Day on Concern Global Recovery Slowing - Bloomberg

Saudi Arabian shares declined for a fifth day, led by petrochemicals companies and banks after U.S. and European markets retreated this week on concern the global economic recovery is slowing.

Saudi Basic Industries Corp., the world’s largest petrochemicals maker known as Sabic, led the retreat, followed by Samba Financial Group and Riyad Bank. The 143-company Tadawul All Share Index lost 1.8 percent to 6,079.4, the lowest since July 21, at 12:31 p.m. in Riyadh.

“The market is correcting due to the double whammy of a global downward trend on mounting concerns about the state of the global economy, as well as the Ramadan effect,” said John Sfakianakis, chief economist at Banque Saudi Fransi in Riyadh.

Middle East Tanker Returns Triple After Owners Reject Money-Losing Cargoes - Bloomberg

Returns from shipping Middle East crude oil to Asia, the world’s busiest route for supertankers, more than tripled this week as owners rejected unprofitable cargoes.

Rental income from very large crude carriers, or VLCCs, hauling Saudi Arabian crude to Japan advanced 21 percent to $20,133 a day today, according to the London-based Baltic Exchange. Returns were $6,237 a week ago. The weekly jump was the largest since September, according to exchange prices.

Frontline Ltd., the biggest VLCC operator, said Aug. 4 it would anchor ships until a slide in freight rates was reversed. Maersk Tankers, a unit of A.P. Moeller-Maersk A/S, said two days later it would consider the same strategy.

Bahrain-based investors in due diligence for Blackburn Rovers

Ahsan Ali Syed has moved into pole position to take over Blackburn after his Western Gulf Advisory (WGA) investment vehicle was given a four-week period of exclusivity to check the club's accounts.

Citigate Dewe Rogerson, which looks after WGA's public relations, claimed in a statement released to The Sport Briefing that the Bahrain-Swiss investment company would sign a memorandum of understanding with Blackburn on Monday morning before beginning detailed due diligence.

Syed, an Indian businessman, has earmarked �300million to wrap up the acquisition, cover outstanding debts and 'provide the necessary capital to buy new players and invest over the longer term so it can once again become a title contender'."