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A week in oil: Saudi Arabia and China move the crude see-saw

Published: January 12, 2013 | 7:46 am
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The oil market has seen see-saw trading over recent days as crude prices peaked above $111, before dropping back.
On Thursday the rally was fuelled by reports that Saudi Arabia had cut oil output in November and December had pushed prices higher.
Prices then subsided following overnight commentary that Chinese inflation could impede its growth – and therefore put a ceiling on global oil demand.
In London trading Brent Crude future fell more than $1.40 a barrel to change hands just above $110 a barrel, while West Texas Intermediary dipped 70 cents to trade around the $93 a barrel marker.
In the equities market January is typically a time for investors to reflect on last year’s trades and look ahead for the potential winners and losers in the coming year.

London-based analysts of European bank Exane BNP Paribas reckon in 2013 the next ‘elephant’ oil discoveries are likely to be unearthed in four hot-spots

Analyst Alejandro Demichelis reckons three of these will be in Africa. He points to Kenya, Mauritania and Gabon as the hot-spots. While beyond Africa he also highlighted Guyane (or French Guiana) as another key frontier destination for exploration.
“Recent exploration efforts have only scratched the surface of these areas and we feel their full potential remains underappreciated,” the analyst said in a note today.
“The significant de-risking that has already taken place in Kenya and the Guyanas looks underestimated by the market. Mauritania and Gabon are the true wildcards.”


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