Saudi Aramco Raises Asian Oil Prices;Brent and WTI Prices Follow Suit

Saudi Aramco Oil Co. has raised its prices for all crude grades to be sold to Asia in May by thirty cents,based on strong refining margins in the region and a strong Dubai crude benchmark price.These factors could reflect strong Asian demand for oil.It is the second month in a row the state-owned energy titan has raised crude prices.
Other factors boosting crude prices may include the continued fighting in Yemen between a Saudi-led coalition of states and Iranian-backed Houthi Shiite rebels,and a weaker US dollar on Friday's lackluster employment report;as well as the realisation that sanctions on Iranian oil will not be meaningfully lifted for at least a year,even if the recently achieved framework agreement receives final approval from US and Iranian authorities.Morgan Stanley issued a report saying that,while clearly a bullish headline,a final deal and full lifting of sanctions still faces a number of obstacles.Even if a final deal is reached,we do not expect any physical market impact before 2016,said Adam Longson,head of oil research at the investment bank.
Oil prices on both sides of the Atlantic rose sharply Monday.NYMEX WTI crude futures rose 6.1 % to close at 52.14 bbl;while London Ice Futures Brent crude climbed 5.8% to 58.12 bbl.These were the largest one-day percentage increases since 3 February.
Another factor being cited in the oil price rise was a decline in the US dollar versus the euro Monday.The EURUSD pairing rose 0.06%.New York Federal Reserve Bank president William Dudley also made some concerning remarks,noting that a stronger dollar has given a significant shock to the US economy and low oil prices will exact a meaningful drag on growth as they shackle the energy industry's exploration plans.

Consultant:The Outlook for Banking-should you buy bank shares

For the next 10 years,we probably will be seeing much tighter regulations for banks,says Dino Kos of consultancy Hamiltonian Associates.The returns probably will be lower for the next decade.Regulators want to see capital cushions-and the more the better-to absorb losses,and that's gonna have an effect on return on equity. Some of the banks are shrinking,but I don't see that the industry or big banks as a whole are going to be shrinking.For banks with legacy issues,such as Bank of America with housing,it's gonna take several quarters-perhaps a number of years-to resolve them,Mr.Kos believes. Hamiltonian Associates Ltd. is a consultancy specialising in analysis of recent economic and political developments in a relevant,timely and incisive way.It has associates in New York,London and Singapore.Dino Kos is former Executive Vice President of the New York Fed. Bank of America(BAC)

Mohamed El-Erian:Assumptions And Actuality

Mohamed El-Erian,CEO of Pimco,has had many subtle thoughts regarding the present situation.For instance,he feels that the market has priced in an assumption that Quantitative Easing 2,or the Federal Reserve's adding assets to its balance sheet,will impact the real economy.In fact,every policy action carries a number of risks,such as:1.debasing the dollar;2.raising commodity prices;3.continuing the trend of outcomes falling short of expectations.There are not just benefits for investors to consider;but also costs and risks of Quantitative Easing 2.
The stimulus achieved a lot,but did not reach the unemployment target.People's expectations of stimulus were disappointed.The expectations were for a quick exit from government involvement.Now we have the prospect of more government involvement in the form of Quantitative Easing 2.Consistently,the policy expectations have not been matched.
We need fundamental structural reform to get this economy going again,to deal with supply and demand.You've got to get the housing market functioning again.It's a long list.
Our job is to navigate what's likely to be.There is no perfect solution in a world of second,third and fourth best.The political world is unwilling to decide what we're willing to give up.
The rocket has to go up sharply to reach escape velocity.There's a lot at stake,but you have to recognize the private sector is hoarding cash and continues de-risking.We went through a great age of leverage;now we're adjusting.The government has stepped in,but the private sector still wants to delever.It's the fundamental issue.It's all about balance sheets,Mr.El-Erian believes.
Pimco has more than a trillion dollars under management.The firm is best known for its bond funds,but has recently been developing its equity side.Mr.El-Erian shares the Chief Investment Officer role with Bill Gross,"the bond king."

A Worried World

Last week was an emotional one in the financial world,and that emotion spilled over into the general public.Federal Reserve Chairman Ben Bernanke's face was ashen and etched with cares.He had never looked so concerned.The U.S. central banker looked as though he bore the world on his shoulders.Indeed,he and his colleagues at the Treasury department and Securities and Exchange Commission did.The President of the Federal Reserve Bank of New York,Timothy Geithner,has worked very hard behind the scenes.President Bush has stayed informed and made statements,but delegated details to experts such as Mr.Geithner.More than a few eyes misted over last week,touched by the huge events they were witnessing.Art Cashin of UBS,who works at the New York Stock Exchange,said there was a sense of general fear in the air.We've never seen a series of institutions disappear rapidly;there were isolated instances in the past.This has been a great place,and I feel badly for those laid off and their families-and I miss many of them.We may be morphing into a whole new financial world.The world I knew is changing,and I doubt if it will ever come exactly back,the distinguished Wall Street veteran lamented.