IEA Hikes 2013 Global Oil Demand, Non-OPEC Supply Forecasts

The International Energy Agency hiked its forecasts for global oil demand for this year and the next and lifted its projections for non-OPEC supply in 2013, the agency said in its Monthly Oil Market Report on Wednesday.

Despite the upward forecast revision for 2013, the IEA still said it expects "relatively sluggish demand growth" over the year, "as global economic expansion remains tepid."

IEA hiked its forecasts for 4Q global demand by 435 kb/d over last month to around 90.5 mb/d, more than reversing the previous forecast's 300 kb/d cut. Forecasts for overall demand this year and the next were increased by 100 kb/d to 89.7 mb/d and 90.5 mb/d, respectively.

The IEA said the relatively stable demand forecasts for 2012 overall have also been masked by mutually offsetting revisions in certain regions and quarters.

Global oil production increased by 730 kb/d to 91.6 mb/d in November. With non-OPEC production rebounding "strongly" in November to 54.0 mb/d, the IEA revised up its forecasts for non-OPEC 4Q supply by 30 kb/d to 53.8 mb/d. For next year, the agency expects non-OPEC production to rise by 890 kb/d - the fastest pace since 2010 - to 54.2 mb/d.

Overshadowed by the jump in non-OPEC output, OPEC supply rose by "a marginal" 75 kb/d to 31.22 last month, the agency noted. OPEC crude supply increases were led by Saudi Arabia, Angola, Algeria and Libya. This was partly offset by a one-off downturn in Nigeria due to weather and ongoing cutbacks in Iran due to sanctions and shipping constraints.

With OPEC ministers meeting in Vienna later Wednesday, the IEA said the group was "widely expected" to keep its output ceiling at the current target of 30 mb/d given the stable prices, despite production over the year averaging 1.5 mb/d above the target.

The IEA hiked its "call" on OPEC crude and/or stocks by 400 kb/d for 4Q, but left its "call" for 2013 unchanged at 29.9 mb/d. OPEC's 'effective' spare capacity last month was lowered to 2.49 mb/d from 2.51 mb/d in October, the agency added.

OECD commercial stocks fell by 16.2 million barrels in October to 2.722 billion barrels, following seven consecutive months of increases, the agency reported, adding that preliminary data suggested a further draw in November.

Crude oil price volatility has moderated since the start of the year and prices have been easing "gently" in recent months, but the IEA said this masked some regional volatility and uncertainty. Plunging European demand in 3Q was offset by robust Asian demand, causing "an apparent acceleration in the eastward shift of global oil demand growth."

"There is a clear contrast not only in oil demand trends, but also in economic growth between Europe and Asia. North America falls somewhere in the middle. Everywhere, uncertainty prevails," the IEA wrote. "Whether the recent plunge in European oil demand is part of a trend or just a one-off is unclear. Early data show demand bouncing back in October, but may be revised."

WTI crude futures fell by $2.84/bbl in November to $86.73/bbl while Brent was down just under $2/bbl to $109.53/bbl according to IEA. The benchmark crudes inched down further in early December, with WTI last trading at $85.90/bbl and Brent at $107.85/bbl.

Still, IEA noted that Brent futures prices are on track to surpass 2011 record levels this year, buoyed by "heightened political risks" in key suppliers.

 

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Mayawati backs UPA on FDI

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With BSP supremo Mayawati lending her support to the government in Rajya Sabha on the contentious issue of FDI in retail , the 50-share NSE benchmark Niftytouched a 20-month high of 5,937.40.At 15.06 pm, the Sensex was up 78.5 points at 19470, and the Nifty up 23 points at 5923.4. The Sensex witnessed a 300-point reversal intra-day. Broader markets too are witnessing marked upmove with huge volumes being traded.

After a thumping victory in the Lok Sabha, FDI in multi-brand retail battle has shifted to Rajya Sabha. Mayawati's move today has clearly strengthened UPAs hands, and it appears the voting on Friday will go in favour of the ruling party. Political experts say the government has very tactfully played Samajwadi against the BSP, which helped in it getting closer to the number needed to win the Rajya Sabha vote.

Top Nifty gainers include Jaiprakash Associates, DLF, Axis Bank, Reliance Infra and Tata Motors. Among the sectoral indices, the BSE Realty Index gained, the BSE Auto Index and the BSE Metal Index pared all its losses. The IT index, however, remained in the red.

Eurozone Recession Confirmed

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The euro area economy slid into recession in the third quarter, an updated report from Eurostat confirmed Thursday.

The gross domestic product fell 0.1 percent from a quarter ago, when it dropped 0.2 percent. The figures matched the preliminary estimate released on November 15.

Household final consumption expenditure remained unchanged in the third quarter, following 0.4 percent fall in the second quarter. This was expected to show a 0.2 percent decline.

Government spending dropped 0.2 percent quarter-on-quarter against expectations for no change. Investment declined 0.7 percent following 1.8 percent fall in the second quarter. This was roughly in line with forecast for a 0.8 percent drop.

During the three months to September, exports rose 0.9 percent and imports expanded 0.2 percent compared to the previous three-month period.

Annually, GDP fell 0.6 percent in the third quarter. This comes after a 0.5 percent fall in the second quarter. The figures matched the flash estimate.

Greek Jobless Rate Hits New Record High In September

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Greece's unemployment rate increased further and reached a new record high in September as the deepening financial crisis in the debt-stricken economy continued to weaken the labor market, latest data showed Thursday.

The seasonally adjusted unemployment rate increased to 26 percent in September from 25.3 percent in August, which was revised down from 25.4 percent, the Hellenic Statistical Authority said. The latest figure was also significantly higher than 18.9 percent recorded in September 2011.

The unemployment rate among youth, aged between 15 and 24, was 56.4 percent in September, markedly higher than last year's figure of 47.6 percent.

There were around 1.3 million unemployed persons in the country at the end of September, sharply higher by 38 percent compared to last year. Month-on-month, the number of unemployed rose 2.8 percent.

The number of employed persons was around 3.7 million during the month, down 8.1 percent compared to last year. Month-on-month, employment dropped by 0.6 percent.

Overnight US Market

Dow Industrials	12965.60	-59.98	-0.46%	NYSE Comp.	8223.46	-36.98	-0.45%
S&P 500	1409.46	-6.72	-0.47%	Nasdaq 100	2671.84	-6.04	-0.23%
Nasdaq Comp.	3002.20	-8.04	-0.27%	Dow Transports	5061.42	-57.69	-1.13%
Russell 2000	820.80	-1.12	-0.14%	Dow Utilities	451.04	-3.08	-0.68%

Internals were negative on lighter volume. Advances/declines were 2 to 3 on the NYSE and 4 to 5 on the Nasdaq, with up/down volume about 1 to 2 on both exchanges. New highs/lows were 149/11 on the NYSE and 62/34 on the Nasdaq.

Leaders — Disk Drives (+0.99%), REITs (+0.37%), Drugs (+0.27%), Defense (0.00%), HMOs (0.00%), Comp. Tech (-0.03%), Natural Gas (-0.03%), Telecoms (-0.06%)
Laggards — Gold/Silver (-1.97%), Chemicals (-1.85%), Metals (-1.30%), Transport (-0.98%), Airlines (-0.92%), Banks (-0.82%), Paper (-0.81%), Utilities (-0.73%)

Treasury Yields — 6 Month: 0.12%,  2 Year: 0.25%,  5 Year: 0.63%,  10 Year: 1.62%,  30 Year: 2.80%

Energy Prices — Crude oil: $88.98/barrel,  Gasoline: $2.73/gallon,  Natural Gas: $3.60/mmBTU

US Dollar Index — 79.917

Precious Metals — Gold: $1715.80/ounce,  Silver: $33.64/ounce,  Platinum: $1606.00/ounce

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Aid to Spain banks to be disbursed next week

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The 39.5 billion euros ($51 billion) Spain’s euro-zone partners agreed to provide for recapitalizing four nationalized Spanish banks will be disbursed next week, Eurogroup President Jean-Claude Juncker said here Monday.

“The implementation of the program is well on track, meeting all required conditionality steps as enshrined in the memorandum of understanding,” the Luxembourg prime minister said after a meeting of euro-zone officials in Brussels.

“We have also welcomed the decision by the ESM (European Stability Mechanism) board of directors to authorize the first tranche of the program of up to 39.5 billion (euros). The disbursements will be made in mid next week,” Juncker said.

The four nationalized Spanish banks will receive 36.97 billion euros in European aid.

Nearly half of that total – 17.96 billion euros – will go to Bankia, while 5.43 billion euros will be disbursed to Novagalicia, 9.08 billion euros to CatalunyaCaixa and 4.5 billion euros to Banco de Valencia.

Another 2.5 billion euros will fund the participation of Spain’s state-backed FROB bank restructuring fund in the Sareb “bad bank,” recently set up to take on Spanish banks’ toxic real-estate assets.

“Today has been an important day for Spain and for the ESM,” Spanish Economy Minister Luis de Guindos said in Brussels.

The Spanish economy remains hampered by the fallout from the collapse of a long-building housing bubble, which left many of its banks saddled with toxic assets.

The Iberian nation’s unemployment rate currently stands at 25.02 percent overall and more than 50 percent among young people. EFE

Japan stocks fall, with car makers mostly lower

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LOS ANGELES (MarketWatch) -- Japanese stocks fell in early Tuesday action, taking a cue from losses on Wall Street over weak U.S. manufacturing data and worries over the fiscal cliff. The Nikkei Stock Average JP:100000018 -0.28% lost 0.5% to trade at 9,406.87, while the Topix surrendered 0.4%. Auto-maker stocks were broadly lower after most reported drops in domestic sales but gains in U.S. sales. Toyota Motor Corp.JP:7203 0.00% TM -0.49% slipped 0.3%, and Nissan Motor Co. JP:7201 -1.49% NSANY +0.26%dropped 1.6%. Mitsubishi Motors Corp. JP:7211 -1.28% MMTOF -1.04% , which saw its November North American sales slip slightly, traded 2.6% lower, but shares of Honda Motor Co. JP:7267 +0.85% HMC -1.92% rose 0.7% after posting its best U.S. sales ever. Tech exporters were mostly lower, with Hitachi Ltd. JP:6501 -1.47% HTHIF 0.00% lower by 1.5%, and camera-maker Nikon Corp. JP:7731 -2.02% NINOF -2.49% falling 1.5%, while Advantest Corp. JP:6857 -3.64% ADTTF +4.34% tumbled 3.4% after Credit Suisse cut its rating to underperform from outperform. Sharp Corp. JP:6753 +1.16% SHCAF -0.50% rose 1.7%, however, after a Nikkei news report that it plans to join Qualcomm Inc. QCOM -0.39%to develop an energy-efficient LCD smartphone panel.

Copper eases off 5-week high on U.S. fiscal cliff concerns, Greece

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Forexpros - Copper futures turned lower during European morning hours on Monday, easing off a five-week high as traders continued to monitor developments surrounding Greece’s debt woes and the fiscal outlook in the U.S.
Copper prices were higher during the Asian trading session following the release of upbeat Chinese manufacturing data.
On the Comex division of the New York Mercantile Exchange, copper futures for March delivery traded at USD3.645 a pound during European morning trade, down 0.15% on the day.
New York-traded copper prices rose by as much as 0.45% earlier in the day to hit a session high of USD3.667 a pound, the strongest level since October 19.
Markets participants continued to monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the four weeks left before the deadline.
House of Representatives Speaker John Boehner spooked investors on Friday after saying there was a stalemate between Republicans and President Barack Obama’s administration.
He added that President Obama’s proposal of USD1.6 trillion in new tax revenue and less than USD400 billion in spending cuts was not “serious.”
There are fears that U.S. lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the U.S.’s AAA rating in August 2011 and tip the country back into a recession.
Meanwhile, in the euro zone, Greece launched a scheme to buy back its debt from private investors, as part of an agreement to unlock a new bailout package worth EUR44 billion.
Euro zone finance ministers were to hold talks in Brussels later in the day to discuss the terms of the new aid deal for Greece, after Germany’s parliament gave it the green light on Friday.
Copper prices rallied to a five-week high earlier in the session after a report from HSBC confirmed that manufacturing activity in China expanded for the first time in more than a year last month.
The final version of China’s HSBC Purchasing Managers Index rose to 50.5 in November from a final reading of 49.5 in October.
The data came after a report from the state-affiliated China Federation of Logistics and Purchasing over the weekend, which showed manufacturing activity improved to a seven-month high of 50.6 in November, up 0.4 point over October.
The upbeat data added to signs of growth recovery in the world’s largest copper consumer.
Elsewhere on the Comex, gold for February delivery added 0.45% to trade at USD1,720.25 a troy ounce, while silver for March delivery rose 1% to trade at USD33.61 a troy ounce.

Crude falls from highs on weak U.S. data

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Forexpros - Crude oil futures eased higher during U.S. afternoon hours Monday after data indicated manufacturing activity in the U.S. contracted for the first time in three months in November.
Sentiment remained supported after Greece announced the details of a debt buyback scheme, while encouraging Chinese data was also in focus.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD88.98 a barrel during U.S. afternoon trade, up 0.04% on the session.
Pushing oil off its highs,  the Institute for Supply Management said in a report that its index of U.S. purchasing managers fell to 49.5 in November from a reading of 51.7 in October. 
Analysts had expected the ISM index of purchasing managers to decline to 51.3 in November.
Meanwhile, a report from HSBC released earlier confirmed that manufacturing activity in China expanded for the first time in more than a year last month.
The final version of China’s HSBC Purchasing Managers Index rose to 50.5 in November from a final reading of 49.5 in October.
The data came after a report from the state-affiliated China Federation of Logistics and Purchasing over the weekend, which showed manufacturing activity improved to a seven-month high of 50.6 in November, up 0.4 point over October.
The U.S. and China are the world’s two largest oil consuming nations and manufacturing numbers are used as indicators for fuel demand growth.
Appetite for riskier assets found additional support after Greece launched a scheme to buy back its debt from private investors, as part of an agreement to unlock a new bailout package worth EUR44 billion.
Euro zone finance ministers were to hold talks in Brussels later in the day to discuss the terms of the new Greek aid deal, after Germany’s parliament gave it the green light on Friday. The ministers were also to discuss details of a EUR10 billion bailout for Cyprus.
Weakness in the dollar also contributed to oil’s strength. The euro hit a six-week high against the greenback, while the dollar index was down 0.35% to trade at 79.95, the weakest level since November 1.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
But gains were limited as investors remained concerned over the looming fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the four weeks left before the deadline.
House of Representatives Speaker John Boehner spooked investors on Friday after saying there was a stalemate between Republicans and President Barack Obama’s administration. 
He added that President Obama’s proposal of USD1.6 trillion in new tax revenue and less than USD400 billion in spending cuts was not “serious.”
There are fears that U.S. lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the U.S.’s AAA rating in August 2011 and tip the country back into a recession.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery added 0.4% to trade at USD111.62 a barrel, with the spread between the Brent and crude contracts standing at USD21.89 a barrel.

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Wall Street turns bearish into close on weak PMI numbers

Forexpros - U.S. stocks closed lower Monday, as weak PMI numbers pressured shares, while better-than-expected data from China and positive comments from Treasury Secretary Timothy Geithner on the "fiscal cliff" supported sentiment. 
At the close of  U.S. trade, the Dow Jones Industrial Average fell 0.46%%, the S&P 500 index dropped 0.47%, while the Nasdaq Composite index gave back 0.27%. 
Pressuring stocks lower, manufacturing activity in the U.S. deteriorated unexpectedly in November, contracting for the first time in three months, industry data showed on Monday. 
In a report, the Institute for Supply Management said its index of purchasing managers fell to 49.5 in November from a reading of 51.7 in October. 
Analysts had expected the ISM index of purchasing managers to decline to 51.3 in November.
On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Sentiment strengthened after final data showed that China’s HSBC purchasing managers’ index came in at 50.5 in November from 49.5 in October, indicating that economic activity is picking up. 
On Sunday, Timothy Geithner said that the Republicans would ultimately agree to raise tax rates on the rich to avert a fiscal crisis. 
Markets have been jittery amid negotiations between Democrats and Republicans to avoid a set of spending cuts and tax increases due to come into effect on January 1 if U.S. lawmakers cannot reach an agreement on reducing the budget deficit. 
News Corp surged 1.06% amid reports it is preparing to name Robert Thomson, a close confidant of Chairman and CEO Rupert Murdoch, to lead its new publishing company by the end of next week. 
Financial stocks were also broadly higher, as shares in JP Morgan added 0.24% and Citigroup rose 0.20%, while Bank of America and Goldman Sachs climbed 0.71% and 1.23% respectively. 
Separately, Bank of America was said to be holding off on plans for new checking-account fees that could have affected some 10 million customers by year's end, avoiding a possible repeat of last year's protests over consumer banking fees. 
Airline companies were also in focus, after Singapore Airlines said it was in talks with interested parties, including Delta Airlines, to sell its 49% stake in British carrier Virgin Atlantic. The news sent shares in Delta Airlines down 0.50% 
Boeing added to losses, falling 0.31%, after the company and the union that represents its 23,000 engineers tentatively agreed to resume labor talks on Tuesday, after their negotiations on a new contract ended abruptly on Thursday. 
Elsewhere, Martin Marietta Materials dipped 0.03%, as it was expected to make a friendly offer to buy rival Vulcan Materials, rather than attempt another hostile takeover, according to the Wall Street Journal. 
At the close of European trade, the EURO STOXX 50 added 0.28%, France’s CAC 40  eased higher by 0.26%, while Germany’s DAX 30 climbed 0.40%. 
Investors are awaiting the Canadian interest rate decision and the Australian GDP on Tuesday.

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