Inside Oil - Thursday December 22 2011

THURSDAY, DECEMBER 22, 2011  To download the full report (PDF document) please click here       SPECIAL PDF REPORT - THREAT OF IRAN SANCTIONS WORRIES OIL MARKET Iran aims to sell its biggest Asian customers oil at higher prices and on tougher terms, even as it faces the prospect of fewer sales as Western nations mull sanctioning the economic lifeline of the world's fifth largest crude exporter.  For Reuters reports on the meet, click here     COLUMN:   Race for 2012 crown set with final oil forecasts: Kemp --John Kemp is a Reuters market analyst. The views expressed are his own--  LONDON, Dec 21 (Reuters) - Leading oil analysts have issued a clutch of mostly small downgrades for 2012 Brent prices in the latest Reuters survey, but for the most part banks and traders stuck with earlier predictions.  Predictions in the December survey are particularly important because they are the last out-of-sample forecasts before the forecast period begins, so they provide the best test of accuracy.  Euro-gloom saps geopolitics' power over oil-Campbell -- Robert Campbell is a Reuters market analyst. The views expressed are his own. --   NEW YORK , Dec 21 (Reuters) - Much to the consternation of the most ardent oil bulls, nothing seems capable of lifting crude out of its euro-zone-crisis-induced funk.  It used to be the case that the merest hint of political strife that could have even a modest indirect impact on oil flows was enough to get the market going.     MARKET NEWS:   Oil rises as US stockpiles slump to near 3-year low NEW YORK, Dec 21 (Reuters) - Oil prices rose for a third straight day on Wednesday as U.S. crude inventories dropped to their lowest in nearly three years, overshadowing worries about the euro zone debt crisis.   "Overall, the (oil stocks) data is mildly bullish and I expect we will continue the trend for the next week," said Mark Waggoner, president at Excel Futures.   NYMEX-Natural gas ends up for 2nd day, shorts cover NEW YORK, Dec 21 (Reuters) - U.S. natural gas futures reversed course and ended higher on Wednesday for a second day, backed by technical buying after an early sell-off stalled, but record high supplies and fairly mild weather forecasts continued to limit the upside. "The market has been trending lower for days. We were bound to get some retracement, maybe in sympathy with crude," said Tom Saal, senior vice president at INTL Hencorp in Miami,       COMMODITIES-Oil extends gains in thinly traded markets NEW YORK, Dec 21 (Reuters) - Oil prices closed at a one-week high on Wednesday, leading gains in thinly traded commodity markets, as tumbling U.S. crude stockpiles indicated more demand for energy and an offer of cheap loans for struggling European banks aided sentiment.  "Volumes are predictably low because of the pre-holiday rounds that we're in. High trading deposits in some markets like gold and silver are also putting a squeeze on trades," said George Gero, vice president at RBC Capital Markets Global Futures in New York.  GLOBAL MARKETS-Shares, euro ease as bank funding doubts persist TOKYO, Dec 22 (Reuters) - Asian shares and the euro eased on Thursday as doubts remained over how much of the funds banks raised from an inaugural long-term European Central Bank tender will actually flow into struggling euro zone economies and help restore confidence.  "With bank balance sheets under stress and the system still required to raise capital ratios under Basel III, the temptation will surely be for banks to sit on this additional liquidity, rather than recycle it back through the economy," wrote BNP Paribas in a daily note.         US WCoast Products-Gasoline gains on upset HOUSTON, Dec 21 (Reuters) - West Coast gasoline gained for a second day in a row due to a unit shutdown at a San Francisco Bay-area refinery, traders said.  Los Angeles market unleaded ethanol-blend CARBOB gasoline moved into the January period and sold 3.75 cents higher at 16.75 cents a gallon over February RBOB futures on the New York Mercantile Exchange.  Eagle Ford shale Sep. output at record high-Bentek NEW YORK, Dec 21 (Reuters) - Oil and condensate output from the prolific Eagle Ford shale prospect rose to yet another record high in September, data from consultancy Bentek Energy showed on Wednesday.  Total crude oil and condensate output in the unconventional prospect rose by 120,000 bpd to just under 375,000 bpd during the month, Bentek data showed.  Exxon plans to merge fuels, lubricants divisions Dec 21 (Reuters) - Exxon Mobil Corp  plans to merge two of its products divisions, a sign of the times for big oil companies, which generally are sharpening their corporate focus on the growing challenges of exploration and production.  The largest U.S. oil company said on Wednesday it expects its Lubricants & Petroleum Specialties Co to merge with its Fuels Marketing Co, effective Feb. 1, 2012, subject to board approval.  Colonial board OKs expansion of main gasoline line Dec 21 (Reuters) - Colonial Pipeline Co  plans a 10 percent increase in the capacity of its main gasoline line from Houston to North Carolina, the compan said in a news release Wednesday.  An estimated 100,000 barrels per day (bpd) of capacity will be added to Colonial's Line 01, which runs from Houston to Greensboro, North Carolina, during the first quarter of 2013.  Cuba oil, gas production little changed in 2011 HAVANA, Dec 21 (Reuters) - Energy dependent Cuba produced oil and gas equivalent to almost four million tonnes of crude in 2011, or about the same amount as the last few years, state-run media said on Wednesday.  It did not say how much was oil and how much was gas, but the government reported production in 2010 of 3.1 million tonnes of oil and 1.1 million cubic meters of natural gas.  Alon reports compressor offline at Big Spring refinery Dec 21 (Reuters) - Alon USA Energy  reported an off-Gas compressor was off-line for maintenance at its 67,000 barrel-per-day refinery in Big Spring, Texas, according to a notice filed with state pollution regulators.  The filing with the Texas Commission on Environmental Quality listed a diesel hydrotreater and a gasoil hydrotreater as sources of emissions.  Oil firms plan earlier North Sea programmes in 2012 LONDON, Dec 21 (Reuters) - BP Plc  and ConocoPhillips  plan to bring forward the release of monthly North Sea crude supply forecasts from next month, as part of changes aimed at strengthening the global Brent price benchmark.  BP, operator of the Forties crude stream, and other firms plan to issue monthly export programmes for Forties and three other North Sea crudes a few days earlier than normal starting in January, the firms and industry sources said on Wednesday.  Workers return to Kazakh oilfield under armed guard ALMATY, Dec 21 (Reuters) - KazMunaiGas Exploration Production  said on Wednesday it expects to meet its reduced oil production target for the year after police deployed armed security around the oilfield closest to the scene of Kazakhstan's deadliest riots in decades.  The London-listed oil producer said its Uzenmunaigas operations in western Kazakhstan were unscathed by the violence in the nearby town of Zhanaozen, where a months-long protest by sacked oil workers erupted into riots on Dec. 16.     BEYOND THE HEADLINES:   China shows no qualms over price of Iran oil showdown BEIJING/SINGAPORE, Dec 20 (Reuters) - China has made an audacious move to force Iran to sell it cheaper crude, disrupting the flow of over 10 percent of the Islamic Republic's exports by cutting January imports in half.  In contrast to other top Asian buyers worried about what sanctions mean for crude flows from the world's fifth-largest exporter, China has shown no public qualms about the risk that a disruption will drive up the cost of oil.        EVENTS TO WATCH TODAY (GMT)   U.S. EIA natural gas stocks Weekly (1530) U.S. Cold Pork Belly Stocks Oct (2000) U.S. Cold Storage-Beef Stocks Oct (2000) U.S. Cold Storage- FCOJ Stock Oct (2000)   MORE INFORMATION   Learn more about our products and services for Commodities Professionals click here Contact Thomson Reuters click here To subscribe to this and other Commodities News Briefs click here  Join our market Forums. 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