Algeria: 71 kb/dSaudi Arabia rejected the suggestion put forth by Venezuela that OPEC re-establish a target price band. Reaction from industrialized governments was negative. UK Energy Minister Mike O'Brien called the decision "disappointing," as per David Sheppard at Reuters. White House Spokesman Tony Fratto called it "anti-market," as per the AFP.
Angola: 99 kb/d
Ecuador: 27 kb/d
I. R. Iran: 199 kb/d
Kuwait: 132 kb/d
Libya: 89 kb/d
Nigeria: 113 kb/d
Qatar: 43 kb/d
Saudi Arabia: 466 kb/d
U.A.E.: 134 kb/d
Venezuela: 129 kb/d
Also at Bloomberg, Ayesha Daya reported that Saudi OPEC Governor told journalists after today's meeting that:
"'We don't know what's going to happen in December,' [al-Naimi] said, referring to OPEC's next scheduled meeting in Oran, Algeria, on Dec. 17.2. Uchenna Izundu at Platts reports that the "Gas Troika" of Russia, Iran and Qatar will hold their first meeting in Doha on October 27--next Monday. The three believe that they will find means to better cooperate in discussions at the Gas Exporting Countries Forum (GECF) and thus push the organization into a more OPEC-like mold. My sense is that so far this is mostly a public relations effort designed to support oil prices.
'This is a moving target and as it stands now we see no reason to take another cut,' al-Naimi said.
Asked if the group would be ready to increase output if prices surged again in the future, al Naimi said, 'The answer is yes.'
'Our interest is not where the price is, as much as a stable price, a stable inventory and stable supply and demand,' he told reporters.
Al-Naimi said that OPEC was not to blame for the financial crisis.
'We are not responsible for high prices, they were driven by people who were buying long futures and speculating on the market,' he said. 'Now that they are out of the market prices have come down to the levels they are today.'"
3. In another interesting post today, Brad Setser at Follow the Money pointed out that the renmimbi has risen along with the dollar versus world currencies.
The net effect, I suspect, is that the US will still run a significant — though smaller — deficit. And once the deleveraging process is over and the US deficit cannot be financed by the sale of US foreign assets, China’s government will continue to finance a large share of the US deficit.Worth reading in its entirety. The appreciation of the yuan should make oil consumption growth in China less painful, however. In a related story, Platts reports that China might cut guideline prices for petroleum products, given the fall in crude costs. Refiners reportedly stopped hemorrhaging money this month.
The dollar block will be in balance: The oil exporters that peg to the dollar will be in rough current account balance, and the US deficit will roughly match China’s surplus.
That at least is my best current guess.
Also, Liz Mak at Asian Investor reports that Taiwan has decided to institute a 50% ceiling on the percentage of offshore investment limit Taiwanese insurance companies can hold in Fannie, Freddie, Ginnie and Mortgage Backed Securities. The companies will be required to limit their investment in any one of the agency's (Fannie Mae, Freddie Mac, or Ginnie Mae) debt to 25% of their total offshore investment limit. It is my sense that even if a move like this makes tremendous fiscal sense that it must have been approved at the highest levels, and that it is a message to Beijing and Washington. Taipei is probably anticipating a future fall in the dollar, and perhaps signaling openness to closer ties to Beijing. Perhaps Taipei has calculated that the US ability to project a defense umbrella that far out has become critically undermined by the fiscal crisis--and subject to the Achilles Heel of PBoC's dollar holdings. (h/t Yves Smith at naked capitalism)
4. The US Department of Transportation released new data showing that vehicle miles traveled in August fell by 15 billion from a year ago, a reduction of 5.6%. This is a considerable acceleration from the 9 .6 billion vehicle mile drop seen in July--a 3.6% drop in miles driven from a year earlier. Cumulative road travel in the US has dropped by 3.3% for 2008. Andrea Rothman at Bloomberg reports that the International Air Transport Association released data today suggesting that "global air traffic, or the number of passengers multiplied by the distance flown, declined 2.9 percent from a year earlier, with freight traffic dropping 7.7 percent." This is the steepest fall in global air traffic since the SARS outbreak in 2003. The Baltic Dry Index continues to fall. All of these are indicators of demand destruction for oil ... and the range of its products ... but also of drastic reduction in trade, which as several others have pointed out, will exacerbate the current financial crisis.
5. Alexander Kwiatkowski at Bloomberg reports that options to sell oil at $50/b rose 143% (to $1.50) today.
6. Christopher Swann and Tasneem Brogger at Bloomberg report that the IMF is considering a plan to offer member countries credit of as much as five times the amount of their quota contributions.
"South Korea's IMF quota is $4.4 billion, meaning it could get as much as $21.8 billion under the potential program. Mexico might qualify for $23.5 billion, with $22.6 billion for Brazil and $10 billion for Poland."Other countries reported to be looking to IMF for support include Russia, Turkey, Hungary, Belarus, Ukraine and Pakistan, as per Terence Roth and Christopher Emsden at Real Time Economics.
7. Mary Beth Sheridan at the Washington Post reports that the US has handed over security responsibility to the Iraqi Government in the "triangle of death" south of Baghdad. Juan Cole reports that the Sadr Movement has begun a protest of the draft security agreement between the al-Maliki government and the Bush Administration.
Al-Hayat also chronicles the failure of the visit to Iran of Iraqi Kurdish leader Massoud Barzani, who was seeking to reassure his Iranian colleagues about the status of forces agreement. President Mahmoud Ahmadinejad, Speaker of the House Ali Larijani, and Expediency Council head Akbar Hashemi-Rafsanjani all denounced the proposed agreement as a humiliation for Iraq and an infringement against it sovereignty. Larijani compared it to the agreement between the Shah of Iran and the US over troops and bases in Iran, which restricted GIs from being tried in Iranian courts.8. Warren P. Strobel at McClatchy Newspapers reports that anonymous sources within the Bush Administration say that it will announce an agreement to establish an interests section in Iran in the middle of November, after the election. The Fars News Agency reports that the US Treasury Wednesday imposed additional sanctions on the Export Development Bank of Iran (EDBI), essentially seizing any assets they might hold in US jurisdiction. The same article remarks on the electricity shortage in the country just now:
Iran currently suffers from an electricity shortage that has forced the country into adopting a rationing program by scheduling power outages - of up to two hours a day - across both urban and rural areas.9. Qaiser Khan Afridi at Pakistan's The News reports that people in major cities throughout the country have taken to publicly burning their power bills in protest over the brown and black outs plaguing the country.
10. Kurt Achin at Voice of America reports that UN officials believe that the situation in North Korea has deteriorated so much that a substantial portion of the population is facing starvation in the near future.
11. Maya Jackson Randall at the Wall Street Journal reports that the National Association of Realtors released statistics which suggest that "existing-homes" sales--or home resales--rose to a rate of 5.18 million per annum, a 5.5% increase on August's reading.
12. Ye Xie and Agnes Lovasz at Bloomberg report that the Yen has risen to a 13 year high versus the dollar as the carry trade unwinds. That is, investors sold high-yield financial products worldwide and paid back the low cost Yen-based loans they used to finance the original purchases.
13. Asia News reports that the pogrom targeting Christians in Iraq continues.
14. Editors at Wall Street Journal Asia argue that the land rights reforms China has announced it will introduce to combat the economic slow down do not go far enough and that full-fledged property rights need to be introduced.
15. Polina Devitt at Reuters reports that Mechtel, the coal mining company which Vladimir Putin attacked a month or so ago leading to a steep drop in its share price and then to shares in Russian companies generally, has announced a decision to reintroduce the plan to sell preferred shares on the market, the plan which led to Putin's criticism in the first place. Well, I guess Moscow can snap em up cheap now.