Tuesday, June 24, 2008

1) Saudi Arabia to produce more oil

Last Updated: June 22, 2008: 2:41 PM EDT

JEDDAH, Saudi Arabia (CNN) -- Saudi King Abdullah confirmed Sunday that his country will increase daily oil production to 9.7 million barrels from 9 million to counter the sharp rise in international oil prices.

The Saudi petroleum minister, Ali I. Al-Naimi, said the country will reach the 9.7 million level by July. The announcement comes after Saudi officials had announced modest increases.

It would be Saudi Arabia's highest production rate since 1981.

White House Deputy Press Secretary Tony Fratto praised the step. "Any increase in production in today's oil market is welcome," Fratto. "It is important that we also take steps to increase domestic production and our refining capacity."

Al-Naimi also said the Saudi government will invest in oil projects that would allow Saudi Arabia to have the capacity to produce 12.5 million barrels per day by the end of next year.

King Abdullah's announcement came at the end of the Jeddah energy summit, where he also called for OPEC to set aside $1 billion for a strategy to ease the oil price crisis. He said $500 million should be given to developing nations to help them get the energy they need.

King Abdullah said there are "many factors that made oil prices high." Along with increased demand, he also cited oil speculators and an increase in taxes in consumer nations.

The pain of escalating oil prices - crude sold for more than $134 a barrel on Friday, double year-ago levels - have cascaded throughout the U.S. economy.

Oil has become a hot-button political issue as the cost of gasoline, diesel and jet fuel have spiked in recent months. Congress has scheduled hearings this week to debate legislation that would attempt to dampen prices.

Bodman: Don't blame speculators

On Saturday, U.S. Energy Secretary Samuel Bodman, attending the Saudi summit, attributed the record-high oil prices to lagging production.

Bodman said he did not believe speculators are the cause of high oil prices.

Since 2003, he said, global demand for oil has increased because of industry in China, India and the Middle East. But from 2005 to 2007, there was very little increase in supply.

Nations need an additional supply of energy to market, whether that energy is nuclear, coal, fossil fuels, solar or wind power, Bodman said.

"We spent 30 years digging ourselves into this hole," Bodman said. "It won't be solved soon."

World leaders address supply and demand

British Prime Minister Gordon Brown and Chinese Vice President Xi Jinping both said during speeches at the summit Sunday that their countries need to find ways to bolster production of alternative forms of energy.

"The high price in increases of oil has affected the international economy and has brought tension in the international community," Xi said.

Earlier in the week, President Bush asked Congress to permit drilling for oil in deep water off America's coasts to combat rising oil and gas prices.

"There is no excuse for delay," the president said Wednesday.

Bush also renewed his request that Congress allow drilling in Alaska's Arctic National Wildlife Refuge, or ANWR, clear the way for more refineries and encourage efforts to recover oil from shale in areas such as the Green River Basin of Colorado, Utah and Wyoming.

2) Commentary by David Zwebner, CEO of CommStock Trading 

U.S. Economy
Merrill Lynch cut earnings estimates for several regional banks and there is talk that their own earnings outlook may be in trouble. Yesterday, Citigroup warned of more write-offs in the second quarter and Moody's downgraded its ratings on the bond insurers, MBIA and Ambac. The June 2009 eurodollars closed up .095 at 96.195.

Grains and Cotton
The USDA announced that the June 30th acreage report will be released on schedule, but also pointed out that the data was collected before much of the flooding occurred in the Midwest. Further interviews will take place in June and July so that the USDA can provide a more accurate acreage estimate in the August 12th Crop Production report. December corn ended down 6 cents at $7.555.

Coffee
Dow Jones Newswires reported that Brazil's coffee crop will be safe from freezing temperatures next week, but old crop inventories of coffee are said to be low in Brazil. September coffee closed up 7.05 cents at $1.4670, the highest close in three months.

Sugar
October sugar finished up .37 at 13.08, the highest close in two months, with ongoing support from high corn prices and strong ethanol demand.

Metals
Stats South Africa reported that gold production was down 10.1% in April from a year ago. They also said that the mines are only receiving 90% to 95% of their power needs due to a national shortage of electricity. August gold ended down .50 at $903.70.

Energies
Israel conducted military exercises this month that were likely practice runs for a strike against Iran. Any hostility with Iran makes oil traders nervous because of their closeness to the Strait of Hormuz. August crude oil closed up $2.76 at $135.36.

Currencies
Statistics Canada said that retail sales were up .6% in April to C$35.6 billion.

David Zwebner, CEO
CommStock Trading Ltd.
Tel: +972-(0)2 624-4963
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www.ecommstock.com

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4) Closing Prices for Monday, June 23, 2008 

Amidex: Amidex35 (Class No Load Shares), $17.46; Index, 2560.95, Daily Change,-.28%; “A” Shares NAV, $13.46.

Global Asset Management: Capital Appreciation, $280.51; Composite Absolute Return, $936.30; Diversity, $747.21; GAMCO, $960.04; Interest Trend, $267.33; Trading IV-US$ Class, $147.68; US$ Special Bond Fund, $459.21.

Invesco: Asian Equity Core, $5.04; Bond, $25.73; Emerging Markets Bond, $20.56; European Bond, EUR 4.2381; Gilt, GBP 11.79; Global High Income, $12.22; Japanese Equity Core, $1.42; UK Equity, GBP 5.00. 

JPMorgan Fleming: JF Eastern Smaller Co., $110.00; JF Japan, JPY 17,831; JF Japan Equity, $13.26; JF Japan OTC, JPY 1,114; JF Japan Smaller Companies, JPY 40,924; JF Japan Technology, JPY 52,771;  JF Korea, $41.92; Pacific Securities, $202.41; Pacific Smaller Companies $24.43; Global Bond & Currency, $21.64; JF America, $45.18; JF Europe, $48.67; JF Germany, EUR 21.67; JF Global Equity, $42.05.

PCP: North America, $13.43; Europe, $21.72; Emerging Markets, $20.75; Balanced, $9.09; Aggressive, $7.61.

Platinum (updated once a month – May 2008 Prices): All Weather, $128.07; Equity Plus, TBA; Cap. Prot. Equity Plus, TBA; Cap. Prot.Income Plus, TBA; Cap. Prot. Income Plus A, TBA.

Scottish Provident: Adventurous 1, GBP 2.963; Balanced 1, GBP 2.406; USD Adventurous 1, $2.362;

USD Balanced 1, $2.256; USD Cautious 1, $2.120; For Preference: Baring GUF Eastern Europe, $166.08; Fidelity Funds International, $37.120; Invesco Asian Equity Core, $5.040.

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