SPC   

SPC

I see this as technical rebounced.
Yesterday went as low as $8.05 and was sold low for the past few sessions.

 

Beri funny! Crude up SPC down. Overnight crude went down and SPC goes up. Hence I pray that Crude fall fall all the way to $60 lah...hahahaha!! Maybe crude goes up due to weak US$. SPC trade in US$ so price goes down when US$ is down?

 

Singapore Petroleum Company Limited has increased its shareholding in Cue Energy Resources Limited to approximately 10.02%. This brings SPC?s total shareholding in Cue Energy to 62,962,475 ordinary shares.

 

The high price on SPC was attributed to speculation and panicky. SPC will eventually adjust to below $7.50, by mid Nov 07, if there is no major Glober unstability issue within these few coming weeks.

 

I have observed the price of crude this past 2 weeks in relation to SPC share price. When the crude oil up, SPC share was down the next day. Now overnight crude lost $1.30 below $92, wonder SPC will go up or down tomorrow.

 

rebound today?

 

Will it fall below $6?

 

Looks likely to retreat to $7.80 before it can resume its upwards momentum. I think it is the high oil prices that has been keeping the share price from dropping below $8.00...Not too worry though, cos I think it is still the closest proxy in SGX related to oil industry.

 

Oil leaps to record over $93 on Mexico

Oil leapt to a record high for a third day on Monday, surpassing $93 as Mexico briefly halted one-fifth of its production and the U.S. dollar struck new lows.

U.S. light crude for December delivery, which hit a high of $93.20 a barrel earlier, was up 85 cents at $92.71 by 0735 GMT. London Brent crude, which hit a record high $90, was up 98 cents at $89.67.

Oil prices have soared by more than a third since mid-August as a stand-off between Turkey and Kurdish rebels, dollar weakness, easing interest rates and winter supply fears attracted a fresh wave of investment capital.

Prices rose on Monday after Mexico's state-owned oil company Pemex said it was shutting about 600,000 barrels per day (bpd) of oil output due to bad weather in the Gulf of Mexico and high terminal stocks, fanning concerns of a U.S. winter shortfall.

A spokesman said Pemex should be able to resume output "immediately" once the cold weather passed in two days. The country's three main export terminals were shut on Sunday.

The precautionary closure came days after a storm killed at least 21 oil workers, provoking a flurry of criticism against Pemex for its safety standards.

Gains accelerated mid-day amid unusually heavy trade of 16,000 lots on the U.S. front-month contract on Monday, with some traders pointing to short-covering by options players or technical stop levels around the $93 a barrel mark.

POLITICAL TENSIONS

After easing early last week, oil prices resumed their march toward the $100 mark after data showed a sharp drop in U.S. crude stocks, the U.S. dollar plumbed new lows and tension mounted between Turkey and Kurds in northern Iraq.

"There remain concerns that oil market conditions are tightening and geopolitical tensions are also continuing to add a premium to oil prices," said David Moore, a commodities analyst at the Commonwealth Bank of Australia.

The dollar hit another record low against a basket of currencies on Monday on expectations that the Federal Reserve will trim interest rates this week and possibly again this year.

Turkey's foreign minister Ali Babacan, speaking on Sunday after talks aimed at averting a Turkish incursion into Iraq, said diplomatic and military operations could both be used in the country's fight against Kurdish guerrillas.

Turkish troops killed 20 Kurdish guerrillas on Sunday in a major operation against separatist rebels in eastern Turkey, army sources said.

The attacks have sparked worries of supply disruptions from northern Iraq and heightened fears of wider regional fallout if Turkey follows through with threats to launch attacks inside northern Iraq if necessary.

The abduction of foreign oil workers in Nigeria on Friday that forced ENI (ENI.MI: Quote, Profile, Research) unit Saipem and SBM Offshore (SBMO.AS: Quote, Profile, Research) to cut production by 50,000 barrels per day (bpd) also reignited fears of tighter winter supplies.

Attacks by militant group Movement for the Emancipation of the Niger Delta (MEND) had already cut Nigerian output by a fifth since early last year and forced thousands of foreigners to flee the vast wetlands region in southern Nigeria.

Despite the surge in oil prices, OPEC has shrugged off calls from importer nations to raise output, saying politics and speculation -- not a supply shortfall -- are to blame.

Iran's oil minister said on Saturday that world oil markets were well supplied, with petroleum inventories above average, reiterating suggestions earlier this week that the Organization of the Petroleum Exporting Countries (OPEC) is not likely to raise output to calm markets.

U.S. Vice President Dick Cheney also ruled out tapping the nation's oil reserve to rein in prices.

 

Today, I jeep many many. Expect a rebound soon. Cheers.

 

Oil hits record above $92 on weak dollar, Nigeria

Oil prices shot to an all-time high above $92 a barrel on Friday as the tumbling dollar and Nigerian output disruptions helped extend a rally that has lifted prices nearly 30 percent since August.

Worries that supplies may come up short ahead of the Northern Hemisphere winter have fueled the rise, drawing a fresh wave of speculative money from investors.

U.S. crude settled up $1.40 at $91.86 a barrel, off the record $92.22 struck during electronic trading earlier.

Oil was closing in on its inflation-adjusted high of $101.70 seen over the course of April 1980, a year after the Iranian revolution and at the start of the Iran-Iraq war.

London Brent gained $1.21 to $88.69 a barrel.

"Fresh highs are now attracting fresh buying, especially following yesterday's violation of the futures highs just above the $90 level," said Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois.

Prices jumped past $90 a barrel after a U.S. government report on Wednesday showed a sharp drop in crude stocks in the world's biggest energy consumer.

Oil got a boost on Friday after a rebel attack on a oil rig in OPEC-member Nigeria operated by Italian firm ENI shut 50,000 barrels per day of production.

Traders were also eyeing new U.S. sanctions against Iran, the No. 4 oil exporter, which is at odds with the U.N. Security Council over its nuclear program. Washington accuses Tehran's Revolutionary Guard of spreading weapons of mass destruction.

TUMBLING DOLLAR

Unprecedented weakness in the U.S. dollar has been another factor supporting dollar-denominated commodities.

In anticipation that the U.S. Federal Reserve may cut interest rates next week, the dollar hit record lows against the euro and a basket of currencies Friday.

Moves by central banks to cut interest rates and pump billions of dollars into financial markets to ease a credit crunch have added fuel to oil's rally.

Oil's drive to record highs has stirred concern from consumer governments, and the administration of President George W. Bush said Friday oil prices were "way too high."

But U.S. Vice President Dick Cheney said the nation's strategic oil stockpiles would not be used to reign in prices.

Analysts say the wider economic problems may be dragging down demand in the giant U.S. market, while there are some signs of a growth slowdown in China, the world's second largest consumer.

China's apparent oil demand grew at the slowest rate in 20 months in September, up just 0.3 percent from a year earlier.

Despite worries from big oil importers, members of the Organization of Petroleum Exporting Countries have said they are unlikely to hike production at a meeting next month in Saudi Arabia.

The cartel has agreed to increase output by 500,000 barrels per day starting November 1, and members insist prices are not being driven by a supply shortfall.

Data from Lloyd's Marine Intelligence Unit showed OPEC's oil exports, excluding Angola, jumped 1 million bpd in the first two weeks of October versus the last two weeks of September.

 

Ah I forgot, you have a day job.  Makes sense to me then.

 

no $$ for swing liao. My investment is less than 100K only. SPC had cost me quite a bit already. I went for those counters that make fast and die fast one. 3 days is enough plus 2 days settlement. Decided on SPC bcos I very tired already. Glued to the screen the whole day and affected my day job. Projects coming in soon, so might not have the luxury of time to monitor. Those who wish to punt, wish them luck. We can't make all the $$ here. Day job can also reward us handsomely if do well.

 

If you have an eye for swing trading on those high volume and volatile stocks you should allocate some capital to it.

The rest of it can be on stocks with good fundamentals such as SPC in which you will only buy when the intrinic value is cheap and fundamentals remain unchange.

Reap the best of both world.

 

My "L" stands for Laosai lately...hehehe! I dun need L now for I dun punt now. Stay with SPC, and Luunnnn...hehehehe (another of my "L")! Cheers

 

Merrill Lynch  Stronger than expected result; upgrading to Neutral

Ex one-off items, 9M07 profit up 27% YoY

SPC reported a strong 3Q NPAT of $99.8mn, up over threefold versus 3Q06 on the back of $2.24bn in revenue which was flat YoY. On a nine-month basis, the company reported NPAT of $391mn, up 73% YoY ? however if we adjust for oneoff items (as shown in Table 1), recurring NPAT was up by a smaller 27%. This is borne out by timing gains as evidenced by high inventories as well as cashflow for 9M07 that was flat versus the previous corresponding period.

Increasing estimates and NPV

We have upgraded our profit forecasts by between 21-26% for 2007-2009E on the back of slightly higher refining margin forecasts, better earnings contribution from associates and JVs, and a lower tax rate. This has resulted in an upgrade to our NPV from $7.36/share previously to $7.67/share (+4.2%).

Upgrading to Neutral

We have taken the opportunity to raise our rating on SPC from Sell to Neutral. Given our concerns regarding the direction of refining margins, which could be negatively affected by warmer weather in the next few months, we are not more constructive on the shares. The share price should remain well supported by its dividend, which at our new NPV of $7.67 would yield 6.5% for 2007 ? this should protect any downside risk. Higher than expected oil prices may also positively impact earnings due to startup of new oilfields in the past 2-3 months.

3Q results analysis

SPC reported a strong 3Q net income of $99.8mn, up over threefold versus 3Q06 on the back of $2.24bn in revenue which was flat YoY. On a nine-month basis, the company reported net income of $391mn, up 73% YoY ? however if we adjust for one-off items (as shown in Table 1), net profit was up by a smaller 27%. This is borne out by timing gains as evidenced by high inventories as well as cashflow for 9M07 that was flat versus the previous corresponding period.

Sequentially, the company reported weaker results as expected given that refining margins deteriorated. According to SPC, it realised a refining margin of US$5/bbl for 3Q, down 25% QoQ versus Merrill Lynch?s Singapore complex margin which fell 13% QoQ.

U pgrading profit estimates

We have upgraded our profit forecasts by between 21-26% for 2007-2009E on the back of slightly higher refining margin forecasts, better earnings contribution from associates and JVs, and a lower tax rate. This has resulted in an upgrade to our NPV from $7.36/share previously to $7.67/share (+4.2%).

Raising recommendation from Sell to Neutral

We have taken the opportunity to raise our rating on SPC from Sell to Neutral as we feel that the risks are balanced at the present time. We are not more positive on the shares as we believe that there still remains downside risk to refining margins in the near term. Weather, as always, will play a key determinant as a late winter may cause refining margins to retrace. The share price should remain well supported by its dividend, which at our new NPV of $7.67 would yield 6.5% for 2007 ? this should protect any downside risk.

On the operational front, SPC will have significantly more oil production by year end (from Oyong which commenced production in late September as well as the new Bohai Bay blocks) which could see earnings upgrades come through should oil prices stay high. This could be the impetus for short term share price performance.

 

idesa168,

nicky has the backing of DBS for its TP you know. *wink*  You may need to kickstart your L again.

 

You mean the US$ weakening vs the high Oil Price?  I will be surprise if most didnt noticed the co-relationship recently. You know for other commodities, other then the seasoning factors and cycle, its also the same, we typically look at the currency its using to trade so when analysts said that fundamentally there is no reason why oil price should be so high and thus focused on storm and etc, we acknowlegde it was the weak dollar.  I am also surprise no one in CNBC mentioned the weak dollar when they talk about oil price sky rocketing. 

$90USD now.. its no fun for us consumer.  Will OPEC allow countries to use gold to trade for oil?

 

Just hold, can't be too far wrong. Nick cannot move it...hehehe! I am awaiting for $10.00.

 

Yes, and its very relevant to the question nickyng asked yesterday.