Inside Oil - Tuesday January 03 2012

TUESDAY, JANUARY 03, 2012  To download the full report (PDF document) please click here      MARKET NEWS:   Brent oil up $1 on rising Iran tensions SINGAPORE, Jan 3 (Reuters) - Brent crude rose a $1 on Tuesday on concerns that rising tensions between Iran and the West could lead to a disruption in oil supplies.  Brent climbed $1 to $108.38 a barrel by 0102 GMT.   Natural gas ends below $3, drops 32 pct in 2011 NEW YORK, Dec 30 (Reuters) - U.S. natural gas futures ended below the psychological barrier of $3 per mmBtu on Friday, as record high production drove prices down 32 percent in 2011 in one of the biggest commodity losses of the year.      "It's tremendously significant that we're trading at the lowest December price since 2001 -- it demonstrates that the market is oversuppled, and demand is lackluster at best. We could be looking at $2.50 gas by the back half of February," said Dominick Chirichella, analyst at Energy Management Institute in New York.   First annual decline in 3 years; cotton loses most NEW YORK, Dec 30 (Reuters) - Agricultural markets rallied on Friday to end the year in style, but sharp losses in wheat, soybeans, cotton, cocoa and sugar at certain points this year weighed on commodities as a whole and left the asset class with its first annual loss in three years.  "This time last year, analysts would have expected much higher prices than we have now," Stephen Briggs, metals analyst at BNP Paribas, said.   Euro makes shaky start, oil spikes on Iran tension SINGAPORE, Jan 3 (Reuters) - The euro languished near a decade low against the yen on Tuesday as the trading year began with no relief in sight for the European debt crisis, and U.S. crude jumped 1.5 percent to above $100 a barrel on escalating tensions between Iran and the West.  "(The euro) ended last year on a downtrend, breaking key levels. Through much of last year, people were surprised how well it held up," said Greg Gibbs, a strategist at RBS.      Ohio suspends well operations after series of quakes CLEVELAND , Jan 2 (Reuters) - Ohio has suspended operations at five deep wells used to dispose of fracking-related fluids after nearly a dozen earthquakes in the town of Youngstown over the past year, the latest sign of local unease over the booming shale gas industry.   One day after a 4.0 quake, the Ohio Department of Natural Resources said on Sunday it was halting operations at five Mahoning County wells owned by Northstar Disposal Services LLC as a precaution, citing concerns of a possible link between well activity and the quakes. The wells were used to store wastewater from oil and gas drilling operations, not for production.   Petrobras confirms oil, gas find at offshore well BRASILIA Jan 2 (Reuters) - Brazil's state-controlled energy company Petrobras  on Monday announced discovery of light oil and gas at a well off the country's coast.  The discovery took place at a well known as Tambuata with the identification number 4-GLF-31-ESS, 74 km (46.3 miles) from the coastline and 7 km from the Cidade de Vitoria floating production and storage platform.   Venezuela shrinks nationalization payment to Exxon CARACAS, Jan 2 (Reuters) - Venezuela's PDVSA said on Monday it will pay Exxon Mobil Corp $255 million in compensation for nationalized assets - less than a third of what the U.S. oil giant said it was awarded by an arbitration panel.  The South American OPEC member's state oil company issued a defiant statement saying it was deducting debts owed by Exxon, including PDVSA's repurchase of bonds linked to the nationalized project.   Nigerian anger heats up as petrol prices rocket ABUJA, Jan 2 (Reuters) - Nigerian motorists and unions vented their anger on Monday at a sudden more than doubling of fuel prices, a day after government subsidies were removed in a sweeping economic reform that could trigger mass protests.  Opposition leaders, unionists and local rights groups have condemned the move by the state's fuel regulator, which they say will hike the prices of goods at a time when many Nigerians, the majority of whom live on less than $2 per day, already find basic commodities too expensive.    French refinery unions mull action on Petroplus closure PARIS, Jan 2 (Reuters) - Workers at the French Petit Couronne refinery owned by Petroplus  will meet union representatives from nearby refineries on Wednesday to decide whether to call for strike action after the Swiss refiner announced temporary shutdowns at three plants, a union official said.  The general meeting on Wednesday morning will include the plant's 550 workers as well as trade unionists from other plants, the Petit Couronne trade union official said on Monday. Total's  Gonfreville and Exxon Mobil's  Port Jerome are in the vicinity.   Two of Mexico's three main oil exporting ports shut MEXICO CITY , Jan 2 (Reuters) - Two of Mexico's three main oil exporting ports were shut on Monday morning due to bad weather off the Gulf of Mexico, the transport ministry said.  The Dos Bocas and Coatzacoalcos terminals were closed but the largest port of Cayo Arcas remained open, the ministry said in a statement.    Afren oil explorer says output ahead of target BRUSSELS, Jan 2 (Reuters) - Energy exploration firm Afren  said production at its Ebok field, offshore Nigeria, had reached around 40,000 barrels per day (bpd), taking its end-2011 net output to some 55,400 barrels of oil equivalent per day (boepd), ahead of target.  An output rate above the year-end goal of 50,000 boepd has been sustained since Dec. 19, it said, as a result of operations in Ivory Coast as well as Ebok and Okoro in Nigeria.   Russia 2011 oil output at new post-Soviet record high MOSCOW, Jan 2 (Reuters) - Oil output in Russia edged up 1.2 percent to reach a new post-Soviet high of 10.27 million barrels per day (bpd) last year, as the world's top crude producer eased tax burden and launched pipeline flows to China, the Energy Ministry said on Monday.  That is a bit more than the 10.26 million bpd, expected by an analyst poll compiled a year ago, though the increase in 2011 has slackened from a 2.2 percent rise in 2010 when the country produced 10.145 mln bpd, up from 9.93 million bpd in 2009 and 9.78 million bpd in 2008.      BEYOND THE HEADLINES:   Natgas price plunge puts heat on producers Dec 30 (Reuters) - A steep drop in natural gas prices is squeezing the profits of producers such as Southwestern Gas Corp , EXCO Resources  and Quicksilver Resources , which may need to shut wells, raise cash, cut staff or seek merger partners in the coming year. Spot natural gas futures  dipped below $3.00 per million British Thermal units on Friday, the lowest level in more than two years, as a glut of gas from shale fields across the United States pushed inventory levels to historic highs.  Fortune Oil says will not accept $2.2 bln Sinopec/ENN bid HONG KONG, Dec 30 (Reuters) - Fortune Oil Plc , a key shareholder in takeover target China Gas Holdings Ltd , will not accept the unsolicited $2.2 billion bid from Sinopec  and ENN Energy Holdings Ltd , a top executive at Fortune told Reuters on Friday.  "We will not sell the stock," Fortune Oil Chief Financial Officer Bill Mok said when asked whether Fortune would consider accepting the HK$3.50 per share bid from China Petroleum & Chemical Corp (Sinopec)  and ENN.            EVENTS TO WATCH TODAY (GMT)   U.S. USDA EXPORT INSPECTIONS WEEKLY (1600)   U.S. API WEEKLY CRUDE STOCKS WEEKLY (2130)   U.S. API WEEKLY DIST. 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