Crude oil prices fall on economic worries
Despite the passage of the U.S. stimulus package last week, fear of recession in Asia and Europe is keeping oil demand and oil prices down.
Oil prices fell to $37 per barrel Tuesday, a three-week low, Indonesia's Financeroll.com reports. The drop in oil prices is being linked to speculation that Asia and Europe are headed into a deeper recession.
Japan, the third-biggest consumer of oil in the world, recently announced that in the fourth quarter of 2008 its economy experienced the largest decrease in growth since the 1970s.
In addition, British bank stocks have dropped recently, and the nation's first-quarter losses this year are projected to match the losses in the fourth quarter of last year.
Weak economies continue to lend themselves to falling demand for oil which is keeping oil prices low, analysts say.
Britain's economy is expected to shrink an additional 3.3 percent in 2009, 1.7 percent more than expected several months ago.
Oil demand is not expected to increase significantly again until 2010, according to the most recent projections by the Paris-based International Energy Agency.
ExxonMobil, Russia tussle over Pacific project
U.S.-based oil and gas company ExxonMobil is in talks with the Russian government after claiming the government was preventing its subsidiary, Exxon Neftegas Ltd., from working on its multibillion-dollar Pacific Ocean project.
The dispute is over the production-sharing agreement. Exxon Neftegas was supposed to be exempt from restrictions on gas exports from Russia but now is facing pressure from Gazprom to sell the gas from its Sakhalin-1 project to Russia instead of China, The Moscow Times reports.
The conflict follows a decision by the Russian Energy Ministry to approve the budget for Sakhalin-2. The project rivals Exxon's project and is controlled by Gazprom. Royal Dutch Shell has a minority holding in the project, which also includes Russia's first liquefied natural gas plant.
Exxon said because Russia's Energy Ministry has not approved its 2009 investments for the project, it cannot continue work. Sakhalin-1 is also run by a group of Japanese companies including Itochu and Marubeni, a subsidiary of Indian state energy firm ONGC and two Rosneft units.
Indonesia plans $14 billion oil and gas spending for 2009
Oil and gas mining contractors in Indonesia are planning on spending $14 billion this year on exploration and production development.
The increased capital is part of an effort to create new jobs in a country that is expected to experience a decrease in growth next year -- the projected growth rate for 2009 is 3.5 percent.
The recently released spending plan is 15 percent higher than 2008, The Jakarta Post reports, despite falling oil prices, which have been discouraging new investments in oil and gas projects.
In addition to jobs, the new capital is aimed at increasing oil output, which decreased last year by more than 40 percent to 978,000 barrels per day. Indonesia reached its peak oil output of 1.5 million bpd in 1990.
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Closing oil prices, Feb. 17, 3 p.m., London
Brent Crude oil: $43.65
West Texas Intermediate crude oil: $37.07
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