Energy and Natural Resources Market Diary (August 2, 2010)

Energy and Natural Resources Market Diary (August 2, 2010)

Strengths

• Indonesia, the largest coal exporter in the world, exported 24.49 million tonnes of coal in June, rising 32.23 percent from 18.52 million tonnes in May.
• In June, Japan’s crude oil imports were up 0.5 percent year-over-year to 3.16 million barrels per day, liquefied natural gas imports were up 9 percent year-over-year and coal imports up 14 percent year-over-year, according to data published by the Finance Ministry.
• According to the National Development and Reform Commission, China domestic coal production reached 1.57 billion tons in the first half up by 20.1 percent year-over-year.
• Mitsui O.S.K. Lines Ltd., the operator of the world’s largest merchant fleet, raised its full-year profit forecast as demand for transporting goods between Asia and the U.S. and Europe rebounded.

Weaknesses

• Iraq's oil ministry has said the country's oil exports had dropped to 1.8 million barrels per day in June from 1.9 million barrels per day the month before, due to bad weather and bomb attacks.
• Japan's refined copper exports fell 22 percent year-over-year in June while refined zinc exports fell 37 percent from a year earlier, Ministry of Finance data showed.

Opportunities

• The Hellenic Shipping News reported that Russia plans to give licenses for development of 41 iron-ore and 31 coking coal deposits during 2011-2015. The iron-ore deposits are estimated to have a reserve base of 16.6 billion tonnes, while the coking coal reserves are estimated to be about 80.5 billion tones.
• Arabian Oil Co., the world's biggest oil company, said Wednesday it signed contracts with several local and international contractors to help it build its estimated $10 billion export refinery at Yanbu on the Red Sea. Announced first in 2005, the refinery was originally set to cost $6 billion to build. However, the project's price tag doubled to as much as $12 billion in 2008 when raw material and commodity prices peaked. Construction of the facility is now estimated to cost about $10 billion.
• State-run explorer Oil India has set aside $2 billion for overseas acquisitions, chairman NM Borah told reporters this week. Bigger rival Oil & Natural Gas Corporation has spearheaded India's hunt for foreign petroleum assets, often competing with Chinese companies, but smaller players such as Oil India and refiners like Indian Oil Corporation are also scouting for assets, Reuters reported..

Threats

• Oil reserves in Nigeria have dropped by 4.79 percent to 31.81 billion barrels over the past year because companies refuse to undertake exploration, a senior industry official said this week.
• China’s natural gas supplies may face pressure in some regions this winter because of insufficient storage capacity and slowness by some companies to import supplies, said the National Development and Reform Commission.