Oil at new record near US$121

Oil stood firm today afer setting a new record of almost $121 a barrel, the latest spurt in an advance that has seen prices double over the past 12 months.

Supply disruptions in Nigeria, where a strike and attacks by militants has hit production, has supported a market that is nervous about any threats to supply.

Tensions with Iran racheted higher when Tehran refused to accept inspections of its nuclear programme.

US light crude for June delivery was up 7 cents at $120.04 a barrel, by 1155 GMT after earlier touching a record high of $120.93.

London Brent crude was up 33 cents at $118.32 a barrel, after an earlier record of $119.07.
"The downward move in oil last week now seems like only a correction," Christopher Bellew, senior vice president at Bache Commodities, told Reuters.

"The effect of the credit crisis in the US is reducing people's disposable incomes and you'd expect this to have an impact on the oil price, but it's not having any impact."

Demand from emerging markets such as India and China is more than compensating for the US downturn, he added.

Goldman Sachs predicted oil could soar towards $150 to $200 a barrel because of a lack of adequate supply growth.

"The possibility of $150 to $200 per barrel seems increasingly likely over the next six to 24 months, though predicting the ultimate peak in oil prices as well as the remaining duration of the upcycle remains a major uncertainty," the bank said.

The US investment bank had predicted back in 2005 that oil was entering a "super-spike" period.

Oil prices further into the future have also risen sharply, with prices out to 2016 above $110 a barrel..

Meanwhile, ExxonMobil said today it had returned oil output in Nigeria to normal levels after an eight-day strike, but Shell said its production there was still down by about 164,000 barrels per day due to recent militant attacks.

"A lot of this is supply-driven, with the market very vulnerable to any disruption in supplies," Mark Pervan, a senior commodities analyst at the ANZ Bank told the news agency.
"We're seeing large oil-producing countries coming up as a question mark," he said.
US President George W. Bush is expected to talk with officials from Saudi Arabia about the effects of high fuel prices on the US economy on his trip to the world's top exporter later this month.

Bush has called on Opec to raise output to help bring down prices.

The US dollar, whose decline in the past months has been driving speculative investments in dollar-denominated crude and other commodities, slipped further today on continued doubts about the health of the US economy despite upside surprises from recent economic indicators.
Tomorrow traders will watch the weekly US government report on fuel inventories, which is expected to show a 1.8 million-barrel build in crude stocks, a 1.1 million-barrel rise in distillate inventories and a 100,000-barrel fall in gasoline stocks.

DJI break 68.1% of

DJI broke 68.1% of Fibonacci retracement line. It means rebound and go further timeing is coming. Time to entry the marktet.

rnz integrated (m) sdn bhd

THE road to success has been much longer and bumpier than its founders anticipated, but oil and gas consultancy RNZ Integrated (M) Sdn Bhd has proven that one need not depend on big corporations to succeed.

Managing director Rozali Ahmad said that unlike some of its peers in the oil and gas business, RNZ started operations with full local capabilities.

“We started from scratch,” he told Business Times.

Rozali, who owns two-thirds of the company, established the group in 1993 with Zulkfley Mansor and Suhaimi Deraman with a start-up capital of RM100,000.
Today, the company has a staff strength of 500 qualified technical personnel, including 50 expatriate eng ineers.

It sees its order book swelling to RM200 million from the current RM150 million as it tenders for projects worth RM200 million.

“So far, we have design jobs at hand of about RM150 million that will last us for a year. On top of that, we are actively tendering for RM300 million worth of jobs, of which 40 per cent are targeted from the overseas market,” Rozali said.

“Based on previous success rate of around 25 per cent, we anticipate that we will be able to top up our order book to RM200 million soon,” he added.

About 60 per cent of RNZ’s ongoing jobs consist of umbrella service contracts with Petronas Carigali Sdn Bhd, Talisman Malaysia Ltd and Murphy Sarawak Oil Co Ltd.

“We have designed a sour gas facility for Petronas Carigali at Tangga Barat Cluster project,” Rozali said.

“We have also designed the first ultra-deep pressured and heat-resistant gas well facilities in the Kinabalu field,” he added.

Overseas, RNZ, jointly with Sime Darby Engineering Sdn Bhd, has to design BE process and BG utility platforms in Qatar waters.

The company has also secured design work for Topaz Development offshore Vietnam and Phase 1 Development of JDA Block B17 fields in Malaysian and Thai waters.

With a high-potential development in deepwater oil and gas project, RNZ moved its strategy to be in line with national oil company Petroliam Nasional Bhd’s (Petronas) objectives to develop local expertise.

“We are partnering France-based deepwater consultant Doris Engineering ,” Rozali said.

“In supporting Petronas’ vision of making Malaysia the regional hub for deepwater centres, we have forged ahead to gain and share the expertise with Doris,” he added.

Considered as the third largest oil and gas consultant after Technip Geoproduction (M) Sdn Bhd and Ranhill Worley Sdn Bhd, RNZ is a 100 per cent Bumiputera company, licensed by Petronas to undertake all design services projects.

RNZ is planning for a listing in the near future.

“By then, we would also want to diversify our business to related oil and gas industries such as manufacturing of one complete process systems,” Rozali said

(adapted from Btimes)

KLCI Rebound

13 Febraury 2008, KLCI's RSI shown signal of rebound. Parliment was dissolved today.

DJI Rebound

On 31-1-2008, MACD and RSI of DJI's daily chart shown rebound signal. This is time to entry market.

2008 KLCI TARGET TO TOP 1,650!

2008 target @1,650 with baseline target @1,520. Based on our model, we have ascribed 1,650 points as our target for 2008, translating to a market price earnings ratio (PER) of 17x. From a bottom-up approach, our target is set at 1,520 or at mar ket PER of 15.6x, which also forms our baseline target for 2008. We believe our target is tangible given that the TMT (Tenaga Nasional Bhd, Malayan Banking Bhd and Telekom Malaysia Bhd), which have grossly underperformed the CI in 2007, is likely to support the uptrend of the market.

These counters collectively account for about 16% of the CI's total market cap and are at present bogged down by their respective niggling doubts, but should these uncertainties be alleviated, we reck on buying interests should flow back into these stocks. See table for a scenario whereby 1,650 points may be achieved.

(Source: OSK Research)

TA: Relative Strength Index (RSI)

The Relative Strength Index (RSI) is an extremely useful and popular momentum oscillator. The RSI compares the magnitude of a stock's recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100.

Calculation

Overbought/Oversold
Wilder recommended using 70 and 30 and overbought and oversold levels respectively. Generally, if the RSI rises above 30 it is considered bullish for the underlying stock. Conversely, if the RSI falls below 70, it is a bearish signal. Some traders identify the long-term trend and then use extreme readings for entry points. If the long-term trend is bullish, then oversold readings could mark potential entry points.

Divergence
Buy and sell signals can also be generated by looking for positive and negative divergence between the RSI and the underlying stock. For example, consider a falling stock whose RSI rises from a low point of (for example) 15 back up to say, 55. Because of how the RSI is constructed, the underlying stock will often reverse its direction soon after such a divergence. As in that example, divergences that occur after an overbought or oversold reading usually provide more reliable signals.

Centerline Crossover
The centerline for RSI is 50. Readings above and below can give the indicator a bullish or bearish tilt. On the whole, a reading above 50 indicates that average gains are higher than average losses and a reading below 50 indicates that losses are winning the battle. Some traders look for a move above 50 to confirm bullish signals or a move below 50 to confirm bearish signals.


Example:


The DJI example shows a number of extreme readings as well as a negative divergence. In Mar-2007, RSI reached oversold for a brief moment to mark the low around 25. The next extreme reading (overbought) occurred after April and continue sustain above level 70 until June. Then it was moving sideway after a large advance that peaked in July-2007. The next positive divergence reading occurred in August. for another brief moment and marked the low around 35. In early of September, RSI moved back above 50 and into overbought territory in October. A negative divergence formed in first week of October and marked the high in the upper fifties. Then it moved down to level 30.

Bursa may tie up with CME

The world's largest and most diverse financial exchange, the Chicago Mercantile Exchange (CME) may buy a 10% stake in Bursa Malaysia. Both exchanges are in talks to form a tie up that will involve the trading of CPO derivatives on CME.

The deal is currently being thrashed out by the relevant parties and is likely to be announced close to Christmas. The price tag for the sale, says a source, is within the RM20 per share range. (The counter closed Friday at RM14.20).

Government agencies or institutions own about 38% interest in Bursa Malaysia. The Minister of Finance Inc and the Employees Provident Fund has own 19% and 3% respectively in the local exchange. Noteworthy and as an analyst points out, Bursa Malaysia has a high foreign shareholding of 40%.

Earlier, CME had a 50-50 joint venture with Singapore Exchange (SGX) to list commodity futures on a Singapore-based platform called Jade. However, in the middle of November this year, the CME group abandoned the project, selling its stake in the venture to the core owner SGX. The partnership has been terminated, which opened the door for talks between CME and Bursa Malaysia.

Other exchange like Dubai International Financial Exchange (DIFX), Dalian Commodity Exchange (DCE) (already tie up with Bursa to trade CPO in Dalian), and Euronext are keen to cooperate with Bursa.