OPEC agreed to boost daily oil output by 500,000 barrels from Nov. 1 in a move that raises the cartel’s breached quotas by 1.4 million barrels a day. Despite the boost being above expectations, traders believe that global crude markets will remain tight.
“The market is basically saying that the OPEC hike is just not going to be enough, with demand continuing to grow,” said Tom Bentz, an analyst and broker
with BNP Paribas Futures in New York. Bentz said an expected cut in U.S. interest rates next week is being translated as good for crude oil demand.
I would add that, in addition to already breaking the quotas, increases in production (and targeted decreases) take from one to three months to hit the market, it's not like turning the water tap. The announcement doesn't mean much for the front month futures.
Oil's hit and surpassed the minimum price target, $76.50, we mentioned last week. The question now is who was right when NYMEX trading set volume records. Buyers or sellers. Last week I would have bet two Irish coffee's that we were seeing distribution on up-ticks. Now I'm wondering if there's anything to the "bomb Iran" meme. The buying wasn't just trend following funds.
The futures are still in backwardation, which can set up dramatic moves to the downside.
Also at the ER, Andrea Hotter had a post on Alcoa's exploration of Iceland's geothermal resources:
If it proves successful, the technology from the project could provide “almost limitless” energy and yield abundant, clean, naturally renewable energy worldwide and lead to the first geothermal powered aluminum smelter in the world.
“The technology we hope to develop in Iceland should be applicable wherever there is high temperature geothermal potential,” said Alcoa Executive Vice President Bernt Reitan....
It's not every day that you read DJIA component EVP's use terms like "almost limitless".
This seems like a turnabout is fair play moment, following on last week's ER post that Glitnir was investing in U.S. geothermal:
“There’s competition on all angles…the challenges are numerous, but the opportunities huge,” said Arni Magnusson, managing director of sustainable energy for Glitnir.
Another big aluminum manufacturer, Norsk Hydro, has thought that Iceland is interesting but from a different angle: "Hydro opens worlds first hydrogen station on Iceland". I've been intrigued by NHY ever since reading about Kristian Birkeland as a kid. They are pretty creative, with floating wind turbines, and a couple solar plays in the portfolio, in addition to the hydro.
The AA story apparently got the WSJ.com's Markets Editor thinking of metal bands,
Alcoa is currently operating the Fjardaal smelter at Reydarfjordur (great band name: Fjardaal Smelter — ed.)leading me to comment on the only Icelandic metal band I know:
ed. you missed a calling as a naming consultant. For the Goth/Metal crowd:
http://www.myspace.com/thorshamrariceland
Not to be confused with Iceland’s answer to the Fab Four; Thorshammers. Probably would have gone further as Fjardaal…
Which train of thought led to "Where the hell is the announcement from Live Earth et. Al on the amount and use of proceeds from the concerts?" It's not on the LE website.
Intelligent Giving asks "What on (Live) Earth is going on?"
