Thursday, June 10, 2010

BP: World 2009 oil use drop biggest since 1982; IEA slightly raises 2010 oil demand growth forecast –

· BP - the stock is in the red in London but well off its lows (shrs hit 345p earlier but is now up around 375p); the stock was hit in the US on Wed amid worries that its liability in the Gulf was rocketing higher (the US Interior Sec, during testimony on Wed, suggested that  BP would be forced to pay wages to all the workers laid off as a result of the deepwater drilling ban while officials are threatening to "take action" to ensure the company has enough money to pay all claims); however, BP says it doesn't see any reason for the weakness while a Standard Chartered note this morning talks about how Petro China would benefit from buying BP.
· BP's shares hit 13-year low as US raises pressure – BP hit its lowest level in over 13 years as fears grew over the future of the company. Analysts are predicting the company will be forced to cut its dividend and others are worried that BP would be forced to sell itself. Guardian
· BP: World 2009 oil use drop biggest since 1982 – BP said that although world oil consumption fell by 1.2M barrels per day in 2009, its largest drop since 1982, consumption should rise this year due to strong demand in emerging markets. Reuters
· Drilling ban – Interior Secretary Salazar testified Wed and said it was possible the 6-month moratorium on deepwater drilling could be lifted earlier but also warned it may be extended; Salazar said BP would be held responsible for any job losses (raising further the potential liability being faced by BP – this risk contributed to further weakness in BP shrs on Wed) – Reuters 
· US lawmakers press Interior on drilling ban – US lawmakers grilled Interior Secretary Salazar on Wednesday regarding his six-month ban on deepwater drilling, saying the ban hurts thousands of jobs in the region. Reuters
· BP – a spokesman for the company says “nothing has changed” since Fri (when the company last updated investors) and that it saw no justification for the weakness…..restructuring experts agreed that the firm has the financial capacity to handle GOM liabilities; however, interior sec Salazar said Washington may pursue the co to pay compensation to workers laid off as a result of the 6-month drilling moratorium while the DOJ warned that it could take action to ensure BP has enough money to cover damages from the spill….this could mean an injunction against BP paying a dividend (Reuters)

· BP thinks it may be heading for a showdown w/the White House over its ultimate liability for the GOM spill (Reuters) 
· BP – Standard Chartered thinks PetroChina would benefit from a takeover of BP (Bloomberg)
· RIG – Barron’s weekday trader is positive on the stock. Barron’s cites that at just over 5x forward earnings, the stock has rarely been this cheap. Barron’s
· IEA slightly raises 2010 oil demand growth forecast – The IEA revised up its demand growth estimate due to increased fuel use in the US. The forecast was increased by 70K barrels per day to 1.68M from last month’s estimate. Reuters
· Indonesian coal firm aims for $250 mln IPO – Businessman Samin Tan is aiming to raise $250M in an IPO of a stake in his unlisted coal company later this year, which would offer investors a chance to cap into coal assets in Indonesia, the world’s largest coal exporter. Reuters
· Hargreaves Services terminates talks with UK Coal – The British coal miner said it would not pursue a merger with troubled miner UK Coal. Reuters
· Oil rebounds towards $75 as China exports surge – Oil reversed losses overnight, moving towards $75 on confirmation of strong Chinese exports which outweighed weak demand readings in the United States. Reuters
· Saudis supply full July crude vol to 3 Asia buyers – Saudi Arabia said it will supply full volumes of crude oil in July to at least seven Asian buyers, consistent with June levels. Guardian
· Nations may block oil, gas investment in Iran – A UN Security Council resolution against Iran could clear the way for individual states and the EU to block companies from expanding Tehran’s oil and gas exports. Reuters

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