Oil tops $78 a barrel
Oil climbed above $78 on Thursday after strong Chinese growth data offset bearish sentiment following a World Bank outlook highlighting risks that the global economic recovery may run out of steam.
China’s annual gross domestic product growth accelerated in the fourth quarter to 10.7 percent from a revised 9.1 percent in the third, the National Bureau of Statistics (NBS) said on Thursday.
U.S. crude oil for March delivery, the new front-month contract after February expired on Wednesday, rose 30 cents to $78.04 a barrel by 0617 GMT (1:17 a.m. EST). Prices hit their lowest this year at $76.76 on Tuesday. London Brent crude rose 11 cents to $76.43 on Thursday.
“For all of this year we are going to have a big focus on China because it will be the main driver of demand,” said Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp.
“Because it is a command-style economy, things can change quickly. What was bullish could turn bearish if China puts on the brakes.”
World growth could falter as governments pull back some of the extraordinary liquidity they pumped into markets, the World Bank said on Wednesday.
A 4 trillion yuan ($585 billion) fiscal stimulus package was complemented by an unprecedented surge in lending by China’s predominantly state-owned banks, ensuring that the nation was the first major economy to recover decisively from the credit crunch.
But the government has signaled it will tighten credit this year, calling on banks to increase reserves and curb lending.
Industrial production increased 18.5 percent last month compared to expectations for a 20 percent jump.
The World Bank said in its annual Global Economic Prospects report for 2010 that the subdued recovery in the world economy, led by China and India, poses special risks for developing countries that might face stiffer borrowing costs, reduced credit and capital flows.
RECORD RUNS
On Chinese oil data, the country’s December crude runs, or the amount of crude processed by refiners, jumped 24.8 percent from a year earlier to a record 8.15 million barrels per day. For the whole year of 2009, runs posted an increase of 7.9 percent.
Soaring output from refineries has turned China into a sporadic oil-products exporter, boosting requirements of imported crude.
U.S. crude reached a 15-month high of $83.95 a barrel on January 11. “If the Chinese economy just goes boom, then we could go another step higher,” Nunan said. “For now, we still have too much inventory around and too much spare capacity.”
Prices are 47 percent below their July 2008 records near $150, but have almost doubled from lows near $32 reached by the end of that year.
“Prices dipped too low and recovered just from the fact that the world economy did not go into a full depression,” Nunan said.
“Now prices have already built in economic growth, but if we don’t see that, we are going to get a lot of turbulence in the oil market.”
U.S. INVENTORIES
In the U.S., an unexpected drop in crude stockpiles shown by an industry report had little impact on prices. The American Petroleum Institute (API) said inventories fell 1.8 million barrels last week against forecasts for a 2.4 million gain.
The nation’s distillate inventories, which include heating and diesel, dropped a larger-than-expected 3.4 million barrels. Supplies were forecast to have slid by 100,000 barrels, a Reuters survey showed.
Gasoline stocks rose 667,000 barrels, less than a forecast gain of 1.7 million barrels.
Inventory data from the government’s Energy Information Administration (EIA) will be published on Thursday at 1600 GMT. Both weekly reports were delayed by a day because of a U.S. holiday on Monday.
Source: Reuters
“We can no longer sit idly by and encourage the degradation of our forest resources and reserves through the activities of some unscrupulous people,” he said.
President Mills expressed concern at the fast-paced reduction of the nation’s forest cover, noting that from 8.2 million hectares in 1900, it has now shrunk to 1.6 million hectares due to illegal logging and chainsaw operations, farming, burning and construction.
President Mills said the recklessness has led not only to a huge loss of revenue to the State but had negatively affected the ecology and eco-system to the disadvantage of the nation’s development.
The Lands and Natural Resources Ministry and the Forestry Commission, he said, had been directed to collaborate with the Tourism Ministry to develop strategies to safeguard the nation’s tourist sites and river bodies for job creation.
The national security apparatus has also been instructed to deal with those ruining the reserves with impunity.
President Mills said a Security Committee is already in place to enforce the ban on the use of chainsaw, adding that he was confident that these measures would help to restore sanity and ensure sustainable management of the forest.
President Mills asked all related sector agencies, land owners, local communities, corporate entities and stakeholders to embrace and support the successful implementation of the programme for the benefit of both the present and future generations.
The programme, which is expected to create over 51,000 jobs, is designed to reduce the rate of deforestation and significantly bring down its effects on rural communities.
Under the programme degraded forest reserves and off reserve areas would be replanted to achieve sustainable resource base that would satisfy future demands for industrial timber and enhance environmental quality.
Funding for the programme would come from the Highly Indebted Poor Countries (HIPC) Funds; District Assemblies’ Common Fund; Plantations Fund Board and the Mineral Development Fund.
Alhaji Collins Dauda, Minister of Lands and Natural Resources, said trees to be planted under the programme would include both indigenous and exotic species and would be implemented in 100 Districts across the country.
Nana Wiafe Akenten, Omanhene of the Offinso Traditional Area, commended the Government for the programme, which he said would make the people to appreciate the need to ensure sustainable management of the forest.
Mr Kofi Opoku-Manu, Ashanti Regional Minister, said it was imperative to protect the flora and fauna of the Country in order to prevent further damage to the environment.
GNA