Oil producers have increased their sales for the first time in four weeks

Oil producers have increased their sales for the first time in four weeks to lock in profits near $ 90 a barrel, reversing a two-year contango and increased speculation that stocks will decline.

Producers and traders increased their net short positions called in crude futures and options by 13 percent in the week ended Dec. 7, the pricing for the output of the wells, the Commodity Futures Trading Commission said in its Commitments of Traders report. It was the second largest in sales in two years.

covering oil for future delivery pressure of the longer maturity contracts, erasing the deferment or premium paid for subsequent shipments. Hedge funds as exaggerated as oil for delivery in December 2011 began trading at a premium to December 2012 for the first time since the week that Lehman Brothers Holdings Inc. filed for bankruptcy in September 2008.

"The producers looked at prices of $ 90 and said it would take some of that," said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. "Hedge funds say, 'We are at $ 90, OPEC does not seem to care and markets are shrinking."

Crude oil for December delivery was established in 2011 $ 90.14 a barrel on December 3, 1993 cents more than the future of December 2012, which closed at $ 89.21 on the New York Mercantile Exchange. The premium will be widened to a record $ 1.50 on 6 December. January crude oil ended 10 December delivery at $ 87.79.

Short positions

The net short positions of producers and traders reached a minimum of two years the week ended November 30 at the increase in sales expanded its position to 153,992 net short futures and options to combine the week ended 7 December. It was the biggest advance in net short positions and the seven days ended Oct. 26, which was the biggest sell-off in two years.

"The increase in sales positions of producers and net short-confirms that producer hedging, forward sales, was a key factor in the flattening of the breakthrough curves of crude oil in the last week," said Michael Wittner, head New York's oil market research at Societe Generale SA.

Hedge funds and other large speculators increased their bullish bets more than nine weeks, increase the net positions of call time, or bets that prices will rise, by 26 percent, showed the report of the CFTC.

The Organization of Petroleum Exporting Countries, which produces about 40 percent of world supplies, decided at a meeting Dec. 11 in Quito, Ecuador, to maintain current oil production quotas.

The group, which meets in June, has not altered its official ceiling since December 2008 when it announced cuts supply register and a fee of 24.845 million barrels a day. OPEC has breached its production quotas this year by an average of 1.934 million barrels a day, most of the last six years.

The decline in reserves

The current price ratio, known as backwardation, is an incentive for traders to liquidate inventories, said Andy Lipow, president of Lipow Oil Associates LLC in Houston. In a contango market, traders cover transport, insurance and storage in the futures delivery point for New York in Cushing, Oklahoma, with the sale of oil for future delivery at a higher price than today. As the curve is inverted, it becomes impossible, he said.

"There is no contango compensation for tenants who have to pay monthly fees of storage at Cushing," said Lipow. "As a result, one can expect that Cushing inventories starting in the new year will be liquidated."

U.S. inventories fell more than expected last week, falling by 3.82 million barrels to 355.9 million dollars. Supplies are expected to decline from 1.4 million, according to the median estimate of 16 analysts surveyed by  us.

Oil shares

Total stocks of U.S. oil, including diesel, gasoline and crude, fell 43 million barrels to 1.101 billion since reaching a record in the week ended Sept. 17, according to an Energy Department report on 8 December.

"The most bullish of oil look at the forecasts of the demand," said Lipow. Prospects for the U.S. and demand around the world have increased, he said.

The International Energy Agency raised its forecast for world demand for 2011 in its monthly report on the oil market on 10 December. Global oil use will average 88.8 million bpd next year, up 1.6 percent this year and about 260,000 barrels more than expected in November.

U.S. demand rise 2 percent to 19.18 million bpd next year, according to the Paris-based adviser to oil-consuming countries.

Hedge Funds

Managed money, including hedge funds, pools of commodity trading advisors and commodity, increased net long positions by 42,603 futures and options combined to 206,807 the week ended December 7 According to the report of the CFTC.

In other markets, the net positions along the combined futures and options contracts on four natural gas futures rose 28920.8 equivalent, or 40 percent, to 100,567.8 for the week ended on 07 December, the highest since August was the report of the CFTC.

The measure of net longs includes an index of four contracts adjusted to the equivalent futures: the NYMEX natural gas futures, Nymex Henry Hub Swaps, NYMEX Henry Hub Swaps and penultimate ICE Henry Hub Swaps. Henry Hub in Erath, Louisiana, is the delivery point for Nymex futures exchange, the reference prices for fuel.

Managed money bullish long-term commitment to gasoline rose 4.6 percent, the weekly sessions, 68,434 futures and options combined, the CFTC data showed. Net-long betting heating oil increased by 56 percent, or 15,249 futures and options combined, to 42,487.

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Edison is considering a capital increase of more than 1 million eurosto strengthen its balance sheet as non-profitable contracts

Edison SpA, Italy's second largest producer of energy, is considering a capital increase of more than 1 million euros (1320 million dollars) to strengthen its balance sheet as non-profitable contracts for gas supply, threatening to further erode more income, people with direct knowledge of the situation, he said.

Edison earnings before interest, taxes, depreciation and amortization next year may be 30 percent below consensus expectations of analysts of about 1.35 million euros, and may be 50 percent less than on the result conversations with suppliers such as Russia's OAO Gazprom, said the people, who declined to be identified because the information is not public.

decline in energy demand can also force based in Milan Edison to record the value of its stake in the Italian electricity Edipower by 40 percent and gas field offshore Abu Qir Egypt about a third, the people said . Edison's major shareholders are Electricite de France SA and Italian utility A2A SpA.

Edison is losing money supply contracts, and you're paying more for imports of natural gas that can sell the fuel. The company, leading to net debt of almost 4 billion euros at the end of the third quarter, said in October contracts will negatively impact 2010 EBITDA of 300 million euros. Edison's credit rating was reduced one notch to BBB last month by Standard & Poor's.

Shares Fall

Edison shares fell to 6.3 percent, the steepest intraday decline in seven months. The action was 5.4 percent, to € 0.88 in Milan at 9:22 am. A2A retreated 3.1 percent to € 1,045 and EDF declined 1.4 percent to € 31.52 in Paris.

A capital increase was discussed by the Edison Board earlier this month and a decision on whether to proceed has not been, the people said. Investment bankers are considering various options to strengthen the balance sheet of the company, including a capital increase, they said.

An Edison spokesman could not immediately comment when contacted by phone. EDF spokeswoman Carole Trivi was not immediately available for comment in Paris. A call to the A2A press office was not immediately returned.

Edison, which uses gas in power generation and supplies directly to customers, may have to write the book value of its 50 percent stake in Italian generator Edipower € 2,200,000,000 to about 3.6 million euros, said people.

Economic Slump

In Italy, energy demand has fallen amid an economic crisis, while Edison is paying more for natural gas can be sold because of contracts signed when oil prices were higher.

"The group of financial indicators have deteriorated significantly as a result of pressure on earnings and cash flows in light of difficult market conditions in Italy," said S & P said in a report of 02 November. The ratings company also cited the January 2009 acquisition of a concession for several years to develop and explore the area of Abu Qir for more than 1 million euros and a failure to renegotiate gas contracts.

Edison had hoped to conclude the sale of a stake in the Abu Qir field earlier this year, Edison CEO Umberto Quadrino said in October 2009. The company was never able to find a buyer for participation, a person familiar with the matter said.

Edison said in October its debt is closer to 3.6 million euros at the end of the year. Moody's downgraded the long-term senior unsecured to Baa3 Edison in October.

More Stock

An offer of rights to require shareholders to buy more shares or the risk of dilution of their shareholdings. EDF owns about 50 percent of Edison. A2A, the largest municipal utility in Italy, owns 51 percent of the holding company Delmi Spa, which jointly owns Transalpina di Energia Srl with EDF. Transalpine has 61.2 percent of Edison. Carlo Tassara SpA, the financial holding Romain Zaleski, owns a stake of around 10 percent.

EDF's involvement in Edison supports the rating of the company's debt, which would be a lower level without the support of the French company, S & P said. A2A, meanwhile, is trying to reduce its own debt, which amounted to € 4,700,000,000 by the end of last year through the sale of assets.

EDF and A2A in the past have differed on the A2A asked to play a greater role of Edison management, as well as the company's effort to create a nuclear company to a rival between EDF and Enel SpA A2A said in June that hired investment bank Mediobanca SpA to advise on options for Edison.

The Edison control companies through an agreement that expires in September 2011 and must be renewed six months in advance. Edison Quadrino said in October that the price of the shares of Edison was "a problem", as companies sought to reach agreement on the control.

Edison shares rose 15 percent last week after EDF CEO Henri Proglio reiterated its commitment to Italy and EDF agreed to sell a stake in a German power company for 4.7 billion euros. That prompted speculation that the company will use the funds to buy the rest of Edison, which has a market value of around 4.7 million euros.

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Pike River Coal Mining Company is unlikely to repay loans

Pike River Coal Co., owner of a coal mine in New Zealand, where 29 miners died after the explosion last month, had receivers appointed after telling the principal creditors are unlikely to be able to repay loans.

Administrators from PricewaterhouseCoopers were appointed by New Zealand Oil & Gas Ltd., which owns about 30 percent of the shares of the company and is one of the largest secured creditors, at the request of the board Pike, President John Dow, said in a statement. Pike River shares have been suspended since Nov. 22 after the first explosion at the mine on the west coast of South Island in the nation.

"The company is in a precarious situation financially," Dow Jones said in a statement.

The first explosion in Wellington, New Zealand based on Pike River mine occurred on 19 November, followed by a larger explosion on 24 November that led the police to say he would not have survived. Rescuers have so far been unable to enter the mine, part of which is burning underground. The incident is the country's worst mining disaster in 96 years.

"It will be a long time before any resumption of mining can be contemplated, with Pike River quickly to the insolvency, bankruptcy is an inevitable step," said David Salisbury, New Zealand Oil & Gas chief executive officer, in a statement.

New Zealand Oil shares fell 2 cents to 87 cents in New Zealand at 12:45 pm in Wellington. Pike River traded at 88 cents in New Zealand on 19 November, giving it a market value of NZ $ 356,700,000 ($ 266,500,000).

Uncertain Future

The Board has informed the recipients that their priorities are to recover the bodies of the dead and make the mine safe to cooperate with all investigations into the cause of the disaster, and to ensure that employees get their rights, "said Dow.

The board also wants to preserve the asset value "while recognizing that there is considerable uncertainty about the future of the mine," he said. "Both Pike and New Zealand oil are supportive of any intention to reopen the mine over time."

New Zealand said oil seal Pike had confirmed their debts are substantial and above their cash and other predictable sources of funds immediately, the Wellington-based company said in a separate statement.

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China, the rate Caution "positive" for stocks, former Golden Bull Zhen He says

China's decision to refrain from increasing interest rates higher and banks to set aside larger reserves in turn benefit the people, a fund manager at Shanghai Huili Asset Management Co., said.

central bank's lack of action "is pretty good news:" Zhen, who helps manage $ 301,000,000 as general manager of Shanghai Huili, said in an interview on 11 December after the publication of economic data, including a report showing the fastest inflation in 28 months. "The central bank will be very cautious about interest rates."

He previously worked at GF Fund Management Co. in Guangzhou and was awarded the "Golden Bull Award" by the China Securities Journal in 2005, the active site Huili said. His fund gained 17 percent this year, the website showed, compared with Shanghai Composite Index falling 8.3 percent.

China will not raise rates, as inflows from foreign fuel and exacerbate inflation, he said, echoing comments made by Wu Xiaoling, a former central bank deputy governor, a hedge fund conference in Shanghai 11 December.

The Shanghai Composite Index rose 2.9 percent to 2922.95 at the close 3 pm, the most since Oct. 15. He fell to the lowest level in two months on December 9 after the statistics office has brought forward the publication of economic data to December 11, 1913 December, indicating that some economists like Glenn Maguire, Societe Generale SA to an increase rate could come as early as this weekend. Instead, the central bank increased reserve requirements by 50 basis points from December 20, the third increase in five weeks, according to a statement after the market close on December 10.

Data Leak

The Shanghai index, the worst performer in Asia this year, has lost 7.5 percent since reaching a peak almost seven months, on November 8 on concern that monetary tightening to curb economic growth. Shares in the index are valued at about 16 times estimated earnings, near a minimum of two months.

China raised borrowing costs in October for the first time since 2007, inflation reached 4.4 percent that month, the highest since September 2008. November's consumer prices rose more than expected 5.1 percent from a year earlier, the statistics bureau reported on 11 December.

"The market has already digested largely negative factors such as hardening of the policy and the inflation rate of 5.1 percent," he said, just buy shares of companies with a market capitalization of large such as banks, developers and insurance companies because valuations. The filtered data before the announcement, the Economic Information Daily reporting on the number of inflation on 10 December.

Under pressure

"The global environment of low interest rates prevent China's central bank to raise interest rates," said Wu, a former central bank deputy governor. Emerging markets face capital inflows and "excessive money supply is a major reason for inflation in China," he said.

Zhou Xiaochuan, governor of the People's Bank of China, told China on 16 November is under "pressure" of capital inflows after the U.S. government announced a second round of quantitative easing to stimulate its economy.

Investors want to see higher interest rates, according to Hugh Simon, co-manager of the Dreyfus Greater China Fund. Simon likes china technology, industrial and consumer stock.
Goldman Sachs Group Inc. said in a report published today it would be "largely positive" if China raises lending and deposit rates soon to curb inflation amid the potential recovery of U.S. economy in 2011.

Economic Conference

London-based Capital Economics Ltd. said Dec. 10 that an increase in the rate after holding a senior economic policy meeting in Beijing this weekend "can not be ruled out."

China's leaders pledged to change the pattern of growth of the nation in 2011 and also focus on price stability after the result of calling Central Economic Work Conference yesterday, attended by President Hu Jintao and Premier Wen Jiabao. There were no specific targets for growth, inflation and lending, according to the first reports on state radio.

Hong Hao, a global strategist based in Beijing at China International Capital Corp., the top ranked brokerage for research in China in Asiamoney's annual survey, said the central bank's risk perception of being "behind the curve "not to increase borrowing costs.

"Behind the Curve '

China's economic data showed growth in November is to resist government curbs. The industrial-production growth accelerated to 13.3 percent last month from a year earlier, exceeding economists' estimates, the median of 13 percent. Urban fixed asset investment also grew at a faster pace, rising 24.9 percent in the first 11 months of 2010. Retail sales gained 18.7 percent in November from a year earlier.

"If the market does not understand this weekend, it is likely that the market sees monetary policy is behind the curve," Kong said in a report on 10 December after the announcement of reserve ratio. "Investors should stay put in the short term."

The benchmark rate for one-year deposits stood at 2.5 percent, less than the annual rate of consumer price inflation and the interest rate is 5.56 percent.

"The market was worried by rising interest rates, and eventually came up with a reserve ratio increase," said Luo Bin, general manager of Shanghai Mingyu Xiaoyang Investment Management Co., which manages the equivalent of $ 60 million. "The market interpreted as good news, since it has eliminated the uncertainty in the short term interest rates will not increase in the near future."

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EU Agreement With Poland Pension Rollback can prevent Hungary-Style Review

The European Union may be able to keep countries to follow the example of Hungary, which is holding a pension reform, to easily accept the rules of deficit countries to establish private retirement plans.

Poland and the European Commission agreed that the financial burden of changing some of the payments to private funds "taken into account" when the EU assesses its budget deficit and public debt, Deputy Finance Minister Ludwik Kotecki said on 10 December. While the agreement will not change the statistics of the EU, Poland may leave debt reduction report by national accounting rules, Jan Krzysztof Bielecki, an adviser to Prime Minister Donald Tusk, Rzeczpospolita newspaper wrote today in Warsaw.

Eastern EU members, including Poland pension contributions diverted from the pay as you leave the state of the system of private accounts to model the 27-nation bloc says it will be more sustainable. The review undermined their budgets funds to pay current retirees. Hungary moved to direct the funds to the state to meet the deficit targets of the EU imposed after the commission rejected a request to account for pension costs.

"Alarm Bell '

"The decision of Hungary was a serious alarm," said Marcin Mrowiec, economist at Bank Pekao in Warsaw, by telephone on 11 December. "The Commission probably realize that the current rules, which have been so disappointing for countries that reformed their pension systems are even more daunting for those who have not tried it yet."

Hungarian lawmakers are scheduled to vote today on rules to govern the private accounts to the state pension. This action is necessary to keep public debt to "bury" the country's economy, Prime Minister Viktor Orban said in a video posted on his Facebook page yesterday.

The new rules will apply during the excessive deficit procedure, sanctions for countries that breach the limit of budget deficit, the Finance Ministry said in a statement on its website yesterday.

Polish Economy Minister Waldemar Pawlak proposed suspending budget transfers to private pension funds to keep public debt of more than 55 percent of gross domestic product, which would lead to austerity measures. The government expects that the ratio increased to 53.2 percent this year, or 55.4 percent of the EU standards.

"Pretext"

The total value of pension contributions to private funds spent since 1999 accounts for 211 million zlotys (69.3 billion), or about a third of Poland's public debt. The country's debt would amount to 40 percent of GDP when stripped of the amount of debt held by pension funds, according to Finance Minister Jacek Rostowski

"This gives the government an excuse to redefine the public debt without nervousness of the markets," said Piotr Kalisz, chief economist at Citigroup Inc. 's unit Bank Handlowy SA in Warsaw. "Reduction of pension costs also make it easier to adopt the euro, though no one in Poland is thinking about that now."

Rostowski did not rule out the decision to exclude some costs of pensions for the definition of Poland's public debt while reducing the debt ceiling self-imposed, Rzeczpospolita reported. That would be "reasonable" to delay the decision until the Commission specifies the proposals, he said.

"An obvious and direct effect" of the decision of the Commission is to "eliminate the risk of breaching the 55 percent of the debt," Bielecki wrote in the newspaper.

'Profound changes'

Both Rostowski and Bielecki, said the most favorable treatment from the EU will not change Poland's current debt or borrowing needs, which means that the country has yet to consider modifying its pension system to find savings. The agreement does not imply any need to change the statistics or the law relating to statistical methodology in Polish law, the Ministry of Finance said in a statement.

Principles on how to "calculate and include these costs in the evaluation of EU countries' finances will be negotiated by a working group and written in the code of conduct for the Stability and Growth Pact, which sets out the fiscal rules for the trading bloc, Kotecki said. The mechanism will not change the official statistics compiled by Eurostat, said.

"If the compromise reached with the Commission relates only to the excessive deficit procedure, not a breakthrough," said Lukasz Tarnawa, chief economist at PKO BP in Warsaw.

The Commission in July urged EU members to increase the retirement age and pension systems review, the aging population will increase pension costs.

"Critical phase"

Brussels officials rejected a request in August for nine EU states, including Sweden, to account for the costs of new pension systems in the calculations of debt and deficits. Most countries face greater scrutiny of its budget deficit, the risk of a reduction in EU subsidies.

In most EU countries, pensions are paid by active workers. Demographic trends show that the ranks of retirees will swell and the number of taxpayers is set to decline. Fund-based systems reduce this burden through the investment of pension contributions now to fund employee pensions later.

"We are reaching a critical stage in the first cohort of baby boomers are approaching retirement and the European population of working age is set to start the reduction from 2012," the Commission said in a report on July 7 .

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