1. business and industrial
2. energy
3. oil

INSIDE U.S. OIL
Wednesday, October 29, 2014
Futures (Front Month)
NYMEX light crude
Close
Net Change
$81.42
Pct Change U.S. Cash Crude
$0.41
0.50
NYMEX RBOB gasoline
$2.20
$0.01
0.66
NYMEX heating oil
$2.49
$0.01
0.45
ICE Brent crude
$86.03
-$0.10
0.12
ICE gas oil
$739.75
$4.25
0.57
Brent/WTI spread
-$4.61
$0.51
11.06
Reuters 321 Crack Spread
$13.66
$0.14
1.02
Price
Net Change Differential Diff Change
Light Louisiana Sweet
$84.21
$84.21
2.98
$2.98
Poseidon
$78.86
$78.86
2.35
-$2.35
Thunder Horse
$81.81
$81.81
0.63
$0.63
U.S. Cash Crude Products
(Values in Cents/Gal)
Price
Net Change Differential Diff Change
NYH Prompt Heating oil
233.85
233.85
NYH RBOB
225.67
USG ULSD
243.25
USG Prompt Gasoline
205.92
-15.00
15.00
225.67
7.00
7.00
243.25
-5.00
5.00
205.92
-10.00
10.00
CHART OF THE DAY
TODAY’S MARKETS
Click on the chart for full-size image
OIL: Brent crude oil extended gains above $86 a barrel on Wednesday
as traders anticipated the end of quantitative easing in the United
Stated would squeeze the dollar. "We’re likely to see a slightly weaker
dollar today, if the Fed is as dovish as expected, and that will support
oil prices in the short term," said Michael Hewson, chief analyst at CMC
Markets in London.
FOREX: The dollar steadied on Wednesday as investors awaited guidance from the U.S. Federal Reserve, expected to reiterate a cautious
stance on raising interest rates when it wraps up a two-day policy meeting later in the day. "There is no doubt that the market goes into this
with a very dovish expectation," said Adam Cole, global head of currency strategy at RBC Capital Markets in London.
MARKET NEWS
 Fed set to end one crisis chapter even as global risks
rise
 Cheaper oil gives Southeast Asia a chance to grow better
 New Total chief to visit key oil contacts as Q3 profits dip
 US regulator drops BP, Statoil oil price-fixing probe
 Petrobras may delay building two refineries due to costs
GLOBAL MARKETS: World stocks rose on Wednesday, lifted by
strong corporate earnings and investor optimism that the U.S. Federal
Reserve won't raise interest rates for some time, even as it is expected
to officially wind down its bond-buying stimulus programme. "Markets
are banking on the prospect that the Federal Reserve will do everything
in its power to anchor interest rate expectations at, or below, current
levels," said Michael Hewson, chief strategist at CMC Markets in London.
 Qatar's Tasweeq to slash condensate exports in 2016
BEYOND THE HEADLINES
 Hess to proceed with $6 bln U.S. oil project despite price
Sanctions bind Russia's energy elite to Putin
dip
 Drilling industry dip could last into 2016 – Maersk
Cheaper oil may prompt BOJ to cut near-term price view but no
change seen to inflation target
REFINERY NEWS
U.S. EVENTS TO WATCH TODAY (EST)
 Japan JX shuts condensate splitter over poor margins
 FEDERAL RESERVE RELEASES STATEMENT AFTER TWO-DAY
MEETING (2200)
OIL ANALYTICS: ASIA SWAPS FORWARD CURVE
INSIDE U.S. OIL
October 29, 2014
OIL ANALYTICS: ASIA SWAPS FORWARD CURVE (0830 GMT)
ICE BRENT FUTURES FORWARD
ICE Brent Fut. Fwd Curve
DUBAI SWAPS FORWARD CURVE
1M - 1Y 1M
Yield
90.50
90.00
1M 2M 3M 4M 5M 6M 7M 8M 9M 10M
Dubai Swaps Fwd Curve
88.00
86.00
.12
84.00
.12
1Y 1M
1M 2M 3M 4M 5M 6M 7M 8M 9M 10M
FO180 FOB CARGO SG FWD CURVE
FO180 FOB Cargo SG Fwd Curve
1M - 1Y 1M
Yield
88.35
88.00
1Y 1M
FO3.5% BARGES ARA FORWARD CURVE
1M - 1Y 1M
Yield
500.00
501.66
FO3.5% Barges ARA Fwd Curve
2M - 1Y 1M
Yield
471.91
470.00
495.00
460.00
490.00
.12
1M 2M 3M 4M 5M 6M 7M
9M
.12
1Y 1M
2M 3M 4M
FO380 FOB CARGO SG FORWARD CURVE
FO380 FOB Cargo SG Fwd Curve
Naphtha CFR Japan Fwd Curve
2M - 1Y 1M
Yield
2M - 2M
Yield
751.00
750.00
730.00
480.00
.12
9M 10M
1Y 1M
740.00
485.00
7M
9M 10M
NAPHTHA CFR JAPAN FORWARD CURVE
494.41
490.00
2M 3M 4M
7M
.12
2M
1Y 1M
2
INSIDE U.S. OIL
October 29, 2014
OIL ANALYTICS: ASIA SWAPS FORWARD CURVE (0830 GMT)
NAPHTHA CIF NWE FORWARD CURVE
Naphtha CIF NWE Fwd Curve
NAPHTHA FOB SG FWD CURVE
1M - 1Y 1M
Yield
729.00
720.00
Naphtha FOB SG Fwd Curve
1M - 1Y 1M
Yield
80.50
80.00
79.00
710.00
78.00
77.00
.12
700.00
.12
1M 2M 3M 4M 5M 6M 7M 8M 9M 10M
1M 2M 3M 4M 5M 6M 7M 8M 9M 10M
1Y 1M
ICE GO FUT. FWD CURVE
ICE GO Fut. Fwd Curve
1Y 1M
GO FOB CARGO SG FORWARD CURVE
2M - 2M
Yield
GO FOB Cargo SG Fwd Curve
744.00
744.00
2M - 1Y 1M
Yield
102.87
102.00
743.50
100.00
743.00
742.50
.12
.12
2M
2M 3M 4M 5M 6M 7M 8M 9M 10M
JET FUEL FOB CARGO SG FWD
Jet Fuel FOB Cargo SG Fwd Curve
5M - 6M
Yield
103.47
103.00
102.00
101.00
.12
5M 6M
3
1Y 1M
INSIDE U.S. OIL
October 29, 2014
MARKET NEWS
Fed set to end one crisis chapter even as global risks rise
Cheaper oil gives Southeast Asia a chance to grow better
WASHINGTON, Oct 29 (Reuters) - The U.S. Federal Reserve
on Wednesday is expected to shutter its bond-buying program,
closing one controversial chapter in its crisis response even as it
struggles to manage a full return to normal monetary policy.
The Fed is likely to announce at the end of a two-day meeting
that it will no longer add to its holdings of Treasury bonds and
mortgage-backed securities, halting the final $15 billion in
monthly purchases under a program that at its peak pumped
$85 billion a month into the financial system.
An important symbolic step, the end of the purchases still leaves
the Fed far from a normal posture. Its balance sheet has swollen
to more than $4 trillion, interest rates remain at zero, and, if anything, recent events have increased the risk the U.S. central
bank may need to keep propping up the economy for longer
than had been expected just a few weeks ago.
The statement the Fed will issue at 2 p.m. (1800 GMT) will be
read carefully for signs of how weak inflation, ebbing global
growth and recent financial market volatility have influenced
U.S. policymakers. There is no news conference scheduled
after the meeting and no fresh economic forecasts from Fed
officials.
JAKARTA, Oct 29 (Reuters) - Rising risks of deflation in major
economies have renewed worries about global growth, but sliding prices for oil and other commodities should boost most of
Southeast Asia.
In much of the region, "consumers are going to feel a lot richer,"
said economist Gareth Leather at Capital Economics. "The
benefits to growth are quite significant."
Since June, the price of a barrel of Brent crude has dropped by
25 percent to $86, which means big savings for Southeast
Asia's large oil-importing economies - Thailand, Philippines and
Indonesia - though pain for net exporter Malaysia.
Anthony Jude, senior adviser to the Asian Development Bank's
energy section, said lower oil prices also give some countries
"an opportunity to remove subsidies".
For Thailand, whose economy has floundered for a year due to
political turmoil and faltering exports, cheaper oil could mean
faster growth. Its annual growth rate will rise 0.45 percentage
points for every 10 percent fall in oil prices, according to Bank of
America Merrill Lynch.
New Total chief to visit key oil contacts as Q3 profits dip
LONDON/BRUSSELS, Oct 28 (Reuters) - Oil majors BP and
Statoil said the U.S. Federal Trade Commission (FTC) was
closing a probe into anticompetitive practices in oil price reporting, while a European Union investigation continued.
European officials in May 2013 raided the offices of oil majors
BP, Shell and Statoil as part of an investigation of suspected
manipulation of oil and biofuel prices. A BP spokesman said the
FTC decided to close its investigation against the British oil major with no charges or fines. "On 1 October 2014, BP was informed by the FTC that it was closing its investigation. The
other investigations remain open, and there is no deadline for
the completion of the inquiries," BP said a release that included
its third-quarter earnings results. BP said it has received inquiries and requests for information from the Japanese Fair Trade
Commission, the Korean Fair Trade Commission, and the U.S.
Commodity Futures Trading Commission.
US regulator drops BP, Statoil oil price-fixing probe
PARIS, Oct 29 (Reuters) - The new head of Total will embark
on a tour to meet crucial contacts at oil-rich countries in the next
few weeks and will forge ahead with cost cuts in the face of the
falling oil prices that squeezed third-quarter profits.
Europe's second-largest oil company elevated former refining
head Patrick Pouyanne to the CEO position following the sudden death of its charismatic chief executive Christophe de Margerie earlier this month in a plane crash in Russia.
In a statement unveiling a 2 percent drop in net profit in the third
quarter on Wednesday, the new CEO said he would carry out
de Margerie's plan to reduce capital expenditure and operating
costs, aimed at returning more cash to shareholders. "The recent decrease in the price of Brent highlights the importance of
the programs we launched to reduce costs and control investments to strengthen the resilience of the group," Pouyanne said.
Qatar's Tasweeq to slash condensate exports in 2016
Petrobras may delay building two refineries due to costs
SINGAPORE, Oct 29 (Reuters) - Qatar's state oil marketer
Tasweeq expects to cut deodorised field condensate (DFC)
exports in 2016 by 30 percent from current levels as domestic
consumption increases after a new splitter comes online, a senior company official said.
Qatari condensate exports have already been facing competition from U.S. light oil shipments but its new 146,000 barrels-per
-day splitter, set to start up in late 2016, should help the Gulf
state soak up some of its DFC supplies at home.
Tasweeq will cut DFC exports to 350,000 barrels per day (bpd)
from the current levels of 500,000 bpd when the splitter is
ready, Ibrahim Al Sulaiti, marketing director of condensate at
Tasweeq, said at an industry conference on Wednesday.
Output of full-range naphtha will double with the start of the new
condensate splitter, Al Sulaiti said, part of which would then be
used as feedstock for new gasoline and aromatics units that are
set to come online in late 2017.
RIO DE JANEIRO, Oct 28 (Reuters) - Brazil's state-run oil company Petrobras may delay the construction of two refineries as
slowing demand growth for gasoline and diesel and high costs
make the projects uneconomic, a high-level company official
told Reuters on Tuesday.
Petroleo Brasileiro SA, as the company is formally known, is
expected to decide if it will move ahead with the 300,000-barrela-day, low-sulfur diesel refineries in Brazil's Maranhao and
Ceara states this year. It is leaning, though, towards a delay,
said the source, who was not authorized to speak to the media
and requested anonymity.
"The economic viability studies show that we have to tighten
cost, capital expenditures for the ventures," the source said.
"I don't want to say we won't build them. These refineries continue to be necessary, but not at the speed first intended."
The source did not specify how long the delay might be.
4
INSIDE U.S. OIL
October 29, 2014
MARKET NEWS (Continued)
Hess to proceed with $6 bln U.S. oil project despite price
dip
Drilling industry dip could last into 2016 – Maersk
STAVANGER, Norway, Oct 28 (Reuters) - The global offshore
oil rig market's downturn could last into 2016, longer than seen
a few months ago as a fall in oil prices exacerbates the dip, the
chief executive of Maersk Drilling said on Tuesday.
Rig rates have fallen sharply over the past year as energy firms
cut exploration spending. Rates for the most advanced ultradeepwater vessels dropped below $400,000 per day this year
from a peak of $650,000 per day last year.
"We see a slowdown that will last at least going into 2015 and
2016, but we have confidence in the medium to long term," said
Claus Hemmingsen, head of Maersk Drilling, a unit of Denmark's A.P. Moller-Maersk.
Maersk said on Monday that its new drillship, the Maersk Venturer, had secured a 45-day contract in Malaysia earning around
$378,000 a day.
"Definitely the day rates have taken a drop," Hemmingsen told
Reuters on Maersk's new jack-up rig for use in ultra-harsh environments.
The rig is about to start work on the Ivar Aasen field under a
$700 million contract with Norwegian oil company Det norske.
HOUSTON, Oct 28 (Reuters) - U.S. independent oil company
Hess Corp. said on Tuesday it would proceed with the development of the $6 billion Stampede project in the U.S. Gulf of Mexico, one of the biggest energy investments announced during
the current oil price slump.
Hess, the operator of the deepwater project, has a 25 percent
stake in Stampede. A unit of Chevron Corp, Norway's Statoil and Nexen Petroleum Offshore will also each hold a 25 percent stake.
Hess said first production from the project is expected in 2018.
By then, the market may well have recovered from a dip that
has cut the price of barrels by more than 20 percent since June
to around $80 each.
Total estimated recoverable resources for Stampede, located
about 115 miles (185 km) south of Fourchon, Louisiana, are
estimated in the range of 300 million to 350 million barrels of oil
equivalent.
Gross processing capacity for the Stampede project is some
80,000 barrels of oil per day.
REFINERY NEWS
Japan JX shuts condensate splitter over poor margins
TOKYO, Oct 29 (Reuters) - Japan's biggest refiner, JX Nippon Oil & Energy Corp, said on Wednesday it had shut its 35,000 barrels
per day condensate splitter at its Mizushima-B plant since Oct. 22, due to poor oil product margins.
"Condensate price remains high, and product margins have worsened," a company spokesman said, adding there was no schedule
for restart at the moment.
The company has decided to integrate its condensate refining operations with the firm's other splitter, the 63,500 bpd unit at its Kashima refinery, he added.
5
INSIDE U.S. OIL
October 29, 2014
BEYOND THE HEADLINES
ous friendship between the men. They barely look at each other
at public functions and are conspicuously silent about each
other. In a surprising commentary four years ago, Sechin criticised Gazprom for being too slow in Asia and said it should
raise its game. While the sanctions are unlikely to end the underlying tensions that have long defined Putin's small team of
advisers, they are concentrating minds, the businessman said.
With no access to funds from Western banks or companies,
those running the main state oil companies are bound even
closer to Putin as they hope to win money from some of Russia's rainy day funds.
INSIGHT-Sanctions bind Russia's energy elite to Putin
By Elizabeth Piper and Timothy Heritage
MOSCOW, Oct 29 (Reuters) - An offer by Gazprom to help rival
Rosneft salvage an Arctic oil project shows how tightly sanctions
have bound Russia's political and business elite together in the
Ukraine crisis - an unintended consequence of the West's punitive measures.
Some Gazprom executives now say this month's little noticed
proposal to loan Rosneft a drilling rig was "theoretical". It was
quietly made after U.S. sanctions put in doubt a project with
ExxonMobil to drill for oil in the Kara Sea.
The offer was certainly surprising. The relationship between the
two state run firms has long been strained. Most recently Gazprom, successor to the Soviet gas ministry, has been worried by
Rosneft's ambition to increase its gas output having become
Russia's biggest oil producer, borne out in an intensifying price
war for domestic gas consumers. The mere suggestion that
such rivals could cooperate to reduce the impact of sanctions is
one of the strongest signals yet of how, after seven months,
Western measures are having the opposite effect to the one
intended.
Far from dividing those closest to President Vladimir Putin, they
have forced the main players in the energy sector to rally behind
him. This circle has by necessity become more focused, Western and Russian businessmen, diplomats and politicians said.
"They are defiant," said a senior Western businessman who has
access to some of the business and political leaders targeted by
sanctions. He asked not to be identified because of the political
sensitivity of the subject. "The sanctions have brought consolidation and have made his inner circle only more dependent on
him." The influence of more liberal thinkers in the government
has been curtailed, sources close to decision-making say, including in the vital energy sector. The already small inner core
of decision-makers has shrunk even further.
"We underestimated the Russian reaction," said a Western envoy based in Moscow who spoke on condition of anonymity.
This envoy and some other Western diplomats say, however,
the U.S. and European Union sanctions have not had their full
impact yet. As evidence, they point to Russia's growing economic problems as the rouble slides and recession looms.
HITTING WHERE IT HURTS
A U.S. official who spoke on condition of anonymity in September said the U.S. and EU sanctions targeting delivery of oil technology, goods and services to Russia were intended to make it
all but impossible for Moscow to tap new oil sources.
The sanctions were the latest in a package of moves by the
United States and the EU over Russia's policies in Ukraine.
They also targeted those closest to Putin, labelled "Putin's cronies" by one senior U.S. official. These included Sechin, who
was subject to asset freezes and visa bans.
Washington and Brussels hoped to create rifts in Putin's inner
circle and persuade his allies to press for a change in policy
towards Ukraine, where Moscow has annexed the Crimea peninsula and backed separatists in the east.
Though the euphoria that rallied Russians behind Putin over
Crimea is expected to wear off, most in Putin's inner circle have
said they wear the badge of sanctions with pride.
For his part, Putin showed his contempt for the West and determination not to bow to sanctions in a speech on Friday, accusing Washington of putting the world order at risk.
In May, Sechin dismissed the sanctions imposed on him as
"theoretical" saying he did not have property or accounts in the
United States. But measures affecting exploration in the Arctic
and development of shale deposits have incensed him, several
gas executives have said. He believes politics should not be
mixed with business, said a source close to the Rosneft boss.
The fact the sanctions so clearly targeted the drilling project with
ExxonMobil in the Kara Sea was not lost on the Russian oilman.
After continuing work following earlier rounds of sanctions, the
round in September sent a clear message that Exxon must finally stop its work, said one U.S. lawyer who spoke on condition
of anonymity because of the sensitivity. The source close to
Sechin said Rosneft and Putin were determined "the show will
go on" to prove to the West they can drill for new oil without
U.S. or EU expertise. Russia's Energy Ministry was told "to do
anything to make it work", the source said, meaning that work
would continue on the Bazhenov shale deposits in west Siberia
and the offshore fields in the Arctic. Rosneft said it would continue drilling in the Kara Sea and it could develop 99 percent of
its tight (shale) oil reserves by itself "thanks to having the necessary expertise and technology, and also preferential tax treatment". Dmitry Peskov, Putin's spokesman, also said the sanctions could not stop drilling in the Arctic. "They may influence it
in a negative way, but they are unable to stop it."
NATIONAL CHAMPIONS
When the West took aim at Russia's energy producers, the
sanctions struck at the heart of Putin's economic powerbase.
Russia, the world’s largest energy exporter, relies on oil and gas
exports for about half its federal budget.
Even before coming to power, Putin had outlined his vision of
"national champions" - resource companies under the control of
the state - that could fund the reconstruction of Russia's military
and society after the chaos of the 1990s.Gazprom was already
in place, a Soviet-era monolith. Putin started installing a new
team at the company a year after coming to power in 2000. He
drafted in Dmitry Medvedev, now Russia's prime minister, and
Alexei Miller, now Gazprom's CEO. Putin also helped build Rosneft, mostly from Yukos, the oil firm that the courts seized from
Mikhail Khodorkovsky in 2003.Rosneft and Gazprom are both
headed by Putin allies - Miller at Gazprom and Igor Sechin at
Rosneft. Both men hail from St Petersburg, where Putin started
his political career after serving in the KGB. But there is no obvi-
ARCTIC AMBITIONS ON ICE
Even if the sanctions are lifted late this year or early next, Exxon
may not be able to resume work quickly in the Kara Sea be-
6
INSIDE U.S. OIL
October 29, 2014
BEYOND THE HEADLINES (Continued)
cause of the long lead times for getting contracts ready.
The company would need to start that process now - getting the
logistics in place - to be able to drill in the two/three-month window from August to October next year when the ice melts allowing Exxon to bring a rig in and also to drill.
Exxon declined to comment. Since winding down its operations
to comply with sanctions, Exxon has now towed the rig, called
West Alpha, away. According to satellite images, the rig returned to its yard in western Norway on Oct. 17.
Without a rig built to work in the freezing environment of the
Arctic, Putin's and Sechin's ambition of developing Arctic oil
reserves that could cost hundreds of billions of dollars would be
have to suspended. Enter Gazprom. Earlier this month, the
company was quoted as saying by Russian media that its Arkticheskaya rig could be used to continue drilling in the Kara Sea
next year if it was needed. Vsevolod Cherepanov, a member of
Gazprom's management board, later said there was a technical
possibility but that the rig was now working for Russia's second
largest oil producer Lukoil. Other Gazprom executives said they
could probably not spare it.Sechin avoided answering when
asked by Reuters whether Rosneft would take up the offer, but
said: "We will continue drilling in any case, on our own ... If partners take part - that's good, if they can't - we will carry on
alone."
asset-buying programme launched in April last year. The plan
aims to accelerate inflation to 2 percent in roughly two years to
pull the long-moribund economy out of two decades of deflation.
It is not expected to offer any hints of a near-term expansion of
its "quantitative and qualitative easing" (QQE), despite widespread expectations in financial markets that it will have to offer
more support to stimulate activity. The BOJ now forecasts consumer inflation of 1.3 percent in the current fiscal year and 1.9
percent in the following year, excluding the effect of the April
sales tax hike.Any cut in next fiscal year's forecast would be the
first since the BOJ announced QQE in early 2013. But it would
still leave the bank's forecast more optimistic than private analysts who, in a Reuters poll, expect inflation of only 1.3 percent.
POSITIVE CYCLE INTACT
The BOJ has stuck to its inflation forecasts even as gloomy
signs in the economy forced it to cut its GDP estimates.
The central bank is expected to justify its rosy price forecast by
arguing that companies, which saw profits rise thanks to Prime
Minister Shinzo Abe's stimulus policies, will boost capital spending and wages to lure employees in a tightening job market.
That will accelerate inflation as stronger consumption will allow
firms to pass on rising costs, BOJ officials say.
Indeed, the jobless rate has hit 3.5 percent, a level the BOJ
considers as near full employment, and the availability of jobs is
at its highest in 22 years. Big firms are raising salaries and bonuses, and a key BOJ survey showed they are keen to increase
capital spending. As long as a positive economic cycle remains
in place, in which companies and households continue to earn
more and keep spending, prices will gradually accelerate, the
BOJ says.
But growing risks to growth makes it tough for Kuroda to sell his
optimistic scenario. A sharp fall in global oil prices, which shed
25 percent since June, is seen nudging consumer inflation below 1 percent in coming months and prices may not accelerate
much until well into next year, some BOJ officials say.
That would contradict Kuroda's reassurances that inflation won't
fall below 1 percent due to improvements in the economy.
Data on Friday is likely to show annual core consumer inflation
slowed to 1.0 percent in September from 1.1 percent in August,
according to a Reuters poll. Pessimists on the board may thus
call for modifying the BOJ's language to say inflation will start to
accelerate in the first half of next year, rather than later this year
through early next year, sources say.
Kuroda, however, sounded unfazed on Tuesday, telling parliament that Japan's economy continues to recover moderately
and is on track to hit the bank's inflation target. Many BOJ officials also stress that falling oil prices are positive for the economy and prices in the long run, as consumers and companies
pay less for fuel and can spend more on other goods and services.As the semi-annual report serves as a basis for future
policy decisions, the BOJ board may also debate whether to
send a clearer message to markets that it intends to keep buying assets at the current pace next year.
But there is no consensus on the issue yet, making it likely any
decision will be put off until later this year.
The BOJ already buys most of the debt that the government
issues and last month began paying banks for the privilege of
lending them cash in a sign the central bank is reaching the
limits of its power to reflate the economy.
PREVIEW-Cheaper oil may prompt BOJ to cut near-term
price view but no change seen to inflation target
By Leika Kihara
TOKYO, Oct 28 (Reuters) - The Bank of Japan may trim its inflation forecasts on Friday and admit that slumping oil prices will
delay a pick-up in price growth by several months, but maintain
its view that inflation will hit its 2 percent target next year,
sources said.
The nine-member board may also debate whether to issue
clearer guidance on its asset-purchasing plan for 2015, though a
decision may be put off until later this year, the sources familiar
with the central bank's deliberations said. A slew of recent weak
data has cast doubt on the BOJ's rosy forecasts, keeping it under pressure to expand stimulus. Exports remain sluggish despite the boost from a weak yen and output has slumped as a
sales tax hike in April hurt consumption. The BOJ is thus likely
to roughly halve its 1 percent economic growth forecast for this
fiscal year ending in March in a twice-yearly outlook report to be
issued at Friday's rate review, sources have told Reuters. It may
slightly cut its inflation forecasts for the current fiscal year ending in March, and possibly the following year, reflecting sharp oil
price falls, say other officials familiar with its thinking.But any
downgrade will be minor and won't alter the BOJ's scenario that
inflation will reach its 2 percent target in the next fiscal year beginning in April 2015, the officials said.
"Core consumer inflation is moderating somewhat due largely to
declines in energy prices," BOJ Governor Haruhiko Kuroda told
parliament on Tuesday, acknowledging that the recent dramatic
fall in oil prices is weighing on Japanese prices.
"But after hovering around 1.0-1.50 percent for some time, consumer inflation will accelerate in the latter half of the current
fiscal year," he said. At Friday's meeting, the BOJ is expected to
keep its monetary settings unchanged and maintain its massive
7
INSIDE U.S. OIL
October 29, 2014
ANALYTIC CHARTS
Daily NYMEX Crude - 30 Min
Daily ICE Brent Crude - 30 Min
Daily ICE Gas Oil - 30 Min
Daily NYMEX RBOB Gasoline - 30 Min
Daily ICE Heating Oil - 30 Min
Daily NYMEX Heating Oil - 30 Min
(Inside U.S. Oil is compiled by Vikas Vasudeva in Bangalore)
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