Government debt prices fell as U.S Treasuries retreated on the prospect of $63 billion in new supply this week and shorter-dated euro zone bonds slipped ahead of 8 billion euros worth of two-year paper from Germany on Wednesday.

Crude oil rose above $47 a barrel at one point after renewed buying on speculation the Organization of Petroleum Exporting Countries may cut production again at its meeting on Sunday in Vienna.

Equity markets in Europe and the United States were choppy as higher energy prices pulled up oil shares while U.S. bank shares rose on optimism that Washington will provide more clarity on government plans to shore up the U.S. banking system.

U.S. Federal Reserve Chairman Ben Bernanke was attending a meeting on the economy with President Barack Obama, the White House said.

But in Europe, financials took the most points off the FTSEurofirst 300 index of top European shares as investors continued to flee the financial sector following news of further government stake-building, fanning worries about the stability of Britain’s banks.

Growing fears about the ailing U.S. automakers and banking drove interbank U.S. dollar borrowing costs up.

In Asia, Japan’s Nikkei average closed at a 26-year low, finishing down 1.2 percent, and other Asian markets slipped on worries about the fate of General Motors and U.S. banks.

“The dollar seems to be the only safe haven left right now, with both the yen and Swiss franc under pressure,” said Robert Blake, senior currency strategist at State Street in Boston.

“We’re certainly in risk aversion mode and the trade right now is to buy dollars, which to a large extent reflects huge repatriation flows to the United States.”

Currencies have tracked equity markets’ performance over the last few weeks, with the dollar tending to benefit when stocks fall as investors seek shelter amid fears of a collapse of banking systems worldwide.

The dollar was up against a basket of major trading-partner currencies, with the U.S. Dollar Index up 0.53 percent.

The euro fell 0.12 percent at $1.2625, while against the yen, the dollar rose 0.50 percent at 98.86.

With the outlook so dim, Barclays cut its year-end target for the S&P 500 to 760, saying the probability of the benchmark U.S. stock index hitting an initial 875 was much lower now.

After 1 p.m., the Dow Jones industrial average was down 62.76 points, or 0.95 percent, at 6,564.18. The Standard & Poor’s 500 Index was down 4.35 points, or 0.64 percent, at 679.03. The Nasdaq Composite Index was down 18.56 points, or 1.43 percent, at 1,275.29.

The biggest drag on the Dow was Merck & Co Inc after its proposed $41 billion takeover of Schering-Plough raised concerns about the depth and breadth of the recession as it hurts such defensive sectors as drugmakers, analysts said.

“This deal was done in a declining environment for both companies,” said Arthur Hogan, chief market analyst at Jefferies & Co in Boston.

The FTSEurofirst 300 index of top European shares closed down 0.7 percent at 657.30 points.

The benchmark 10-year U.S. Treasury note fell 6/32 in price to yield 2.90 percent. The 2-year U.S. Treasury note fell 3/32 in price to yield 0.99 percent.

U.S. light sweet crude oil rose 94 cents to $46.46 a barrel.

OPEC Secretary-General Abdullah al-Badri said the 12-member producer group would consider reducing output again at its meeting on Sunday as it tries to counter downward pressure on oil prices from falling demand.

“All options are on the table,” he told reporters in Qatar when asked if OPEC, which pumps more than one-third of the world’s oil, would announce another reduction in supply at its meeting in Vienna.

Spot gold prices fell $18.90 to $917.65 an ounce.

March 9 (Reuters)

Well… Our Fantastico Friday was interrupted by that horrific Jobs Jamboree number that printed Friday morning… 651K jobs were lost in February, which let me remind you is a couple of days shorter than other months. So, it could have been worse! Hard to believe that could be the case, but it’s true. The unemployment rate rose to 8.1%, from 7.6% in January. The jobless rate is the highest since 1983. The economy has now shed 4.4 million jobs since the recession began in December 2007, with almost half of those losses occurring in the last three months alone.

Remember a year ago, when I kept harping that we had entered a recession, but the NBER hadn’t announced one yet, nor were the Un-dynamic duo of Paulson and Bernanke agreeing with me, as they kept denying what was right in front of them, for if little old me, could see that we had entered a recession, then why couldn’t these two? Oh, well, we now know that the recession began in December 2007… And now we know that 4.4 million jobs have been lost since that time. Of course if the Bureau of Labor Statistics (BLS) didn’t add jobs throughout the year that didn’t exist, we would be even more worse, so I don’t know whether to thank the BLS or curse them…

One thing to not let slip by you, is the fact that the previous months’ totals of -577K and -598K were revised upward by large amounts to -681K and -655K respectively… So, you’ve now got to ask yourself if the Feb figure will be revised to -700K… Of course it’s my opinion that the BLS would never dare print that figure on a first run printing, but only as a revision, that can be swept under the rug.

So… The currencies reacted a bit differently on Friday than we had seen recently when bad news printed in the U.S. Recall, that the Trading Theme that rewarded the dollar, whenever bad economic data printed, had held a grip on the markets for some time… But Friday morning, I mentioned that the trading looked different, with no Trading Theme in place, and that carried on even after the Jobs data printed.

The euro was stronger for most of the day on Friday, but as I left the office at the end of the day, it was beginning to look a little worn around the edges, and as I turn the currency screens on this morning, I see that the single unit has given back some ground.

I got a kick out a story that a reader sent me over the weekend… It was a story that appeared on the Bloomie regarding rate cuts… I told him, “yes, this is the stuff I keep harping on about how it’s not the cost of the credit that keeps banks from making loans, so why keep cutting interest rates?” So… Here’s a snippet of the report so you can see what it is that I’m talking about…

“European Central Bank Executive Board member Juergen Stark said cutting interest rates won’t remedy the financial crisis and pushing them too low may backfire. The financial crisis can’t be solved with rate cuts, Stark said in an interview to be published in Luxembourg’s Tageblatt newspaper on March 9. Too low a rate level can even be counter-productive.”

Hmmm… Finaly a Central Banker with the intestinal fortitude to stand up and say the right thing! Of course, that didn’t stop the European Central Bank (ECB) from cutting 50 BPS last week! UGH!

Recall last week I was talking about how fundamentally speaking, Australia was looking healthier than other countries, but then they posted a contraction in their GDP the next day… Some egg on my face with that one, but Hey! I still think they are poised to pull out of this global financil meltdown on the fast track. Apparently, I’m not the only person that thinks that… Derivatives show that the worst is over for the Aussie dollar… And the Royal Bank of Canada (RBC) is telling their customers to buy the Aussie dollar VS Canadian dollars / loonies… I read that this morning, you don’t think I make this stuff up do you? It was there in on the screen…

I mentioned to Chris Gaffney last week, that I had been seeing more yen selling coming across the trading desk than I had seen in a long time. I said that these people, if they had held it long enough, were probably taking profits. And why not? In this day an age with deflationary pricing pushing most assets downward, when you see a profit, you take it!

The guy known as “Mr. Yen”, Sakakibara, told the press last night that he believed yen may rise to a record 70 VS the dollar… WOW! He also said that it would range trade between 100 and 70… He believes that the yen will be afforded the same kind of love the dollar has received since the financial crisis began in the U.S. With Japan posting a large economic contraction last week, Mr. Yen, is of the opinion that it will help the currency gain to 70.

Hmmm… I just don’t know about all that… For one, I’m not convinced the flight to safety that has underpinned the dollar with buying of Treasuries, will be duplicated in Japan… And two… The only thing I saw pushing the yen stronger in 2008 was the unwinding of the Carry Trade, which I said had come to end about a month ago. So… There you have it… I don’t like yen’s chances to go to 70, but do agree that it could hold 100… It’s darn close to 99 as I type…

Recall last week I told you about my neighbor that stopped me in the driveway and was all concerned about what he had heard on the radio that day, regarding the FDIC going broke… I said then, not to worry about it, as the Fed will print more money and keep the FDIC from failing… If they kept AIG from failing, they certainly would do the same with the FDIC… Well, on Friday I saw this… “the FDIC wants a permanent increase in its line of credit with the Treasury Department to $100 billion from the current $30 billion. FDIC Chairwoman, Sheila Bair told key lawmakers in letters Thursday that such an increase “would leave no doubt that the FDIC will have the resources necessary to address future contingencies and seamlessly fulfill the government’s commitment to protect insured depositors against loss.”

OK… I told you on Friday morning about Gold’s rebound to $940, but it failed to add to that figure even after the horrific jobs data. I guess you would have to say that Gold traders had “priced in the jobs data already”, eh? Gold is off by about $4 this morning, as it gets pulled down by a report regarding global inflation… The Economic Cycle Research institute assesses that U.S. inflation pressures are at their lowest since 1958, and likely to decline further…

But for every report attempting to pull Gold down, there’s one attempting to push it higher… What I’m talking about here is the report that our friends, NOT! At OPEC are going to maintain their 13% cuts in production put in place since September 2008. They may consider more cuts. Oil is trading higher this morning at almost $47, and oil traders believe it will be back to $50 within two months…

Quietly making noise for the past 3 months has been the Brazilian real… The real has gained 4% in the past 3 months, as investors around the world look for yield… And Brazil’s interest rates have had the allure of the Sea Hag’s song to Pop-Eye! But… There’s word out of Brazil that the Central Bank will look to cut rates by 100 BPS / 1% when they meet, later this week. That’s too bad, but Shoot Rudy, Brazil’s rates will still remain higher than you can get in most ports of call… And… Their GDP will be positive…. And… If traders and investors reward the real for cutting rates aggressively like they did over currencies, then the real has nothing to worry about, eh?

OK… So, for the past month I’ve given you my ideas for the countries / currencies that could be on the fast track to recovery, given their ability to remain off the rosters of countries with failing banks. Norway leads the pack, with Canada, and Australia close behind… I even told you about how Paul Volcker thought we should shift to the way Canadian Banks operate. Well… It’s always nice to see someone else follow up on my ideas, not that they read the Pfennig and said, “Hey! Let’s write about what Chuck wrote about”… Nah… That wouldn’t happen… HA! But, seriously, BNP Paribas’ research team has issued a report advising their clients to buy… You guessed it… Norway, Canada and Australia…

BNP said, “we remain friendly on commodity currencies like Norway, Canada, and Australia, and view today’s oil price rally as an indication for other commodities to follow. We are bullish on the Canadian dollar, Norwegian krone, and Australian dollar, but unlike last week we like trading these currencies long against the dollar.”

So… There you go! It’s not just me!

There is no scheduled data to print today, but the rest of the week is chock-full-0-data. On Wednesday, when I board a plane to Florida, we’ll see the Monthly Budget Deficit… That should be a doozy! On Thursday, we get the usual Weekly Initial Jobless Claims, and Retail Sales for Feb… I can tell you right now, that the BHI (Butler Household Index) tells me this report for Retail Sales is going to be very disappointing! Friday the 13th, we’ll see the Trade Deficit, Import Prices, and U. of Michigan Confidence. There are other 2nd Tier reports sprinkled in all week…

I really do think that the Retail Sales for Feb, is going to be bad… And that may weigh on the dollar, that is, if the Trading Theme keeps to the back of the room!

OK, as I head to the Big Finish, I see the euro has lost more ground than when I first came in… It just can’t stand prosperity!

Currencies today 3/9/09: A$ .6360, kiwi .4980, C$ .7735, euro 1.2590, sterling 1.3890, Swiss .8595, rand 10.5930, krone 7.1125, SEK 9.2050, forint 247.90, zloty 3.77, koruna 22.02, yen 99.15, sing 1.5515, HKD 7.7550, INR 51.88, China 6.8410, pesos 15.28, BRL 2.3750, dollar index 89.20, Oil $46.74, Silver $13.22, and Gold… $937.90

Source: A Horrific Jobs Report!

Oil prices had surged nearly 9 percent in the previous session due to a surprise drop in U.S. crude stocks, which may indicate a recovery in demand in the top energy consumer.

But data showing euro zone gross domestic product (GDP) fell by a record 1.5 percent in the last quarter of 2008, as exports and household demand collapsed, forced traders to refocus on falling global consumption.

“The economic outlook is still pretty grim and I don’t think these bits of bullish data are enough to counteract this in the short-term,” Christopher Bellew at Bache Commodities said.

U.S. crude slipped $1.51 to $43.87 a barrel by 1224 GMT, after earlier hitting a month high of $45.70, while London Brent crude fell $1.63 to $44.49.

Oil prices gained some support from remarks by China’s Premier Wen Jiabao on Thursday that the No. 2 oil consumer would achieve 8 percent growth this year — a level considered key to maintain employment growth — despite the deepening global recession.

China’s gauge of the health of its manufacturing sector, the purchasing managers’ index (PMI), gained for the third month in a row in February, suggesting the domestic economy, and oil demand, could be recovering.

The U.S. Energy Information Administration said crude stocks declined by 700,000 barrels last week, while gasoline demand rose 2.2 percent from a year ago, as lower prices boosted consumption.

Traders were also eyeing the release of a raft of economic data in the U.S., including jobless benefit claims and January factory orders, for clues on the health of the world’s largest economy.

TO CUT OR NOT TO CUT?

Oil prices have traded in a narrow band near $40 since mid-December, caught between slumping demand and the possibilty of further OPEC output cuts when the group meets on March 15.

“The market is still rangebound as any bullish news has been kept in check by the global economic meltdown,” Bank of Ireland analyst Paul Harris said.

“But the next OPEC meeting is coming into focus, and they will probably have to act to convince the market they are really serious about continuing to restrict production.”

OPEC planned to lower oil output by 4.2 million barrels per day from production levels in September, in a bid to boost falling prices, and a Reuters survey found OPEC members had already met at least 81 percent of their target.

Angola, which currently holds the presidency of the 12-member group, will not advocate further production cuts when the group meets on March 15 in Vienna, OPEC sources said on Wednesday.

But Venezuela, Algeria and Libya have raised the possibility of a further cut.

March 5 (Reuters)

Oil jumped more than 3 percent on Tuesday as winter weather blasted the United States amid signs OPEC has tightened supplies.

Further support came as the U.S. February crude contract headed for expiry at the end of the trading session.

U.S. February crude rose $1.25 to $37.76 a barrel by 12:52 EST (1752 GMT), while March crude fell 76 cents to $41.81 a barrel. London Brent gained 34 cents to trade at $44.84 a barrel.

“There’s a short-squeeze play going on ahead of February crude’s expiration, as there are still some traders heavy with shorts on this last trading day for the contract,” said Phil Flynn, analyst, Alaron Trading, Chicago.

“The market is also filling the gap between the February and March contract, one activity which we saw in the last two contract expirations and so we are seeing a narrowing of the Feb/March contract.”

Slumping demand in the United States and Europe has helped send crude prices down from record highs over $147 a barrel struck in July, prompting producer group OPEC to agree to a series of output cuts aimed at balancing the market and supporting prices.

Kuwait has informed all customers of cuts in oil supply in line with OPEC’s December decision to reduce supply, state oil company Kuwait Petroleum Corporation said.

New OPEC President, Botelho de Vasconcelos, told Reuters the group was fully enforcing its deepest ever oil supply curbs, adding OPEC was unlikely to meet before its next scheduled meeting in Vienna in March.

“The OPEC cuts are stabilizing the markets, even if they are not making it go up very much,” said Christopher Bellew, broker at Bache Commodities in London.

Further support came as cold weather hit the U.S. Northeast, the world’s largest heating oil market.

China, one engine in the six year commodity price rally that started 2002, was expected to release fourth-quarter GDP data this week that economists say will show a 7.0 percent growth, the slowest pace of expansion in nearly a decade for the world’s third-biggest economy.

Russian gas reached Europe via Ukraine for the first time in two weeks after Moscow and Kiev ended a contract row that cut supplies to about 20 European countries.

NEW YORK, Jan 20 (Reuters)

Oil prices dropped 3 percent on Wednesday after OPEC announced a record supply cut that dealers said may fail to offset slumping world energy demand.

U.S. crude oil prices fell $1.40 to $42.20 a barrel by 1:35 p.m. EST (1835 GMT), after dipping to a more than four year low of $40.20 earlier in the trading session. London Brent rose 66 cents to $47.31 per barrel.

Oil prices have fallen more than $100 since July as a global financial crisis cuts into consumer and industrial fuel demand, and top forecasters are now predicting the first decline in world energy use since 1983.

The Organization of the Petroleum Exporting Countries, eager to push prices back up, announced on Wednesday an agreement to cut 2.2 million barrels per day of output starting Jan. 1, the biggest single reduction on record.

The agreed cut was slightly higher than expected and will add to previous OPEC deals to cut 2 million bpd since September. But oil traders focusing on the global economic downturn reacted coolly.

“It seems like, despite the fact that the economies of producer nations are clearly in trouble, they don’t have the temerity to actually go ahead and do the kind of cut that would be really interesting to traders to turn this around,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.

Some traders had also hoped oil producing countries that are not part of OPEC might have weighed in. But neither Russia nor Mexico, which have cooperated with OPEC production cuts in the past, offered to reduce output.

The White House called OPEC’s decision to cut production “short-sighted” and said the oil cartel has an obligation to keep the market well-supplied.

“It’s not clear that OPEC’s actions will be effective given the shift in global demand and the ability of OPEC members to meet the cartel’s targets,” said spokesman Tony Fratto.

“Regardless, OPEC has an obligation to keep the market well-supplied and to consider the health of the global economy, so efforts to limit the benefits of lower energy prices are short-sighted,” he said.

OPEC, however, is desperate to halt the slide in prices with economists predicting 11 of OPEC’s 12 members, as well as Russia and Mexico, will face budget deficits with crude oil at $40 a barrel.

Energy analysts said the cuts could bolster prices in the longer run if OPEC members comply and if demand falls less than expected in 2009.

“The biggest question about how effective this agreement will be is just how much demand will contract,” said Sarah Emerson, director of Energy Security Analysis Inc in Boston. “I think OPEC is showing that they have strong intentions to support prices.”

The slump in prices has already sent shock waves through oil producer countries and top companies, leading to cutbacks and delays in spending on key projects that had promised to boost future world output.

The soft market has also led oil refiners in the United States, the world’s biggest energy consumer, to slow down fuel production to match weak consumer demand.

The U.S. Energy Information Administration said the nation’s crude and refined fuel stockpiles rose last week as a demand slump led refiners to run less oil.

Richard Valdmanis
NEW YORK, Dec 17 (Reuters)

This from Investment U:

When I started driving, gasoline still contained lead and regular was selling for 29 cents a gallon. My father remembers 10 cents a gallon.

While it’s highly unlikely we’ll ever see those prices again, you could see gasoline below $1 a gallon, and it just might hit $0.75 a gallon. It might not be in time for Christmas, but the Easter Bunny might leave it in your Easter Basket.

That’s not just wishful thinking on my part: The International Energy Agency’s (IEA) most recent monthly forecast (released just yesterday) indicates year-over-year global oil demand will shrink in 2008 for the first time in the last 25 years.

Why? Developed nations are skidding into recession and emerging nations have hit the brake pedal on economic growth. And when the United States – by far the largest oil user in the world – cuts back, the ripple effect is devastating to producers.

Oil-laden tankers are backed up at U.S. oil unloading terminals, waiting to unload. At the same time, the nation’s most recent oil inventory report shows that storage tanks are brimming with crude oil, gasoline and heating oil. But that doesn’t mean there’s no money to be made here. In fact there are a number of opportunities to profit in oil right now.

Global Oil Demand – OPEC Cuts Production

OPEC is scrambling to cut production of oil. Chances are good that they won’t cut far enough or fast enough. Supply destruction will continue to lag demand destruction for the foreseeable future. And that sets the stage for a continued softening of pump prices as well as heating oil.

And then, of course, there will be the cheaters: You can expect rogues like Venezuela and Iran to continue to pump and sell as much oil as they can possibly suck out of the ground, since there is little production accounting oversight on the part of OPEC. It was a big problem the last time we had an oil crisis back in the 1970s.

How low could it go? Merrill Lynch is on record predicting $25 a barrel. It has a fairly good chance to go even lower, before supply cuts catch up with global demand slowdown, which is still occurring.

How long will it stay low? It’s hard to say, but any increase in global economic growth would provide a boost in demand and a subsequent rise in the price of oil. Current economic forecasts, while mixed, don’t show much of an increase until the latter half of 2009 – or even early 2010.

For now, though, demand is still falling, with October alone registering a steep 8.3% decline in crude prices. Simple math says that if crude prices are cut in half from here, so, too, could the price at the pump. Car dealers with rows of gas guzzling SUVs on their lots would be jumping for joy.

But just like $147 a barrel was artificially high, so, too, would be $20 a barrel on the low side. As prices begin to stabilize in late 2009 or early 2010, oil will likely return to a trading range of $80 to $100 a barrel. It would begin to slowly rise from there as the global economy climbs out of recession and economic growth rekindles.

2 Places to Put Your Gas-Savings Cash

Naturally, there are a few ways to put your growing mound of gas-saving cash to work:

• Shares of Autonation, Inc. (NYSE:AN), one of the largest car dealer networks in the country, are off 50% from their 52-week highs. Any sustained reduction in the price of gasoline will likely have a positive impact on car sales, particularly in the hard-to-move segments of the market like low-mileage SUVs, vans and pickups.
• A more direct way to play this would be to pick up a few shares of Valero Energy Corp. (NYSE:VLO) that’s been bouncing along in a tight trading range of $15 to $20 a share since mid-October. Its profits are tied directly to the spread between the price of crude oil and the price of refined products (known as the crack spread). A widening spread bodes well for refiners like Valero.

While I’m not sure I’d be running out to buy a big SUV anytime soon, it’ll certainly be easier on the wallet when pulling up to the pump. But don’t get too comfortable with cheap gasoline. Prices will eventually revert to their natural mean. And in the case of oil, it will eventually be higher.

Source: Global Oil Demand: Are You Ready for Gasoline Under a Buck a Gallon?

Light, sweet crude for January delivery rose $1.45,  or 3.4% to settle at $43.52 on the New York Mercantile Exchange, after climbing by as much as 7% earlier in the day. Futures have plunged roughly 70% since hitting a record-high $147.27 a barrel in July. However, they may be set for a rebound as traders close out short positions and production cuts offset slackening demand.

Traders who took short positions on crude contracts, or placed bets that prices would fall, are buying contracts to cover those bets now that oil has dropped more than 20% in the past two weeks. Their exit from the market has been expedited by the belief that prices are nearing a bottom, as well as suggestions that both OPEC and Russia will cut production next week.

Russia will air proposals on oil production cuts no later than December 17, Sergei Shmatko, the nation’s energy minister, told Interfax.

“Right now we need to see where we stand with respect to OPEC’s stated position,” Shmatko said. “I know that OPEC is preparing serious plans to cut production.”

Shmatko added that OPEC President and Algerian Oil Minister, Chekib Khelil was keen “to see Russia in OPEC,” but that Russia rather see “non-OPEC suppliers consolidate their position in order to keep the market stable.”

OPEC members are scheduled to meet in Algeria on Dec. 17 to discuss further production cuts. Oil has fallen more than 30% since the cartel last slashed its production quota, a 1.5 million barrel per day (bpd) reduction on Oct. 24. Analysts anticipate the OPEC that the next supply cut could be anywhere between 1.5 million bpd and 2.5 million bpd.

“The expectation of an OPEC cut is going some way toward curbing the downward momentum in prices,” Toby Hassall, an analyst at investment firm Commodity Warrants Australia, told The Associated Press. “A cut of 1.5 million to 2 million barrels a day seems like a reasonable range.”

Demand for oil has plunged over the past six months, with the onset of what is shaping up to be a severe global downturn. In its last monthly oil outlook, issued Nov. 17, OPEC trimmed its 2009 demand forecast by 530,000 to 86.68 million bpd. The Paris-based International Energy Agency is expected announce a cut to its 2009 forecast in its monthly report, set for release tomorrow.

Still, many analysts believe the market has “overshot” the downside to oil, and that further production cuts will be enough to create a floor for prices.

“We’re probably in the early stages of forming a base at the moment, and the price will likely edge up toward $60 or $70 by the middle of next year,” Hassall said. “We probably overshot on the downside the same way we overshot to the upside earlier this year.”

Source: Oil Prices Climb on Speculation that OPEC and Russia will Cut Production

“Bullish news today on top of the recent Chinese stimulus package and news of Saudi Arabia’s supply cuts failed to overcome economic concerns,” said Sucden Research analyst Michael Davies.

Among that bullish news was a report that militants are threatening to renew attacks on oil facilities in Nigeria. A few months ago, that would have automatically shoved the oil market higher. No longer.

Oil prices will likely “keep skipping along bottom here at the $60 per barrel range until we see the fully-implemented OPEC cuts and some winter demand data hitting the market,” said Neal Ryan, of Ryan Oil & Gas Partners.

And Mexico has reportedly hedged almost all of next year’s oil exports at prices ranging from $70 to $100. That stood in stark contrast to last year, when the world’s sixth-largest producer hedged only 20-30% of exports.

“This is a clear sign that they fear oil prices will remain below $70 a barrel in 2009,” said Kathy Lien, of GFT Forex. Lien added that “we doubt that they are the only oil producing country to start hedging.”

Source: Crude closes below $60 -  Mexico hedging like crazy