Oil mixed in Asia as Iran tensions heat up

SINGAPORE: Oil was mixed in thin year-end Asian trade Wednesday as Iran warned it would lock down the crucial Strait of Hormuz if the West imposed sanctions on its oil exports, analysts said.

New York’s main contract, light sweet crude for February delivery, gained two cents to $101.36 per barrel in the afternoon.

Brent North Sea crude for February delivery shed 20 cents to $109.07.

“The thin volume contributed to price volatility,” said financial analysis website easyforexnews.net in a report.

But crude markets remained supported by Iranian threats of closing down the Strait of Hormuz in the event of Western sanctions, senior energy analyst of PFGBEST Phil Flynn said in a report.

“The vice president of Iran says if there are sanctions they will close the straits,” the report said.

“Oil that has been held in check by the uncertain outlook for Europe may focus on threats to supply as we start the new year.”

Iranian Vice President Mohammad Reza Rahimi made his threat Tuesday as Tehran conducted navy war games near the Strait of Hormuz, at the entrance of the oil-rich Gulf where 40 per cent of the world’s oil transits.

Several Western states are considering oil sanctions against Iran over its nuclear programme, accusing it of seeking to develop nuclear weapons.

The strait links the Gulf, bordered by petroleum-rich states such as Bahrain, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, with Oman.

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Decline in currency notes issued

Both notes in circulation and those issued declined in the week, according to the Statement of Affairs of the State Bank of Pakistan, for the week ended December 16.

Notes in circulation stood at Rs1,777.130bn against earlier week’s figure of Rs1,781.328bn, a fall of Rs4.198bn. When compared to the corresponding week a year ago when it was Rs1,653.065bn, the current week’s figure is higher by Rs124.065bn.

Total notes issued also decreased in the current week over preceding week’s level. At Rs1,777.319bn it was smaller by Rs4.205bn over the figure of Rs1,781.524bn recorded a week earlier.

In the corresponding week last year it amounted to Rs1,653.189bn, which shows current week’s figure to be higher by Rs124.13bn over last year’s corresponding figure.

Approved foreign exchange increased in the week to Rs478.236bn, higher by Rs4.935bn over preceding week’s figure of Rs473.301bn. When compared to the corresponding week a year ago, when the figure was Rs517.923bn, the current week’s figure is lower by Rs39.687bn.

Balances held outside Pakistan in approved foreign exchange declined in the week under review. It stood at Rs656.192bn over preceding week’s figure of Rs658.110bn, a fall of Rs1.918bn. Compared to last year’s corresponding figure of Rs538.271bn, the current week’s figure is larger by Rs117.921bn.

Loans and advances of scheduled banks to the three sectors – agricultural, industrial and export – showed a mixed trend in the week under review. The agricultural sector received Rs51.863bn against preceding week’s figure of Rs52.137bn, a decline of Rs0.274bn. The current week’s figure is smaller by Rs1.707bn over last year’s corresponding figure of Rs53.844bn.

The industrial sector received Rs41.560bn against preceding week’s Rs41.381bn, higher by Rs0.179bn. Current week’s figure was lower by Rs1.302bn, over last year’s comparable figure of Rs42.862 bn.

Loan and advances to export sector were Rs186.474bn, higher by Rs1.198bn, over previous week’s figure of Rs185.276bn.Current week’s figure was lower by Rs16.69bn, compared to last year’s corresponding figure of Rs203.164bn.

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Govt contemplating month-long CNG shutdown

KARACHI: Federal Minister for Petroleum and Natural Resources Dr Asim Hussain on Saturday said the government is contemplating a month-long closure of CNG stations in Sindh due to acute shortage of gas.

Speaking to the media in Karachi, the petroleum minister said that the country was facing an extreme shortage of natural gas, and ‘tough’ decisions need to be made to curb the situation.

The decision is not yet final, and the option is being seriously considered, he told reporters at a ceremony organized by the Ziauddin Ahmad Memorial Society.

“Tough decisions need to be made due to unrealistic policies of the previous government,” said the federal minister.

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Iran’s rial plunges to new low against the dollar

TEHRAN: Iran’s currency, the rial, plunged to a record low against the dollar Wednesday, trading at 15,800 to the greenback on the street market, to the concern of officials.

The depreciation marked an acceleration of a long fall in the value of the rial as Western sanctions bit into Iran’s economy. 

The United States and Europe are expected to impose further measures in coming weeks.

The slide undercut avowed Iranian policy to keep the rial steady against the dollar.

President Mahmoud Ahmadinejad put the movement down to “rumours” started by profiteers and sought to reassure the public that the economy was “stable and calm,” in a speech broadcast on state television.

“We are not experiencing any particular problems,” he said.

On Tuesday, Ahmadinejad said “mischief from outside and inside” the country was affecting gold and currency prices, according to Iranian media.

Iran’s parliament on Wednesday summoned the economy minister, central bank chief and foreign ministry officials to explain the current economic situation and ways they planned to weather the sanctions.

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Philippine floods toll exceeds 1,000

MANILA: The toll of dead and missing from a cyclone that swept the southern Philippines has exceeded 1,000, a government agency said Tuesday as cities prepared mass burials for the victims.

The government disaster monitoring council said in its latest update that tropical

storm Washi had left 957 dead and 49 missing after lashing the southern island of Mindanao and surrounding areas over the weekend.

The day before, the National Disaster Risk Reduction and Management Council had listed 662 dead and 82 missing while the Philippine Red Cross gave a tally of 713 dead and 563 missing.

The southern port cities of Cagayan de Oro and Iligan were the worst affected with 579 and 279 fatalities respectively, the disaster management council said in a statement.

Disaster Council Chief Benito Ramos had told that the death toll was rising as the bodies of people who were washed out to sea were floating to the surface.

"They were underwater for the first three days but now, in their state of decomposition, they are bloated and floating to the surface," Ramos told.

Storm Washi brought heavy rains that spawned overflowing rivers, flash floods and landslides that struck coastal slum areas in the dead of night, taking residents by surprise.

The huge numbers of dead have overwhelmed funeral parlours in the region with dead bodies lying everywhere.

Both Cagayan de Oro and Iligan authorities are preparing mass burials of unidentified bodies to avoid health concerns and the overpowering stench.

Philippine President Benigno Aquino is due to visit both cities on Tuesday to survey the damage and check on relief efforts.

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Oil falls below $93 after North Korean leader dies

SINGAPORE: Oil slipped below $93 a barrel Monday in Asia as crude followed the region’s stock markets lower after North Korea announced the death of leader Kim Jong Il.

Benchmark crude for January delivery was down 78 cents to $92.75 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 34 cents to settle at $93.53 on Friday.

In London, Brent crude was down 45 cents at $102.90 on the ICE futures exchange.

Asian stock markets dropped Monday amid fears Kim’s death could lead to greater instability on the divided Korean peninsular. South Korea’s stock market fell 3.3 per cent, Hong Kong slid 2.5 per cent and Japan was down 1.1 per cent.

Crude has fallen from above $100 earlier this month on growing fears Europe’s debt crisis will trigger a recession on the continent next year and undermine global oil demand. Oil prices have been supported by signs of a slowly improving US economy, and the latest data on US housing and gross domestic product are scheduled to be announced later this week.

”Attention to these numbers could shift focus away from Europe for a week or so and toward the US with a potential rebound in the stock market sparking another rally across the energy complex,” energy consultant Ritterbusch and Associates said in a report

In other energy trading on the Nymex, natural gas fell 4.0 cents to $3.09 per 1,000 cubic feet. Heating oil dropped 1.3 cents to $2.80 a gallon and gasoline futures were down 1 cent to $2.49 a gallon.

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Euro could collapse and Europe unravel: French minister

PARIS: The European single currency could break up and Europe itself unravel if political leaders fail to tackle the region’s debt crisis, France’s minister for European affairs warned Thursday.

“The situation is serious…the euro can explode and Europe unravel,” Jean Leonetti told France’s Canal Plus television, hours ahead of what is being seen as a crucial European summit on the issue in Brussels.

He said that if possible all 27 members of the European Union should be involved in talks on tackling the debt crisis but that non-eurozone members might have to be excluded.

“When there are some in the 27 who say ‘I’m not interested in what you are talking about because I never want to join the euro’,” like Britain for example, “this should not cause paralysis,” he said.

The most difficult point of contention at the summit would be “discipline,” he said, a reference to France and Germany’s efforts to force other eurozone members to accept legal limits on their budget deficits and automatic sanctions for countries who break the rules.

Leonetti also criticised credit rating agencies, who have warned eurozone nations of downgrades if they fail to deal with the crisis.

“They annoy me a bit…It is not for the credit agencies to be involved in politics, that is for the people and the people’s representatives,” he said.

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