Inside Oil - Thursday December 29 2011

THURSDAY, DECEMBER 29, 2011  To download the full report (PDF document) please click here           MARKET NEWS:   Oil falls on dollar's rise, Wall St pullback NEW YORK, Dec 28 (Reuters) - Oil prices fell on Wednesday, snapping a string of six straight sessions of gains as part of a broad sell-off across commodities and equities.   "The complex wasted little time in offsetting yesterday's strong gains as the Tuesday injection of geopolitical risk premium was negated by today's broad based de-risking," Jim Ritterbusch, president at Ritterbusch & Associates, said in a note.   NYMEX-Natural gas ends lower, Jan slips at expiration NEW YORK, Dec 28 (Reuters) - U.S. natural gas futures ended lower on Wednesday, as concerns about record-high supplies outweighed the outlook for stronger demand due to colder Northeast and Midwest weather forecasts for next week.  "The colder forecast is a little supportive, but I think we just saw a little booksquaring today ahead of expiration and the end of the year," a Pennsylvania-based trader said, noting volume ahead of the New Year's holiday was very light.   Euro Coal-Market tracks oil during low activity LONDON, Dec 28 (Reuters) - Physical prompt coal markets saw little activity in the first full day of trading after Christmas on Wednesday, and in the absence of spot trades to give price direction, coal was largely tracking the oil, as it has for the past few months.  There was little coal trading activity on Wednesday as many traders were bridging the Christmas and New Year holidays.   COMMODITIES-Oil snaps 6-day run-up; gold at 3-month low NEW YORK, Dec 28 (Reuters) - Oil closed lower on Wednesday, snapping a six-day run-up,and gold prices fell too, hitting three-month lows, as a rally in the dollar pressured commodities denominated in the U.S. currency.  "The worry is that (European) banks are borrowing and then sitting on the money and not lending it, and that will limit growth just like it did in the United States," said Mark Waggoner, president at Excel Futures Inc, an oil and commodities broker in Bend, Oregon.    GLOBAL MARKETS-Euro weakens broadly; S&P 500 erases 2011 gains NEW YORK, Dec 28 (Reuters) - The euro weakened about 1 percent against the dollar and the yen on Wednesday, one day before an important auction of long-dated Italian debt, while U.S. stocks slid more than 1 percent on concerns about the economy in early 2012.  "If European banks are still this concerned, it's not a good sign," said Karl Schamotta, senior markets strategist with Western Union Business Solutions. "That underlines the possibility that this liquidity crunch is getting worse and will continue into the new year.      Oil sands OK starts option clock for Athabasca CALGARY, Alberta, Dec 28 (Reuters) - Athabasca Oil Sands Corp  has won regulatory approval for its MacKay River oil sands project, opening a one-month window that could result in its state-owned Chinese partner taking full control of the development.  As part of a previous funding deal, Athabasca and its joint-venture partner, PetroChina , have options to trade the Canadian company's 40 percent interest in the 150,000 barrel a day project in northern Alberta at a strike price of C$680 million ($665 million).  US crude stocks seen down on imports, seasonal draws Dec 28 (Reuters) - U.S. crude oil inventories are expected to have fallen for the seventh consecutive period last week as refiners delayed imports to keep inventories low for year-end tax considerations, an expanded Reuters poll of analysts showed on Wednesday.  Averaging the views of nine analysts, crude stockpiles were expected to be down 1.7 million barrels, the preliminary survey showed.   US gasoline demand up over Christmas holiday Dec 28 (Reuters) - U.S. retail gasoline demand rose sharply last week from the previous week as Americans hit the road for the Christmas holiday, but demand was down from the same week in 2010, MasterCard said in its weekly SpendingPulse report on Wednesday.    Last week's gasoline demand rose 7.7 percent compared with the previous week, MasterCard said, but demand was 1.6 percent lower than it was a year ago.  US Gulf refiners could benefit from Europe's woes NEW YORK, Dec 28 (Reuters) - U.S. Gulf Coast refiners may emerge winners in the refinery stakes as European Petroplus is latest victim of the Atlantic Basin shake up but it is still too early to say exactly how big the benefit will be, analysts and traders said on Wednesday. Refiners both in Europe and along the East Coast of the United States face declining demand for their products, along with high costs for light, sweet crude feedstocks. This situation has been wreaking havoc on profits and forcing refinery closures of older, less-complex plants on both sides of the Atlantic. Keystone pipeline support down but most in favor-poll Dec 28 (Reuters) - A majority of voters still support the controversial Canada-to-Texas oil sands pipeline as the Obama administration again weighs whether to approve or scrap the project, according to a poll released on Wednesday.  Rasmussen Reports, a public opinion research company, found that 53 percent of likely U.S. voters at least somewhat favored moving ahead with TransCanada's Keystone XL pipeline, down from 60 percent approval in mid-November, according to the survey.    Petroecuador sees oil output up 10 pct in 2012 QUITO, Dec 28 (Reuters) - Ecuador's state oil company Petroecuador expects oil production next year will rise 10 percent from 2011 to 60 million barrels, General Manager Marco Calvopina said on Wednesday.  Calvopina told reporters Petroecuador was set to produce 55.3 million barrels this year.  Gas exports from Norway's Ormen Lange resume-Shell OSLO, Dec 28 (Reuters) - Gas exports from Shell's  Ormen Lange field, which can provide 20 percent of Britain's gas demand, resumed after a Christmas Day shutdown at the field's processing plant, with operations expected to ramp up later on Wednesday.  The Norway-based plant shut down at 1940 GMT on Christmas Day after a powerful Atlantic storm, nicknamed Dagmar, knocked out power. Petroplus plants should be nationalised-French union PARIS, Dec 28 (Reuters) - French union representatives at Petroplus  on Wednesday called for European governments to seize control of the Swiss group's five refineries after lenders froze $1 billion in credit facility the company relied on to buy crude oil.  The move on Tuesday to stop Petroplus from drawing on its borrowing allowances sent its shares tumbling amid concern Europe's largest independent refiner would soon be unable to afford oil purchases for its five refineries.     BEYOND THE HEADLINES:   West ought to withdraw Iran oil ban plan-official DUBAI, Dec 28 (Reuters) - Iran's OPEC governor told Reuters on Wednesday the West ought to withdraw plans to impose sanctions on Iran's oil, a move that would hurt the market and prompt Tehran to retaliate by blocking Gulf OPEC crude exports going through the Strait of Hormuz.  Iran warned on Tuesday it would stop the flow of oil through the Strait of Hormuz if sanctions from the West were imposed on its crude exports.  Gazprom plant risks loss of Kazakh gas-sources MOSCOW, Dec 28 (Reuters) - Russian gas giant Gazprom  may be forced to halt its Orenburg gas-processing plant due to a sharp reduction in supply of a key feedstock from the giant Karachaganak field across the border in Kazakhstan, industry sources said on Wednesday.  The operators of the Karachaganak field, in which the Kazakh government recently agreed to acquire a stake, have cut supplies of unstable gas condensate to the Orenburg plant by more than 90 percent in the last few months of the year, the sources said.       EVENTS TO WATCH TODAY (GMT)   U.S. EIA NATURAL GAS STOCKS WEEKLY (1530)   U.S. EIA PETROLEUM STOCKS WEEKLY(1600)      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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