UPI Energy Watch

Oil prices fall below $60 on IEA forecast.

The Paris-based International Energy Agency is expected to again cut its estimated demand for 2009 -- the third month in a row.

As expectations for demand for crude oil and petroleum products continue to drop, the global price of crude oil continues to decrease, The Age reported.

Oil slumped Tuesday as Japanese stock markets started the day down followed by the United States, though crude rose slightly Monday as the Chinese announced a $586 billion economic stimulus plan.

Analysts are saying, however, that stimulus packages and interest rate cuts cannot outweigh the overall slowdown that is dragging the market.

Oil prices fell by 10 percent just last week as oil and fuel reserves continue to climb. Last week, the U.S. crude oil reserve increased for the seventh week in a row, this time by about 500,000 barrels.

Along with the IEA, the Organization of Petroleum Exporting Countries and the U.S. Department of Energy also have cut fuel-demand forecasts.

IEA analysts called the current economic crisis one of the worst since World War II and said fuel demand can be expected to fall further.

MEND threatens more oil attacks in Niger Delta.

Believing that the government's military was planning an attack, Nigeria's most powerful militant group, the Movement for the Emancipation of the Niger Delta, warned Monday it would retaliate against the nation's oil industry if government military forces stormed any of its hideouts, U.K. OilVoice reported.

"This will be a big mistake, as it will lead to another oil war where we are sure of a landslide victory," a MEND spokesman said.

Military Task Force Lt.-Col. Chris Musa said the government had no plan to attack any camps.

The announcement was made by MEND at the same time it released four hostages and there was another attack on an oil facility at the Soku gas plant in which six gunmen died.

In September, MEND incited a six-day-long "oil war" on Nigeria, targeting oil installations and forcing Royal Dutch Shell to admit it could not meet all of its expectations while under attack.

Since 2005 more than 200 oil workers have been kidnapped and the country's oil production and export have fallen by about 20 percent.

Norway's StatoilHydro will acquire shale from Chesapeake Energy.

Nordic Business Report said that Stavanger, Norway-based StatoilHydro has announced it signed an agreement with Chesapeake Energy Corp. to jointly explore unconventional gas opportunities worldwide.

StatoilHydro will acquire a 32.5 percent interest in Chesapeake's Marcellus shale gas acreage covering in the Appalachian region of the northeastern United States for $1.3 billion and a $2.1 billion investment in drilling and completion of wells between 2009 and 2012.

On exploration and drilling leases, StatoilHydro will hold 87 percent interest.

StatoilHydro already has operations in 40 countries and holds proven reserves of more than 6 billion barrels of oil equivalent.

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Closing oil prices, Nov. 11, 3 p.m., London

Brent Crude oil: $58.76

West Texas Intermediate crude oil: $63.54

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(e-mail: energy@upi.com)