The number of traders betting that oil prices will drop outnumbers the number of traders who believe they will rise by the largest margin ever. Some analysts believe prices will fall significantly lower in the near future – at least into the low $60 a barrel range – after soaring to $75 a barrel in August.

Supply has outrun demand this year as a global recovery has yet to accelerate. Yet, oil prices more than doubled from February to August and are up about 50% from where they started the year.

Now, many traders are positioning themselves to profit from a pullback. The gap between prices of options betting on a decline in prices and those that would profit as a result of a rise in oil has widened to a record 10 percentage points, according to five years of data compiled by Banc of America Securities-Merrill Lynch.

Put options, which give traders

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The Organization of the Petroleum Exporting Countries (OPEC) said yesterday (Thursday) that it would keep production quotas at 24.845 million bpd and urge members to adhere to targets, as global demand has yet to return in full.

However, a report from the International Energy Agency (IEA) indicated that demand is recovering more quickly than previously thought, and that OPEC may be playing catch-up as the global recovery gathers steam.

The IEA increased its outlook for global oil demand by nearly 500,000 barrels per day (bpd) for 2009 and 2010, to 84.4 million and 85.7 million bpd respectively.

Perhaps the biggest reason for the increase was surging demand in China, where the Red Dragon’s $587 billion (4 trillion yuan) stimulus plan has resuscitated manufacturing and helped China grow into the world’s largest auto market.

China’s imports of oil hit a record high in July, soaring 18% from the month prior to 19.63 million metric

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RFE/RL examines the viability of Hugo Chavez' gas OPEC idea - which, it suggests, will face obstacles in the form of pipeline infrastructure and the manifold differences between the oil and gas markets.  According to Bloomberg, the Oil Minister for Saudi Arabia says that oil prices will be influenced by economic growth rather than the volumes stockpiled.  Deputy Prime Minister Igor Sechin says Russia 'will bear' the criticism from OPEC regarding its implied lack of support.  Russia has made its first foray back into Iraq in six years: Energy Minister Sergei Shmatko has reportedly reached agreements on the building of two gas pipelines and on Russian involvement in the Yusifiyah and Dibis thermal power plants.  Gazprom's second quarter profits have fallen 45% with the drop in crude prices, as the price of Urals fell 50% to $58.41 a barrel.  ...

Russia's refusal to upgrade gas contracts with Ukraine jeopardizes gas transit to Europe, says Bogdan Sokolovsky, the representative of the Ukrainian president on international aspects of energy security.  The Ukrainian economics minister has reportedly assured Moscow that it will stick to the gas contract agreed in January.  The Kuwaiti Oil Minister, Sheikh Ahmed al-Abdullah al-Sabah, has advised that OPEC output quotas be retained - meanwhile Qatari Energy Minister, Abdullah bin Hamad al-Attiyah, has chastised Russia for not supporting the cartel more actively.  Russia may face a fall in oil production as geological prospecting significantly decreases.  The Kremlin is preparing a series of oil and gas agreements to be signed when Venezuelan President Hugo Chavez visits Moscow later this week.  Gazprom reportedly plans to increase investment in the Far East to $3.7 billion in 2010 to cater ...

A better-than-expected jobs report helped U.S. stocks rally ahead of the long weekend but the unemployment scenario continued to remain grim, signaling the much-expected economic recovery is not going to be smooth.  Worries that the rally has gone ahead of any economic recovery continued to keep a check on sentiments and stocks declined during the first three sessions of last week.  All major indexes started off on a dull note but posted strong gains in the afternoon.          

Following advances in the overseas markets, US stocks are expected to gain at the opening.  The DJIA futures added 79 points for a gain to 9496; the S&P500 increased 9.9 points heading toward a 1023.80 open.  Markets were closed yesterday for the Labor Day holiday.

On Friday, the 30-stock Dow Jones industrial average rose 96.66 points, or 1.03%, to 9,441.27.  The S&P 500 index rose 13.16 points, or 1.31%, to 1,016.40.  The

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Reuters examines oil prices: with an OPEC meeting imminent, crude prices have stabilized, as analysts expect to see the group agree to maintain its 'official output target stable around $70'.  Russia is surpassing Saudi Arabia in oil exports for the first time in the wake of OPEC production cuts.  'In no uncertain terms, Russia has been the biggest beneficiary of OPEC's sacrifice', says strategist Chris Weafer.  Saudi Arabian Oil Minister Ali al-Naimi believes that the current crude prices - between $68 and $73 a barrel - are acceptable for producers and customers alike.  Energy Minister Sergei Shmatko has met with Iraqi Prime Minister Nuri al-Maliki in an attempt to pursue Russia's aim of reviving Saddam Hussein era oil deals.  President Medvedev says that Russia must refuse requests for Ukraine to prepay natural gas transit fees, (with Kiev prepaying more than ...

Shell has begun building a $100 million lubricant blending plant in Torzhok, which is the first to be constructed by an international firm in Russia.  After talks with Polish premier Donald Tusk in Gdansk, Vladimir Putin will meet with Ukrainian Prime Minister Yulia Tymoshenko to discuss natural gas among other matters.  The oil minister of Qatar has said that Russia has promised to support OPEC's production cuts.  Petrobas shareholders are worried by the new plans Brazilian President Luiz Inacio Lula has for the company to explore new and extensive oil fields.  The corporation dropped in value by $7 billion in one day, as the President's plans would allow the state to increase its stake in the company.  Turkmenistan is planning to create a naval base on the Caspian Sea, a move that could be seen as ...

Oil fell to near $71 a barrel on Wednesday, extending hefty losses from the previous session, as rising stockpiles of U.S. crude outweighed positive economic data.

U.S. crude for October fell 79 cents to $71.26 a barrel by 12:40 p.m. EDT (1640 GMT), after falling $2.32 on Tuesday. Brent crude fell 49 cents to $71.33 a barrel after losing $2.44 the previous day.

The U.S. Energy Information Administration (EIA), the statistical arm of the Department of Energy, reported on Wednesday that crude stocks in the world’s largest energy consumer rose by 200,000 barrels last week.

While the build in crude stocks was nowhere near as large as the 4.3 million rise reported by the American Petroleum Institute on Tuesday, it still confounded initial market predictions for a 1.1 million barrel drop.

“We remain in a situation of massive over-supply, which is off the charts, but it does appear to be peaking,” Summit Energy analyst Brad Samples

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Russia may have sidestepped greenhouse gas emission cuts at the G8 summit, but Finance Minister Alexei Kudrin has pledged a Russian 'energy revolution' when the State Duma consider a bill to increase energy efficiency by 40% by 2020.  A transit deal for the Nabucco pipeline is to be signed next week but according to analysts, 'the major obstacles to Nabucco still stand and supply is number one'.  Reuters has a Q and A on what to expect from the Nabucco deal.  The European Commission has tempered demands for powers to coordinate gas flows across the union in the event of a gas cut off.  The European Commission will declare a 'Community Emergency' if the EU loses more than 10% of its gas supply.  Venezuela's Oil Minister has said that the country is making progress towards developing ...

Gold futures climb to two-and-a-half-month high Gold has seen "increased support as a safe haven investment during these uncertain economic times," Beahm said in emailed comments. "Coming off their worst June since the 1930s, the financial markets are just too volatile right now for many investors to feel confident."Mining, fertilizers and energy to benefit from rising inflationDespite the S&P 500's troubles, as the saying goes, there's always a bull market somewhere. And when seeking strong sectors, the inflationary backdrop is worth considering.IEA Slashes 2012 il Demand ForecastThe International Energy Agency cut more than 3 million barrels a day from its 2012 global demand forecast because record prices and slower economic growth will curb fuel purchases. A drop in OPEC spare capacity to ...