Woodside inks $1.1b syndicated five-year loan as LNG costs climb
OTTAWA: Woodside Petroleum Ltd., Australia's second-largest oil producer, agreed to a $1.1 billion fiveyear syndicated loan to refinance existing debt.
Australia and New Zealand Banking Group Ltd. and Bank of Tokyo-Mitsubishi UFJ Ltd. arranged the loan, which was provided by 34 banks, Perth-based Woodside said in a stock exchange filing. It will use the funds to repay a loan of the same size signed in May 2009, according to the filing.
Woodside said Nov. 30 that its Pluto liquefied natural gas venture, one of more than a dozen proposed LNG developments in Australia and Papua New Guinea, will cost A$900 million ($881 million) more and start about six months later than previously projected. The company's credit rating was cut to BBB+ from A-by Standard & Poor's on Dec. 3.
Woodside reduced its financing costs with the new loan, it said today, without being more specific.
The oil producer was paying 225 basis points more than the London interbank offered rate on the loan signed in May last year, while it was rated A, according to data compiled by Bloomberg. The margin increased to 250 basis points for a BBB+ rating, the data show.
Woodside shares rose 0.9 percent to A$43.11 as of 10:10 a.m. in Sydney, paring their decline this year to 8.8 percent. The S&P/ASX 200 Index has fallen 3.3 percent in 2010.
Moreover, Oil may halt its advance past a 26-month peak above $90 a barrel because of resistance on technical charts indicated by Bollinger Bands, according to Cameron Hanover Inc.
Crude climbed to $90.76 a barrel on Dec. 7, the highest intraday price since October 2008. While futures may again surpass the "psychologically important" $90 level, investors will probably start selling contracts when prices advance to around $90.55, said Peter Beutel, president of the energy adviser in New Canaan, Connecticut. That is the higher of two Bollinger Bands.
"The Bollinger Bands continue to offer resistance overhead," Beutel said in an emailed note. "There is room for a good deal more weakness than we saw on Wednesday."
Oil rebounded from a twoday drop today after an Energy Department report showed U.S. crude stockpiles fell almost three times more than forecast, as refiners boosted processing rates by the most since October 2008. The contract for January delivery on the New York Mercantile Exchange rose as much as 1 percent in electronic trading to $89.20 a barrel.
Bollinger Bands, which plot support and resistance levels based on volatility, are often used by investors to determine entry points for buying or selling contracts. Crude fell in early August, early October and midNovember after rising above the upper band and rebounded in late May and August after slipping below the lower band.
The market's failure to extend gains after topping $90 a barrel presents a "really persuasive bull trap," Beutel said earlier this week. This means buyers may misinterpret increases as a signal for further profits. "Buy stops," or levels where a rally may stall, start from $89.50 a barrel, then $89.85, before the 26-month high of $90.76, according to Beutel. On the downside, futures may drop to as low as $88.15 before a rebound, he said.
Moreover, Gasoline shipments to the U.S. from Europe are poised to drop this month after the profit from the trade tumbled to a six-week low.
U.S. gasoline was 1.1 cents a gallon cheaper than Europe's on Dec. 6, the biggest discount since Oct. 21, based on futures for delivery to New York harbor and benchmark 95-octane grade fuel in the Amsterdam-RotterdamAntwerp region. It was 10.3 cents a gallon more expensive than Europe's as recently as Nov. 29, the biggest premium since Aug. 9.
November's price gain was "temporary," said Roy Jordan, a London-based research consultant at Facts Global Energy. U.S. gasoline "demand has fallen versus last year," he said.
European shipments of gasoline to the U.S. tripled last month as the lowest American inventories in a year drove up returns from buying in one market and selling in the other. That's now evaporating as U.S. refiners step up processing rates after seasonal maintenance. Stockpiles of the fuel unexpectedly rose in the week ended Dec. 3, the Energy Department in Washington said yesterday.
The number of tankers chartered to ship gasoline to the U.S. Atlantic Coast rose to at least 29 in November, from 11 in October, according to data compiled by Bloomberg and Clarkson Research Services Ltd., a unit of the world's biggest shipbroker. The vessels carried 1.12 million metric tons, compared with 412,000 tons in October. Gasoline for January delivery traded at $2.33 a gallon on the New York Mercantile Exchange today, bringing the gain this year to 17 percent. It reached $2.3699 a gallon on Dec. 6, the highest price since May 4. -Bloomberg