Europe’s leading antitrust authority has raided oil majors Royal Dutch Shell, BP and Statoil in an investigation into the setting of oil prices, the latest probe into global benchmark rates.

The London offices of Platts, the world’s leading price reporting agency, were also raided on Tuesday, while ENI of Italy said it had received a request for information from Brussels, although its offices were not searched.

 The probe into oil benchmarks comes in the wake of the scandal over the manipulation of Libor rates and months after one of Europe’s largest energy trading groups warned of “inaccurate pricing” of crude and oil products. >> Read More

The script is familiar. As Brent crude dipped below $100 a barrel last week, investors switched their attention to Riyadh, Caracas and Tehran, looking for a response from Opec.

Rightly or wrongly, the triple-digit price for oil is seen as a “soft” floor, below which members of the oil cartel could cut production to support prices. Yet, even as the price has weakened from a high this year of more than $119, Opec members appear to be resisting the temptation to act. Apart from calls from Venezuela for an emergency meeting to discuss falling prices – largely aimed at a domestic audience rather than the global oil market – their reaction has been muted.

 “The market is well balanced,” Suhail Mohammed Al Mazrouei, the United Arab Emirates’ oil minister said on Monday. Even Iran, a hawk that tends to call for production cuts whenever prices weaken, took a moderate line. Rostam Qasemi, oil minister, said: “The price of oil had not gone below $100 for a long time.”

The group’s twice yearly meeting in Vienna at the end of May will tell us more, but so far everything suggests that Opec is willing to live with current prices of a few dollars above or below $100 a barrel.

Gulf officials say that as long as oil prices remain close to the triple-digit level, there is no need to panic. The moderate response reflects an assumption that the recent price weakness is temporary due to unusually heavy refinery maintenance in China, South Korea and several other fast-growing Asian nations. >> Read More

Sanctions-hit Iran considers the “logical” price of crude to be around $100 to $120 a barrel, its oil ministry said on Wednesday, ahead of an OPEC meeting next month.

“The logical price for oil is around 100 and 120 dollars a barrel,” ministry spokesman Alireza Nikzad told reporters on the sidelines of an oil and gas trade fair in Tehran.

Oil prices were mixed in trade on Wednesday.

New York’s main contract, light sweet crude for delivery in May, fell 10 cents to $88.66 a barrel but Brent North Sea crude for June was up 11 cents at $100.20. The Brent contract on Tuesday fell below the $100 mark for the first time since July. >> Read More

President Vladimir Putin’s pledge to achieve a stable mid-term growth rate of around 5% suffered a setback Thursday after the Russian Economy Ministry slashed its 2013 growth forecast.

The ministry said Russia’s gross domestic product will grow by only 2.4% in 2013 from an earlier outlook of 3.6%. Russia enjoyed a decade of rapid growth of more than 7% prior to the slump in 2009, but the economy slowed to 3.4% in 2011 from 4.5% in 2010.

Official figures showed Russia’s economy grew by only 1% on the year in the first quarter.

The ministry also cut its 2013 investment growth forecast to 4.6% from 6.5%, and industrial growth to 2% from 3.6%. Capital outflow is seen at between $30-$36 billion. >> Read More

As was largely expected by the sell-side, the ECB kas kept all three key rates unchanged, just like the BOE 45 minutes earlier. From the ECB:

  

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.75%, 1.50% and 0.00% respectively.

 

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.

It is expected that Draghi will tone down his expectations at the press conference in 45 minutes, although what actual steps he will take as opposed to just talking even more, is unclear. As for JPM, which was alone among those calling for a rate cut, it will promptly pull reality’s margin and bankrupt the real world, leading to a new, better one, in which JPM is the only surviving entity, allowing the bank to buy and sell any assets it wishes to/from itself, in the process sending the DJIA to that much desired 100,000E10, even as gas/oil prices tumble to negative.

There were reports earlier today that Chavez was continuing to work through chemotherapy but the latest comments from the Information Minister are that his breathing problems have worsened and he is in a “very delicate” state.

A change in Venezuelan leadership is unlikely to affect global markets but turmoil — especially in oil prices — can’t be ruled out.

Royal Dutch Shell (NYSE: RDS.A) has just released new forecasts for its ‘New Lens Scenarios’ program, which aims to predict how current business decision and policies may unfold over time and affect the markets in the future.

Peter Voser, the CEO of Shell, explained that the scenarios “highlight the need for business and government to find ways to collaborate, fostering policies that promote the development and use of cleaner energy and improve energy efficiency.”

The scenarios take two different approaches: one considers the world with a high level of government involvement, and the other looks at the markets when they are given more freedom to develop naturally.

With high government involvement in dictating energy and policies, Shell believes that natural gas will flourish to become the number one energy source in the world over the next couple of decades, overtaking coal and helping to reduce carbon emissions. >> Read More

The G20 meeting was a waste of time, as usual. The countries attending, in effect, have allowed Japan to pursue its proposed expansionary fiscal and monetary policy, though has shown it the yellow card in terms of overtly talking about weaker Yen levels. No great surprise. The next item on the agenda is the selection of the new BoJ governor, with the potential candidates being announced by the end of the month, according to the Japanese Cabinet Secretary. I would have thought it was Kuroda, but Japanese Press suggest its Mr Muto. No word on the ultra aggressive (monetarily) Mr Iwata. The PM, once again, raised the prospect of amending the BoJ law, if the Central Bank does not play ball. I have closed my Yen shorts and will wait for the next opportunity to short – I continue to believe that the Yen will weaken further in due course. S&P left Japan’s credit rating unchanged today. The Nikkei was up over 2.0% today, as Japan was not singled out at the G20 and as the Yen has weakened;

The Indian Central Bank governor, Mr Subbarao warned that the ability to reduce interest rates further was hampered due to inflation risks.  He added that increases of coal and electricity prices would increase inflation in coming months. The Finance Minister is to announce the 2013/4 budget on the 28th February. He has promised to curb this years budget deficit to 5.3%, and even lower (4.8%) for the 2014/5 fiscal year. It is understood that the Finance Minister has persuaded his political colleagues for the need to implement further spending cuts to avoid a credit downgrade, in spite of a general election, which is due in 2014 at the latest. The economy is expected to grow by +5.0% this year, below the +6.2% last year, increasing to 6.0% next fiscal year; >> Read More

Main headline from the latest ECB Monthly Report just out.

• The stronger Euro poses a risk that inflation might undershoot the European Central Bank’s target
• Recovery was expected to start later this year
• Risks to the outlook for price developments continue to be seen as broadly balanced over the medium term
• Upside risks relate to higher administered prices and indirect taxes, as well as higher oil prices, and downside risks stem from weaker economic activity and, more recently, the appreciation of the Euro exchange rate
• Risks to the outlook for price developments continue to be seen as broadly balanced over the medium term

As usual, the ECB bulletin was virtually identical to its main policy statement after their policy meeting last Thursday

Following ‘no change’ in policy, we assume we will be treated to a plethora of confidence-building market-implied views of just how great everything is in Europe (apart from fundamentally). Of course, the Q&A is what we want to hear and his involvement in the Monti Paschi debacle, his view on Anglo Irish, his ignorance of currency wars (“I do not talk about currencies”), and just how great the repayment of LTRO funds are (even as European stocks and bonds move into the red for the year)…

• *DRAGHI SAYS DATA SIGNAL FURTHER WEAKNESS IN EARLY 2013
• *DRAGHI SAYS RISKS TO OUTLOOK REMAIN ON DOWNSIDE
• *DRAGHI SEES UPSIDE PRICE RISKS FROM OIL PRICES, INDIRECT TAXES
• *DRAGHI SAYS ECB WILL MONITOR MONEY-MARKET CONDITIONS