Decoupling supposedly changed all that and, for oil at least, it has: despite America's economic malaise, oil prices have rebounded since 2009 on demand from China and elsewhere.

The days when drivers in America and other advanced economies set the pace for oil-demand growth are gone. In the 1970s, 56 per cent of the increase in global oil demand came from members of the Organisation for Economic Co-operation and Development. China made up 7 per cent. In contrast, for the decade ended in 2009, OECD demand fell outright. Global oil consumption increased due only to the continued appetite of countries like China, which accounted for 42 per cent of the increase.

China's rise fuelled the marked shift upward in oil prices this past decade. But replacing the OECD with emerging markets as the barrel buyers of last resort creates problems of its own. Deutsche Bank analyst Paul Sankey argues this shift has made oil demand, and therefore prices, more pro-cyclical. Instead of higher oil prices acting as a brake on economic growth and therefore keeping a lid on oil prices, higher oil prices can end up coinciding with, and even fuelling, more demand.

Why? The International Energy Agency expects the world to consume an extra 1.64 million barrels of oil a day next year compared with last year. This masks a drop in demand of 640,000 barrels a day in the OECD. And fully 77 per cent of the net increase is accounted for by China, the Middle East and the former Soviet Union.

Chinese oil demand is largely a function of economic growth, which in turn is tied to global trade. But unlike in the US, fuel prices are controlled in China. Between 1980 and 2011, Americans bought less oil as it got more expensive. That relationship doesn't hold with Chinese demand.

As Sankey puts it: "The stronger the global economy, the higher the oil price, the stronger China's demand. And vice versa."

Beyond China, there is the Middle East -- which at 7.6 million barrels a day is 80 per cent of the size of China's oil market -- and the former Soviet Union to consider. The economies of both are heavily tied to oil. So if oil prices rise, their economies grow faster, fuelling more demand for oil.

Meanwhile, if Chinese economic growth moderates, and oil prices fall in response, that hurts Middle Eastern and former Soviet economies and their demand for oil falls, reinforcing the pro-cyclical dynamic.

Dependence on emerging markets for incremental oil consumption looks set to stay. Demand in advanced economies made a comeback after the turmoil of the early 80s. Back then, though, their prime working (and driving) age populations were still growing strongly, whereas they are close to peaking now.

Oil's recoupling to emerging markets has, therefore, made it even more dependent on China's economic miracle continuing than investors might think.

Source: http://www.theaustralian.com.au/business/wall-street-journal/emerging-markets-fuel-oil-demand/story-fnay3vxj-1226483801723

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Source: http://www.marketwire.com/press-release/global-oil-demand-forecasted-to-increase-by-900000-barrels-a-day-in-2012-nyse-fst-1704681.htm

Overall, the Company had a loss from operations during the year ended June 30, 2012 of $1,846,559 compared to $1,893,765 in the year ended June 30, 2011. The Company had a loss per share of $0.02 in 2012 compared to a loss per share of $0.03 in 2011. As at June 30, 2012, the Company's consolidated financial statements reflect a working capital deficit of $277,815. This represents a decrease in the working capital deficit of $543,744 compared to the June 30, 2011 working capital deficit of $821,559. Cash used in operating activities during the year ended June 30, 2012 totaled $628,375, compared with $100,901 in the prior year. As a result of the private placement that closed in the third quarter and receipt of proceeds of a convertible promissory note in the first quarter, the Company had significantly more cash resources with which to fund operations and retire obligations incurred in prior periods.

On May 7, 2012, the Company entered into an option agreement to acquire 300,000 shares of Tawau Green Energy ("TGE") for 6,000,000 Malaysian Ringgit ("MYR") ($1,965,600). TGE is a privately held company based in Malaysia and is in the business of developing geothermal energy. Under the terms of the agreement, the first MYR 3,000,000 must be paid by the first anniversary of the agreement. The remaining MYR 3,000,000 of the investment will be earned through the Company's expenditures on a mutually agreed upon work program also by the first anniversary of the agreement. As at June 30, 2012, the Company had paid $81,850 and incurred expenditures amounting to $32,918 on the investment. If the MYR 6,000,000 is not paid by May 7, 2013, the Company must transfer and return an amount from its 300,000 TGE shares to the seller in proportion to the Company's shortfall against the total purchase price obligation of MYR 6,000,000.

During the year ended June 30, 2012, the Company incurred $329 (30 June 2011 – $515) in geological and geophysical interpretation and evaluation costs on the joint venture area of mutual interest surrounding the Bengara-II property, an oil and gas production sharing contract in Indonesia owned by the Company's 18% owned subsidiary CGB2. The exploration term of the Bengara-II property expired during the year ended June 30, 2012 and the majority shareholder of CGB2, Kunlun Energy Company Ltd., is negotiating with Indonesian authorities for an extension. As at this date, the outcome of these negotiations is uncertain.

The Company also filed on SEDAR its annual reserves report for 2012 in the form referred to in Canadian National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities". Complete copies of the reserves report are available for download from the SEDAR website, www.sedar.com.

On behalf of the Company,

Robert V. Rudman, C.A.
Chief Financial Officer

Further Info: www.continentalenergy.com

No securities regulatory authority has either approved or disapproved the contents of this news release.

Certain matters discussed within this press release may be forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Although Continental believes the expectations reflected in such forward-looking statements including reserves estimates, production forecasts, feasibility reports and economic evaluations are based on reasonable expectations and assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include financial performance, oil and gas prices, drilling program results, regulatory changes, political risk, terrorism, changes in local or national economic conditions and other risks detailed from time to time in Continental's periodic filings with the US Securities Exchange Commission.

SOURCE Continental Energy Corporation

The Paris-based adviser predicts that world oil consumption will increase by 800,000 barrels a day, or 0.9%, in both 2012 and 2013, reaching 90.6 million a day next year. That’s about 90,000 a day more than estimated last month. The agency said inventories have become “more comfortable,” and didn’t specify whether members should release emergency reserves to tame prices, a move discussed last month by leaders in the U.S., U.K. and France.

“There have been some bullish signals on the demand side,” the agency said today in its monthly report. “On the other hand, concerns about the health of the global economy are also rising in the wake of bearish economic indicators” from the U.S., Europe and China.

Brent crude rose 8% this year, trading at $115.76 a barrel Wednesday, amid concern that the dispute over Iran’s nuclear program may lead to a supply disruption. While the Group of Seven nations said on Aug. 28 it’s prepared to call on the agency to “ensure the market is fully and timely supplied,” IEA Executive Director Maria van der Hoeven said the same day that there is currently no “serious disruption of supply.”

Relatively Tepid

The agency said increases to its estimates stem from revisions to data for 2011. Global oil consumption will total 89.8-million barrels a day this year, reflecting “relatively tepid” growth, the IEA estimates.

The Organization of Petroleum Exporting Countries, in its monthly report released yesterday, predicted that world oil demand will increase 800,000 barrels a day, or 0.9%, to 89.55 million a day in 2013.

OPEC production increased by 45,000 barrels a day last month to 31.55 million, the IEA said. That’s about 450,000 a day more than required this quarter, and 950,000 a day more than the 30.6 million the group will need to supply in the next quarter. OPEC will meet to review output targets in Vienna on Dec. 12.

The IEA kept annual forecasts for supplies from outside the organization unchanged. Non-OPEC producers, such as Brazil, Canada and Russia, will bolster output by 700,000 barrels a day to 53.9 million a day next year.

Oil industry inventories in developed nations slipped below their five-year average in July, to 2.7 billion barrels, after increasing by about half the normal amount for the month, according to the agency. Still, that equates to about 58.3 days of consumption, or 0.6 days more than a year ago.

“The OECD stock cushion actually looks more comfortable today when measured in days of forward cover than before the latest draws,” according to the report.

Bloomberg News

Source: http://business.financialpost.com/2012/09/12/iea-boosts-oil-demand-forecast/

Author: James Stafford · August 31st, 2012 ·

Nowadays the energy picture is confusing at best as the more information we are shown the more blurred our vision seems to become. Mixed messages, poor reporting and a media hungry to sensationalize anything it thinks can grab a headline have led to many wondering what the true energy situation is. We hear numerous reports on how the shale revolution will transform the energy sector, why alternatives are just around the corner, why advances in oilfield extraction techniques and new finds will help to lower oil prices. Yet no sooner have we read these rosy reports than we are bombarded with negative news on the Middle East, on why alternatives will never compete, on peak oil and declining oil production.

So where do we really stand? Is our energy future one of falling prices and plentiful supply or should we prepare for declining supply and sky high prices?

To give readers a real understanding of where we are Oilprice.com was fortunate enough to speak with the world’s leading energy economist, Professor James Hamilton. James is a professor in the Economics Department at the University of California, San Diego. He has been a visiting scholar at the Federal Reserve Board in Washington, DC as well as many of the Federal Reserve Banks; and has also been a consultant for the National Academy of Sciences, Commodity Futures Trading Commission and the European Central Bank and has testified before the United States Congress. You can find more of his work on his website Econbrowser.

James Stafford: Oil prices have shot up in the last month. What range do you see oil prices trading in over the next 12 months?

James Hamilton: Oil prices have always been very volatile. If you look at 12-month logarithmic changes in WTI going back to 1947, you come up with a standard deviation of 0.27. In other words, 25% moves up or down within a year are fairly common, and 50% moves or greater have also been seen on a number of occasions.

If you look at options prices at the moment, they imply the same level of uncertainty looking forward. For example, somebody today is willing to pay $2.90/barrel for a NYMEX option to buy oil in September 2013 at $120/barrel, consistent with a standard deviation of annual log changes of 0.26. The market is saying that prices that high or higher are not that remote a possibility.

And if you look at current fundamentals, it’s not hard to imagine big moves in either direction coming fairly quickly. The price of oil would surely collapse if we saw a significant economic downturn in China (something nobody can rule out) or if Iraq succeeds in producing even half of its ambitious production targets (though I personally consider the latter unlikely). On the other hand, a military confrontation with Iran could produce a pretty spectacular price spike. If the Strait of Hormuz were to close, for example, it would represent a shock to world production that in percentage terms would be 3 times as big as the 1973-74 OPEC embargo.

Because the demand for oil is so insensitive to the price over the short run, and because there is little excess capacity in the world at the moment, even small disruptions or additions could produce big price changes. For this reason, I do not have a lot of confidence in anybody’s near-term oil-price forecasts.

On the other hand, I think we understand pretty clearly the main factors behind the overall increase in oil prices since 2005. Demand for oil, particularly from the emerging economies, has grown significantly, and we have had a hard time increasing global production. The single most likely outcome is that both conditions will continue to be with us. The most likely scenario is that the next decade will look something like the last, with oil prices volatile but exhibiting an upward trend.

James Stafford: For the past century or so, economies have generally been built upon energy. The economies with access to plentiful, cheap energy have developed the most. With the stagnation of oil production growth, how do you suggest economies could continue to grow from here? Should we stop expecting to see constant economic growth as the norm?

James Hamilton: I think this has put a significant burden on the oil-consuming countries. These economic problems have been compounded by the fact that some of the key manufacturing that once came out of countries like the United States and Japan has now been taken over by the emerging Asian economies.

But there is still a strategy for trying to take advantage of the resources we do have. The United States has had astonishing success in producing natural gas. This could be the basis for a renewed manufacturing advantage, a new source of U.S. exports, or an alternative transportation fuel. We should be looking for regulatory reform and infrastructure investment to encourage consumers and entrepreneurs to adopt alternatives to conventional gasoline-powered vehicles.

James Stafford: Apart from the Iran and Syria situations – are there any other geopolitical risks that could lead to increased volatility in the energy markets?

James Hamilton: The list of oil-producing countries is almost a Who’s Who of world trouble spots. There is ongoing unrest in Sudan and Nigeria, and it wouldn’t take much to see a major turn of events in Venezuela and Kazakhstan. Iraq, a key hope for future increases in production, has been a place of conflict for most of the last three decades. The same forces that disrupted production in Egypt and Libya last year could easily return. And the key worry about Syria and Iran is the possibility that instability there could spill over into other nations of the region.

James Stafford: Even though many Asian nations have found a way to continue trading with Iran, its economy is still suffering from high inflation and high unemployment. Do you believe that the US Sanctions are having enough of an impact on the Gulf state’s economy to force them into a deal over their nuclear program?

James Hamilton: I was surprised that the sanctions were as effective as they were in preventing Iran from selling all the oil it wanted. But the other key element of that diplomatic strategy is the assumption that Iran will respond to economic pressure by acceding to U.S. demands. The other possibility is that, if significantly wounded, the regime would lash out more desperately. This looks to me like a scary situation.

James Stafford: Whenever oil prices spike politicians are quick to blame speculators and oil companies for manipulating the markets. Are you in agreement with this – are speculators and oil companies to blame? Or are there other factors that are overlooked deliberately or otherwise by the mainstream media?

James Hamilton: The story is pretty simple, and even though politicians may try to distort it, you’d hope that the media would do a better job of reporting the truth than they have. World oil production was basically stagnant between 2005 and 2008, even though world GDP was up 17%. With economic growth like that you’d normally expect increased demand, particularly from the rapidly growing emerging economies, and in fact China did increase its consumption by a million barrels a day over these 3 years. But with no more oil being produced, that meant that the rest of us– the U.S., Europe, Japan– had to reduce our consumption. It took a pretty big price run-up before that happened. To those claiming the price is too high, I would ask, how high do you think the price had to go to persuade Americans to reduce oil consumption by a million barrels a day?

James Stafford: Could you let us know your thoughts on the shale revolution. How do you see it playing out and do you think we have been oversold on shale’s potential?

James Hamilton: This is a real success story, and a primary reason that U.S. production is now rising rather than falling. But there are several key points to keep in mind. First, it is not cheap to produce oil with these methods– tight oil is never going to be the reason we get back to $50/barrel. Second, we’re likely to face much steeper production decline rates from individual wells than was the case for conventional oil production. The same also applies to deepwater production. So those who think these new technologies will put us back in the world we once knew are in my opinion missing the big picture.

James Stafford: Drilling technology advances, new oil finds and now all the hoopla over shale oil – one would assume we are swimming in the black stuff, yet we have seen no material increase in global annual crude oil production for six straight years. Have we reached a period of peak oil? Or is Daniel Yergin correct in saying that we have decades of further growth in production before flattening out into a plateau?

James Hamilton: I do not think the expression “peak oil” is the most helpful way to frame the question. Too many people have a knee-jerk reaction as soon as they hear the phrase. I can’t tell you how many times I’ve seen people assume that it means that we’re “running out of oil”, which straw man they then try to debunk. I would instead call attention to the basic fact that the annual production flow from any given field shows an initial period of increase followed by subsequent decline. Anyone who tries to deny that has a serious lack of grip on reality. Production from the original Oil Creek District in Pennsylvania peaked in 1873, and from the state of Pennsylvania as a whole in 1891. There’s a long, long list of areas that have exhibited declining production rates for a long, long time. Global production nonetheless continued to increase for a century and a half, not so much because we got more out of the old fields, old states, old countries, but because we turned to new ones. But that game is obviously not one we can continue to play forever.

Yes, Yergin today is optimistic about the future. But I remember that Yergin was also very optimistic in 2005, and the last 7 years have not looked at all like he was predicting they would. We’ve increased production only a little bit since 2005, despite tremendous incentives to do more. I think many people are making a mistake if they assume that world oil production is always going to increase, year after year.

James Stafford: What are your thoughts on the Keystone XL Pipeline – is it something that needs to be pushed through after the presidential elections? Or something the country can live without?

James Hamilton: It is ridiculous to see oil selling in Cushing at a $20 discount to the world price and oil in North Dakota selling at a $20 discount to WTI. Since the 1860s we understood that pipelines were the logical way to transport oil. Somehow the Keystone pipeline became a symbol of some bigger controversies that in my opinion should be completely separate from the question of the most economically efficient (and for that matter, the most environmentally friendly) way to transport oil.

There are several work-arounds in progress, such as reversal of the Seaway Pipeline and plans to build just the Gulf Coast portion of Keystone. But I think that given the magnitude of the drop in U.S. demand and success of North American production, we’ll need additional measures.

James Stafford: How would you see energy production changing in the U.S. under a Romney Administration?

James Hamilton: Romney wants to be more aggressive in approving oil exploration and development, and that should make a difference. But it’s easy for the politicians to overstate how much they can change. The U.S. is moving ahead with tight oil production, and is going to do so no matter who is the president, because the economic incentives are just too powerful for anybody to stop it. On the other hand, it’s a big world out there, and anyone who thinks that U.S. production alone is going to make up for declines from mature fields and burgeoning consumption of emerging economies is in my opinion way too optimistic. The world faces a huge challenge, and I think we need to take that challenge very seriously.

James Stafford: James, thank you for taking the time to speak with us. For those of you who haven’t seen Professor Hamilton’s site please take a moment to visit Econbrowser

Source: http://www.economonitor.com/blog/2012/08/james-hamilton-oil-demand-rises-global-production-stalls-volatility-here-to-stay/

Perhaps it was because that some are starting to realize that while Hurricane Isaac did not pack as much punch as feared, at the same time he is refusing to go away quietly. This slow moving storm refuses to die and is still saturating the oil, pipeline and refinery rich Gulf coast with lots of rain and tropical storm force winds. This is making it more difficult to bring things back to normal. Despite some reports that the Chevron Pascagoula refinery in Mississippi was not impacted by the storm, now it seems that it is not the case. Bloomberg is reporting that the monster refinery is running at reduced capacity because of Tropical Storm Isaac, according to a statement posted on the company’s website.

Reuters News reported that Entergy Corp, the primary electric utility serving Louisiana, said Isaac has damaged a transmission line serving the Louisiana Offshore Oil Port. LOOP facilities unload crude from large tankers. Its facilities tie into pipelines serving more than 50 percent of the nation's refining capacity. Entergy said restoration of the line "is a high priority," in a statement. The LOOP has been closed due to the storm. Power outages have slowed the Louisiana Offshore Oil Port (LOOP) from getting back to normal. Reuters News reports that the LOOP which handles 13 percent of foreign crude oil coming into the United States, said on Wednesday it believes it has adequate backup power generation to restart deliveries and meet anticipated demand from refiners after Hurricane Isaac.

And that demand will be large and that should support crude prices when those refineries get back on line. Crude imports obviously have been grounded to a halt and the demand for high yielding crude will be high.

Natural gas also got a pop on a Reuter’s report that the Sabine Pipe Line LLC late shut in the Sea Robin/Henry Hub interconnection until further notice due to the water content of gas being delivered to the Hub following Hurricane Isaac's landing on the Louisiana coast. Word of new pipelines being built to bring in more shale gas could mean that the natural gas rally days could be coming to an end.

Dave Tolleris of Weather Risk or DTRISK says that a new storm Kirk and a storm behind it looks like it should go out to sea.

Distillate fuel inventories increased by 0.9 million barrels last week and are below the lower limit of the average range for this time of year. Propane/propylene inventories increased by 0.7 million barrels last week and are above the upper limit of the average range. Total commercial petroleum inventories increased by 4.7 million barrels last week.

Total products supplied over the last four-week period have averaged 19.2 million barrels per day, down by 2.1 percent compared to the similar period last year. Over the last four weeks, motor gasoline product supplied has averaged about 9.1 million barrels per day, down by 1.0 percent from the same period last year. Distillate fuel product supplied has averaged 3.6 million barrels per day over the last four weeks, down by 6.2 percent from the same period last year. Jet fuel product supplied is 3.8 percent lower over the last four weeks compared to the same four-week period last year.

Source: http://www.futuresmag.com/2012/08/30/oil-may-see-demand-boost-from-refineries?t=commodities

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Oil is up almost a third in six weeks at a time when the world economy, and hence fuel demand, are extremely weak.

Today’s oil price assumes the U.S. Federal Reserve will soon launch a new round of quantitative easing to stimulate the economy, or that bellicose rhetoric between Israel and Iran will lead to conflict, or that North Sea production problems will be long-lasting.

But none of these factors is a safe bet and if they were removed, the price of oil could fall quite sharply.

“The market is decoupling from fundamentals,” said Carsten Fritsch, an analyst at Germany’s Commerzbank in Frankfurt. “Much of the strength is based on factors – such as more U.S. economic stimulus – that are far from guaranteed.”

Brent crude oil hit $115 per barrel on Monday, its highest for three months and up 30 percent since the end of June. Oil hit an all-time high of $147 in mid-2008 just before the onset of the credit crisis, which sent prices down to $36 just six month later.

Oil prices are now well above the $50-$80 per barrel cost of production from most of the world’s newest oilfields, a level believed to be a natural floor for oil prices.

One spur for prices has been concern over a fall in North Sea output due to planned maintenance, which will help cut production in September by 17 percent from a dozen British and Norwegian crude oil streams.

For a short period, the North Sea oil spot market could be squeezed if demand for some grades outstrips supply, traders say, but maintenance work is likely to be completed fairly quickly and supplies will then resume.

HOSTILE RHETORIC

The oil market has also been strengthened by hostile rhetoric from Iran and Israel.

Israeli Prime Minister Benjamin Netanyahu has promised never to allow Iran to get nuclear weapons and said on Sunday most threats to his country’s security were “dwarfed” by the prospect of an Iranian atomic bomb. Washington has tightened sanctions on Iran and sought to increase international diplomatic pressure to curb Tehran’s nuclear ambitions.

Iranian leaders have talked of closing the Strait of Hormuz at the head of the Gulf, through which around a fifth of global sea-borne oil exports flow, if they are ever attacked.

However, with U.S. aircraft carriers within striking distance, Hormuz could not be closed for long, and it almost certainly would not suit Iran to try to close the strait, through which its oil and other exports also pass.

“Iran is not about to close Hormuz,” said Samuel Ciszuk, Middle East analyst for KBC Energy Economics. “Fear of war between Iran and Israel has been greatly overstated.”

But while Middle East tensions may be providing largely psychological support for oil, action by the U.S. central bank could have a dramatic impact on oil’s supply and demand balance.

Since late 2008, the Federal Reserve has bought $2.3 trillion in long-term securities in a drive to spur growth and revive the economy, indirectly pumping billions into assets markets and injecting huge liquidity into oil and commodities.

During the first round of quantitative easing from November 2008 to March 2010, oil more than doubled, and in the course of QE2, the second round between November 2010 and March 2011, it rose by a third.

Bank of America Merrill Lynch say monetary easing of $600 billion in September could push commodity prices sharply higher.

“Oil prices would likely increase by 14 percent on a third round of QE,” the Merrill Lynch strategists said in a note.

“SIGNIFICANT RISK”

However it is far from certain the Fed will announce QE3.

Jim O’Neill, chairman of Goldman Sachs Asset Management, said in a note on Monday he could not see why the Fed would be in a hurry to launch more quantitative easing: “U.S. financial conditions have eased quite a bit. While the United States is not growing at a pace, the case for further QE right now seems quite debatable.”

Dean Maki, a Barclays Capital economist in New York, agreed: “We do not see a convincing case for QE3 in September.”

Without the three obvious props — North Sea, Middle East war or QE3 — oil supply and demand fundamentals look sloppy.

All three of the big oil forecasters, including the U.S. Department of Energy, say global output has exceeded demand by a wide margin even with an embargo on Iranian oil, filling up stocks of oil and offering a sizeable cushion to cope with any unexpected supply shock.

“Forecasts paint a very bearish oil picture,” said David Hufton, managing director of brokerage PVM Oil Associates.

And yet investors’ appetite for oil has risen steadily with speculators increasing net exposure to crude oil futures and options on both sides of the Atlantic.

Data from the U.S. Commodity Futures Trading Commission and InterContinental Exchange show net long positions have increased in Brent and U.S. crude despite three months of declines in open interest and fairly low traded volumes.

Commerzbank’s Fritsch said this could make a sell-off sharper if it comes.

“If no round of QE is announced by the Fed this month, the oil market is likely to dip. Hopes are riding so high that there is a significant risk of prices falling.”

Source: http://business.financialpost.com/2012/08/14/oil-price-inflates-as-speculators-bet-on-stimulus/

BANGKOK, Thailand - Oil prices rose slightly Monday in Asia, clawing back losses triggered by the International Energy Agency's lower crude demand forecast as investors awaited U.S. retail sales figures.

Benchmark crude for September delivery was up 43 cents at US$93.30 a barrel at early afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell 49 cents to end at $92.87 on Friday. Brent crude was up 70 cents at $113.65 on the ICE futures exchange in London.

Mark Pervan, senior commodity strategist at ANZ Bank in Melbourne, Australia said attention this week will focus partly on U.S. retail sales for July as an indicator of whether demand for crude could increase or slacken.

"Retail data will give a reasonably good indication of underlying demand," he said. Strong retail figures would lift the oil price, he said. Other U.S. economic data this week includes industrial production figures for July.

On Friday, the IEA lowered its forecast for global crude demand for the year to 89.6 million barrels a day from 89.9 million. That included a downward revision of 200,000 barrels a day for China. The agency also cut its forecast for oil demand in 2013 to 90.5 million barrels per day from 90.9 million previously.

The IEA said the reduction was due to a "combination of persistently high prices and a weak economic backdrop."

In other futures trading, heating oil rose 1.5 cents to $3.035 per gallon. Natural gas was down 2.3 cents at $2.747 per 1,000 cubic feet. Gasoline was up 2.4 cents at $3.03 per gallon.

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NEW YORK, NY -- 07/13/12 -- Oil and gas stocks have continued to be weighed down by falling prices as a less than favorable demand outlook for crude, created by the recent euro crisis, weakens investor optimism in the exploration industry. The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has fallen over 10 percent in the last three months. Five Star Equities examines the outlook for companies in the Oil & Gas Industry and provides equity research on Canadian Natural Resource Ltd. (NYSE: CNQ) (TSX: CNQ) and Linn Energy, LLC (NASDAQ: LINE).

Access to the full company reports can be found at:
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On Thursday, the International Energy Agency stated they expect global oil demand to increase by 1 million barrels a day in 2013. In their report the IEA forecasts global oil demand in 2013 will rise 1.1 percent to average 90.9 million barrels a day. While the rise comes as a welcome sign, demand is still "well below" the levels before the financial crisis.

"While the economic risks encompassed in our weaker GDP and demand profile this month also hint at something of a price ceiling, the latent potential of emerging market demand growth and ongoing risk of nasty supply surprises could keep prices stubbornly high in absolute terms," the IEA report said.

Five Star Equities releases regular market updates on the Oil & Gas Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.FiveStarEquities.com and get exclusive access to our numerous stock reports and industry newsletters.

Canadian Natural is one of the largest independent crude oil and natural gas producers in the world. They have an effective and efficient, diversified combination of assets in North America, the North Sea and Offshore Africa. Total crude oil and NGLs production averaged 395,461 barrels per day in first quarter 2012 representing an increase of 11 percent over first quarter 2011 and a decrease of 11 percent from fourth quarter 2011.

Linn Energy is a top-10 U.S. independent oil and natural gas development company, with approximately 5.1 Tcfe of proved reserves (pro forma for closed and announced 2012 acquisitions) in producing U.S. basins as of Dec. 31, 2011. The company is scheduled to release second quarter 2012 earnings results before market open on July 26, 2012.

Five Star Equities provides Market Research focused on equities that offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. Five Star Equities has not been compensated by any of the above-mentioned companies. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at:
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Source: http://www.marketwire.com/press-release/global-oil-demand-to-increase-1-million-barrels-per-day-according-to-iea-nyse-cnq-1679714.htm

Imports surged 14.5 percent from April to 25.48 million tonnes, equivalent to about 6 million barrels a day, the first time daily imports have started with the number six.

At the same time domestic oil output was steady around 4.12 million barrels a day, making total oil available in May at just over 10 million barrels a day.

However, refineries only processed 9.03 million barrels a day, a modest 0.4 percent gain from April's figure, meaning about 1 million barrels a day appears to have headed into storage.

At first glance this appears counter-intuitive, as cargoes for May delivery would have been booked in late March and April, a time when Brent crude prices were at their highest.

Brent reached its intraday high for the year above $128 a barrel in early March and traded above $120 the whole month and for most of April, ending that month at $119.47.

Chinese crude buying patterns in recent years have tended to show that purchases ramp up when prices are relatively cheaper, and slow closer to the base level of demand when prices rise.

Looking at last year, when Brent traded above $126 a barrel in early April, Chinese crude imports dropped below 20 million tons in June and July, which were the weakest two months of 2011.

However, when Brent started to drop rapidly from August as concern over the European sovereign debt crisis mounted, Chinese imports started to increase, rising to what was at that time the second strongest level on record in November, and then posting fresh records in the first quarter of 2012.

It would have been reasonable to expect that given Brent was trading at its highest for this year in March and April, again on European debt woes, that Chinese imports would have eased.

But the slowing in April may have been a false dawn, given May's strong recovery.

So the question remains: why are the Chinese continuing to buy crude for storage even though the price increased sharply, conditions that have in the past resulted in less oil flowing into strategic reserves.

The answer may be in what is different this time around - namely the concern about Iran.

In 2011 China was buying more than 500,000 barrels a day from Iran, a tenth of its own imports and more than a fifth of the Islamic republic's exports.

While this has slipped to an average of 385,000 barrels a day for the first four months of 2012, China is still a major buyer of Iranian crude.

China has also yet to receive a waiver from the United States exempting it from the financial sanctions, starting at the end of this month, that target Iran's oil trade as part of Western efforts to force Tehran to open its nuclear program to international scrutiny.

While a compromise with Washington may well be in offing, it seems the Chinese have decided that it's best to be prudent and cautious and make sure they have enough oil in reserves just in case they have to cut off imports from Iran altogether.

While the market is comfortable now that any lost Iranian output can be sourced from other suppliers, mainly Saudi Arabia, there wasn't this level of confidence in late March and April, when China would have been securing May cargoes.

If the Chinese were worried about Iran and boosting storage for that reason, despite the high Brent price, then it's also reasonable to assume this process likely continued for June's imports, which would have been booked late April and early May.

The 23 percent drop in the Brent price since mid-March to current levels around $97.50 a barrel may also encourage the Chinese to continue filling strategic storage, as well as commercial inventories for new refining capacity scheduled to come on line in the second half.

There is also the possibility that actual demand increases in the second half as the authorities stimulate economic growth.

Taken together, it seems that China's crude imports will remain robust, with any expected weakness not happening because of the Iran issue.

Like many analysts, I had expected the jump in Brent prices in the first quarter and a softer economy to temper gains in crude imports, but it appears the Iran issue and the resulting need to boost storage has come up trumps.

On January 12, I wrote that the bullish case for China's oil demand depended on ongoing stockpiling, and this still holds true.

In the January-to-May period, crude imports have averaged 5.68 million barrels a day, an 11.1 percent gain over the 5.11 million from the same period in 2011.

Taking average imports for the first five months of 2012 together with average domestic output of 4.1 million barrels a day, and subtracting off the 9.26 million barrels a day of refinery throughput, and this leaves an average 520,000 barrels a day that is likely to have been stockpiled.

This is roughly half the daily rate of what appears to have been put in storage in May, which probably makes last month a bit of an outlier.

But even an average above 500,000 barrels a day is an enormous number, and if maintained would result in 183 million barrels of storage being filled over 2012.

This would seem unlikely, but if stockpiling does ease, an acceleration in second half demand could result in oil imports maintaining an increase of about 10 percent over 2011.

(Clyde Russell is a Reuters market analyst. The views expressed are his own)

(Editing by Miral Fahmy)

Source: http://www.cnbc.com/id/47778765

West Texas Intermediate futures gained as much as 1.6 percent, while Brent oil in London surpassed $100 a barrel for the first time since June 1. U.S. crude inventories fell 1.8 million barrels last week to 384.1 million barrels, the industry-funded American Petroleum Institute said yesterday. An Energy Department report today may show supplies slid by 500,000 barrels, according to a Bloomberg News survey. Bank of America Corp. cut price forecasts for the year’s second half and 2013.

“The U.S. recovery is a bright star in a dim firmament,” said Christopher Bellew, senior broker at Jefferies Bache Ltd. in London. “But there is no reason for prices to hold here, and the market may well turn lower again.”

Oil for July delivery climbed as much as $1.38 to $85.67 a barrel in electronic trading on the New York Mercantile Exchange and was at $85.31 at 1:33 p.m. London time. The contract yesterday rose 0.4 percent to $84.29, the highest close since May 31. Prices are 14 percent lower this year.

Brent oil for July settlement gained as much as $1.77, or 1.8 percent, to $100.61 and was at $100.20 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to WTI was at $14.89, compared with $14.55 yesterday.

Relative Strength

New York crude is set to rebound based on a technical indicator that shows a decline of more than 20 percent from this year’s high into bear market conditions is the most-exaggerated drop in more than 26 years.

The relative strength index, or RSI, has been below 30 since May 11, signaling that oil is poised to climb, said Richard Ross, a technical analyst at brokerage Auerbach Grayson & Co. in New York. The 14-day RSI, which identifies possible turning points in markets, dropped to 16.3 on June 1, the lowest level since February 1986.

Oil is unlikely to collapse as it did in 2008 because long- term fundamentals haven’t changed and supply may not keep up with demand, Royal Dutch Shell Plc Chief Executive Officer Peter Voser said yesterday in Kuala Lumpur. It would be “irresponsible” to say that a few weeks of worse-than-expected economic data has significantly changed the market outlook, Maria van der Hoeven, the head of the International Energy Agency, said in the Malaysian capital.

Economic Outlook

Bank of America trimmed estimates for Brent crude in the second half to $106 a barrel, from $110, and for West Texas Intermediate to $97 from $107, according to an e-mailed report. It lowered 2013 forecasts for Brent to $110 from $120 and for WTI to $100 from $111.

“Europe is now facing the increased possibility of a full- blown banking crisis,” said Francisco Blanch, head of commodities research for Bank of America in New York. “In addition to weakening oil demand in Europe, growth in emerging markets and the U.S. is softer than anticipated.”

The Institute for Supply Management’s index of non- manufacturing businesses, which covers about 90 percent of the U.S. economy, rose to 53.7 last month from April’s 53.5, the Tempe, Arizona-based group said yesterday. The median forecast of 75 economists surveyed by Bloomberg News projected 53.4. Readings above 50 signal expansion.

U.S. gasoline stockpiles rose 1.4 million barrels last week, figures from the API showed. They are forecast to climb 950,000 barrels in the Energy Department report, according to the median estimate of 12 analysts in the Bloomberg survey. Distillate inventories, a category that includes diesel and heating oil, gained 1.8 million barrels compared with a projected 250,000 increase.

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey. The Department is scheduled to release its report at 10:30 a.m. in Washington.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

Source: http://www.bloomberg.com/news/2012-06-06/oil-gains-a-third-day-on-demand-outlook-as-crude-stockpiles-drop.html

The grant was awarded under a Facilitation Funds Agreement, which was signed in Kota Kinabalu, Malaysia, on May 25, 2012. Ramzi Raad, MD of TGE; Dato' Seri Dr. Ali Hamsa, Director General of the Public Private Partnership Unit of the Prime Minister's Department; and Zakaria Saad , Head of Business Banking of Bank Pembangunan Malaysia Berhad (BPMB) signed the Facilitation Funds Agreement.

Under the Facilitation Funds Agreement, BPMB will distribute the funds. TGE will use the proceeds of the grant to pay for expenses related to road construction and other infrastructure enhancements involving the geothermal power resource development in Apas Kiri.

Continental Energy’s Chief Executive Officer Richard L. McAdoo, who also serves as the Geotechnical Director for TGE, witnessed the signing ceremony. According to him, the grant reiterates the commitment of both the Sabah Government and the Malaysia Government to utilize renewable energy sources so as to address electrical power production deficits in Sabah. Such type of fiscal incentive is important for making green field renewable energy projects as successful ventures.

McAdoo added that this kind of government support was instrumental in making Continental Energy to invest in TGE, who played a key role in stressing the advantages of the Apas Kiri geothermal energy development project to the residents of Sabah.

Source: http://www.azocleantech.com/news.aspx?newsID=16716

TGE is developing a geothermal energy resource at a site named Apas Kiri, located in the southern portion of the Malaysian State of Sabah near the city of Tawau. Apas Kiri will be Malaysia's first geothermal energy development. It is expected to come online by early 2015 with a rated net capacity of 30 Megawatts.

The grant was formalized in a Facilitation Funds Agreement ("FFA") signed at a ceremony in Kota Kinabalu, Malaysia, on Friday, May 25th. The FFA was signed on behalf of the Malaysian Government by Dato' Seri Dr. Ali Hamsa, Director General of the Public Private Partnership Unit of the Prime Minister's Department; on behalf of TGE by its Managing Director, Mr. Ramzi Raad; and on behalf of Bank Pembangunan Malaysia Berhad ("BPMB") by Mr. Zakaria Saad, its Head of Business Banking.

Under the FFA, the grant funding will be disbursed by BPMB, a development bank owned by the Malaysian Government and mandated to provide medium to long term financing to capital intensive development and infrastructure projects. The proceeds of the grant are to be exclusively utilized by TGE to pay for costs associated with constructing access roads and making related infrastructure improvements involving the Apas Kiri geothermal power development.

The Company's CEO, Richard L. McAdoo, who is also the Geotechnical Director of TGE, was present and witnessed the signing. He said afterwards, "This grant reaffirms the strong commitment and firm resolve that both the Government of Malaysia and the Government of Sabah have in solving electrical power generation capacity shortfalls in Sabah utilizing renewable energy sources. This kind of fiscal incentive is essential to any green field renewable energy project's success. Our recognition of this vital Government support was one of the principle factors in our recent decision to invest in TGE. The management of TGE has done an excellent job in highlighting the benefits of the Apas Kiri geothermal energy development to the people of Sabah and this grant is a remarkable demonstration of the Government's strong commitment of support for the timely implementation of the project."

On behalf of the Company,

Robert V. Rudman, C.A.
Chief Financial Officer

Further Info: www.continentalenergy.com and http://agoracom.com/ir/continentalenergy

No securities regulatory authority has either approved or disapproved the contents of this news release.

The Company assumes no obligation to update the information in this release.

Statements in this news release that are not historical are forward looking statements. Forward-looking statements in this news release include: that TGE will build, own and operate a geothermal power plant in Sabah; that the plant will come online in 2015; and that the grant funds will help build road and infrastructure. Forward-looking statements are subject to risks, uncertainties and factors that include, but are not limited to the nature of major construction projects, which are subject to construction delays, cost overruns and uncertainties;, energy alternatives and pricing; dependence on existing management;, that technology may not work as expected; the government could cancel its grant and general economic conditions. In regards to our company, the following are also risk factors: we may not be able to complete our non-financial contractual obligations to acquire our interest; we may not be able to finance our contractual obligations to acquire our interest in the project; we may not be able to finance operations and growth; we may not be able to attract and retain employees and consultants; we face competition from cheaper or more accepted competitors or energy sources; it is not yet assured that TGE and our technology can perform under commercial conditions or that TGE or we can keep control on costs. In addition our company faces political risks in the regions where we operate. Readers should also refer to the risk disclosures outlined in disclosure documents filed by other early stage energy and environmental companies with the Securities and Exchange Commission available at www.sec.gov. The Company assumes no obligation to update the information in this release.

SOURCE Continental Energy Corporation

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CBM Asia (TSX.V:TCF) (www.cbmasia.com ), a Canadian-listed coalbed methane ("CBM") company focused solely on the Indonesian CBM industry and with interests in four CBM production sharing contracts ("PSC") is pursuing new CBM opportunities in Indonesia. Under the agreement, Continental and CBM Asia will jointly and exclusively study selected areas in Indonesia with the objective of identifying geologically justified candidate areas to be jointly pursued as targets of opportunity for direct acquisition of CBM PSCs offered by the Indonesian government through public tenders or through direct proposal tenders conducted under joint study arrangements.

Successful CBM PSC acquisitions shall be shared by Continental and CBM Asia under a pre-agreed joint operating agreement ("JOA") format in the participating interest proportions 75% CBM Asia and 25% Continental. CBM Asia shall act as operator under the JOA and any CBM PSC and shall pay 100% of the JOA's CBM PSC general and administrative costs. All CBM PSC acquisition costs and other JOA exploration and drilling costs shall be borne by the parties in proportion to their respective JOA participating interests.

According to MIGAS, the oil and gas division of Indonesia's Ministry of Energy, gas production from CBM is expected to contribute to the country's efforts in boosting its declining gas output. Indonesia has the world's second largest CBM reserves after China, with total potential reserves of 453 trillion cubic feet, twice that of its estimated conventional natural gas resources. In order to promote CBM development, the Indonesian Government has prepared some new incentives and streamlined CBM working area applications. Foremost among these incentives is a favorable production sharing split for the contractor of 45% for CBM gas as opposed to the 30% conventional PSC operators receive for gas. A tax holiday incentive is also being considered for CBM gas.

Continental's CEO, Richard McAdoo stated, "This agreement with CBM Asia is the first step along a planned path of expansion into the unconventional oil and gas sector in Indonesia which is pushing increased gas production by any means, largely to fuel a chronic under capacity of electrical power generation. We intend to leverage our long history of oil and gas operating experience in Indonesia with a far reaching understanding and knowledge of the geology of Indonesia into the CBM sector. We are pleased to have CBM Asia, a leading CBM developer and operator, as our operating partner in this expansion. I am confident we will make a good team, as we each bring a strong competitive advantage to the table."

CBM Asia's President and CEO, Al Charuk, added, "We are very excited to enter into a CBM agreement with Continental Energy Corporation which like ourselves is Indonesian focused. Continental's management and technical teams have extensive geological knowledge underpinning potential CBM opportunities as well as operating experience required for surface operations. We have identified several areas of interest which we and our new partner will be actively pursuing in the near future."

On behalf of the Company,Robert V. Rudman, C.A.Chief Financial Officer

Further Info:www.continentalenergy.com http://agoracom.com/ir/continentalenergy

No securities regulatory authority has either approved or disapproved the contents of this news release.

Statements in this news release that are not historical are forward looking statements. Certain matters discussed within this press release may be forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Although Continental believes the expectations reflected in such forward-looking statements including reserves estimates, production forecasts, feasibility reports and economic evaluations are based on reasonable expectations and assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include financial performance, oil and gas prices, drilling program results, regulatory changes, political risk, terrorism, changes in local or national economic conditions and other risk detailed from time to time in Continental's periodic filings with the US Securities Exchange Commission. Readers should also refer to the risk disclosures outlined in disclosure documents filed by other early stage energy and environmental companies with the Securities and Exchange Commission available at www.sec.gov.

The Company assumes no obligation to update the information in this release.

SOURCE Continental Energy Corporation

For further information: Robert Rudman, CFO, +1-561-779-9202, rrudman@continentalenergy.com or AGORACOM cppxf@agoracom.com

JAKARTA, Indonesia, May 9, 2012 -- Continental Energy Corporation (OTCBB: CPPXF) (the "Company" or "Continental") an emerging international energy company operating in Southeast Asia, today announced that it has purchased a 10% stake in Tawau Green Energy Sdn. Bhd. ("TGE"), a privately held company based in Kota Kinabalu, Sabah, Malaysia.

TGE is a geothermal energy developer. On November 29, 2011, TGE entered into a Renewable Energy Power Purchase Agreement (the "PPA") with Sabah Electricity Sdn. Bhd. ("SESB") to supply a capacity of 30 megawatts of electrical power to SESB's East Coast Sabah power grid. SESB is a utility owned 80% by Tenaga Nasional Berhad, the federally owned electrical generation authority and utility of Malaysia and 20% by the State Government of Sabah. TGE is developing a volcano related geothermal resource known as "Apas Kiri" which is located in southern Sabah near the city of Tawau approximately 100 miles north of Continental's Bengara-II oil and gas PSC in Indonesia.

TGE will build, own and operate the geothermal power plant and expects to construct it at an estimated total cost of 400 Million Malaysian Ringgit ("MYR") (approximately US$ 133 Million). TGE plans to commission the plant by the end of 2014 and when completed, it will be Malaysia's first power plant fired by a geothermal resource.

The PPA provides for a fixed purchase price by SESB of MYR 0.21 per kilowatt hour (approximately US$ 0.07) and a guaranteed off-take of all power the geothermal plant can produce for a fixed term of 21 years from first commercial operation. Over the 21 year life of the PPA, TGE expects to generate about US$ 328 Million in revenues at the PPA price. Additionally, TGE has applied for a Feed-In Tariff incentive from the Malaysian Government which if and when approved, would increase the overall revenue projection.

Further, TGE's Tawau geothermal power project has been registered and validated with the United Nations Framework Convention on Climate Change under its Clean Development Mechanism program and is enabled to earn certified emission reduction ("CER") credits during its first ten years of operations. Each CER may be sold and traded on carbon credit exchanges such as BlueNext at a quoted market price (current spot CER price is euro 3.55 each). When operating at its rated capacity of 30 megawatts, the power plant is expected to reduce CO2 emissions by 282,400 metric tonnes per year and earn the same number of CERs (1 CER = 1 tonne CO2 reduction). Under its agreement with a third party carbon credit solutions provider, TGE will be entitled to 75% of the CER revenue or about euro 750,000 per year at current CER spot prices.

Continental is purchasing its 10% stake in TGE from an existing TGE shareholder (the "Seller"). Pursuant to a share sale and purchase agreement, Continental will make a combination of cash payments on behalf of or directly to TGE in the form of shareholder loans repayable by TGE to the Seller. The payments will include set amounts per month plus other cash payments from time to time over a 12 month period to a cumulative and maximum amount of 6 Million Malaysian Ringgit (approximately US$ 2 Million). Continental's payments are to be administered jointly by Continental and the Seller and utilized solely to provide financing for pre-agreed, front-end geothermal resource development costs incurred by, or on behalf of, TGE. In addition, the share sale and purchase agreement provides Continental with the right to appoint one person to TGE's Board of Directors and the right to designate TGE's Geotechnical Director. Continental's Chief Executive Officer, Richard L. McAdoo has accepted the role of Director and he will also act as TGE's Geotechnical Director for geosciences and geothermal resource exploration, development and exploitation.

Richard McAdoo stated, "This acquisition of a 10% stake in TGE is a milestone event for Continental. It represents that all important, first big-step of our planned expansion into the renewable electrical power generation sector in a high growth region. The countries of Southeast Asia are all aggressively pursuing additional electrical power generation as the solid growth of their economies places unprecedented demand on current electrical generation capacity. As a result, clean, sustainable and renewable energy projects are generating major interest from regional financing sources and are attracting substantial investment incentives from the highest levels of government. The rapid and impressive track record of TGE in bringing the Apas Kiri geothermal project from concept to PPA is an excellent example of one of many attractive business opportunities available to innovative renewable and unconventional energy companies in Southeast Asia. We are extremely pleased to be joining TGE in this business venture and we are confident that our expertise in geological resource evaluation, risk management, and drilling will make a major contribution to TGE's success."

Ramzi Raad, TGE's Managing Director confirmed, "With our PPA in place and other supporting contracts and approvals either in place or in final stages of completion, we are now shifting our corporate focus to implementing development of the Apas Kiri geothermal resource. As a new shareholder, Continental is expected to play a major role in our future success. Continental brings a considerable amount of valuable geological and drilling technical expertise to the table in addition to its financial commitment. Continental's technical expertise and its long track record of oil and gas operating experience in nearby Indonesia is the perfect complement to TGE's proven expertise and experience in electrical power generation in Sabah."

This press release is available on the Company's online investor relations HUB for shareholder questions, comments and discussion. http://agoracom.com/ir/continentalenergy

On behalf of the Company,
Robert V. Rudman
Chief Financial Officer

Investor Relations
http://agoracom.com/ir/continentalenergy

Further Info: www.continentalenergy.com

No securities regulatory authority has either approved or disapproved the contents of this news release.

Forward Looking Statements

Statements in this news release that are not historical are forward looking statements. Forward-looking statements in this news release include: that TGE will build, own and operate a geothermal power plant near Tawau and expects to construct it at an estimated total cost of 400 Million MYR; that the plant will be commissioned by the end of 2014; that the PPA agreement will be complied with and generate about US$ 328 Million in revenues over the term of the PPA agreement; that TGE may get a Feed-In Tariff incentive; that the project will generate carbon credits that can be sold; that we can complete all payments required to earn our interest in the project; that we plan expansion into renewable electrical power generation in high growth regions; and that our expertise in geological resource evaluation, risk management, and drilling will make a major contribution to TGE's success.

Forward-looking statements are subject to risks, uncertainties and factors that include, but are not limited to the nature of major construction projects, which are subject to construction delays, cost overruns and uncertainties of whether a project will work as well as expected or generate revenues as expected; the nature of the carbon credit industry, including changing customer demand, changing regulatory requirements, an immature and unpredictable market for CERs, different regulations across national borders; other risk factors include customer acceptance of our services and products; the impact of competitive services, energy alternatives and pricing; dependence on existing management;, that technology may not work as expected; and general economic conditions. In regards to our company, the following are also risk factors: we may not be able to complete our non-financial contractual obligations; we may not be able to finance our contractual obligations to acquire our interest in the project; we may not be able to finance operations and growth; we may not be able to attract and retain employees and consultants; we face competition from cheaper or more accepted competitors or energy sources; it is not yet assured that TGE and our technology can perform under commercial conditions or that TGE or we can keep control on costs. Substantial revenues, including sales of electricity, heat and CERs does not necessarily mean that our company will be profitable. In addition our company faces political risks in the regions where we operate. Readers should also refer to the risk disclosures outlined in disclosure documents filed by other early stage energy and environmental companies with the Securities and Exchange Commission available at www.sec.gov.

The Company assumes no obligation to update the information in this release.

SOURCE Continental Energy Corporation

Current Working Capital – As at March 31, 2012, the Company's condensed interim consolidated financial statements reflect a working capital surplus of $22,063. This represents an increase in working capital of $1,077,753 compared to the December 31, 2011 working capital deficit of $1,055,690.

Operations – Overall, the Company had a loss from operations during the three month period ended March 31, 2012 of $1,198,449 compared to $139,065 during the three month period ended March 31, 2011.

On behalf of the Company,
Robert V. Rudman, CFO

Further Info: www.continentalenergy.com and http://agoracom.com/ir/continentalenergy

No securities regulatory authority has either approved or disapproved the contents of this news release.

Certain matters discussed within this press release may be forward-looking statements within the meaning of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Although Continental believes the expectations reflected in such forward-looking statements including reserves estimates, production forecasts, feasibility reports and economic evaluations are based on reasonable expectations and assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include financial performance, oil and gas prices, drilling program results, regulatory changes, political risk, terrorism, changes in local or national economic conditions and other risks detailed from time to time in Continental's periodic filings with the US Securities Exchange Commission.

New York's main contract, West Texas Intermediate crude for delivery in May jumped $1.24 to $103.94 a barrel.

Brent North Sea crude for May gained 57 cents to $120.75 in late London deals.

The International Energy Agency (IEA) maintained its forecast of moderate oil demand growth this year but said on Thursday that a tighter market trend since 2009 seems to be easing after a first-quarter rise in global stocks.

The IEA kept its 2012 forecast for growth in oil demand at 0.8 million barrels per day (mbd) to 89.9 mbd, with consumption falling slightly over the summer as is normal and then picking up again.

In its previous monthly report in March, the body representing the interests of oil consuming nations had warned of "a heady brew of both real and anticipated supply-side risks," chief among them concerns over Iran's nuclear programme, but this time it believed the pressures were easing.

Meanwhile, OPEC left its 2012 oil demand forecast unchanged on but cautioned that it now expects slower global economic growth, notably because of the eurozone debt crisis.

Current high prices were unjustified, driven by speculative activity on the markets rather than economic fundamentals, it said.

The Organization of Petroleum Exporting Countries put world demand this year at 88.64 mbd, up 0.86 mbd from 2011 and compared with 88.63 mbd in its previous monthly report.

"Various economic developments worldwide are almost offsetting each other, leaving the total oil consumption picture nearly unchanged from last month," oil producing cartel said.

It reiterated its charge that current high prices were due to speculation on the markets, combined with geopolitical concerns -- essentially tensions over Iran's nuclear programme -- and did not reflect actual demand.

Iran's President Mahmoud Ahmadinejad on Thursday said that his country "will not retreat an iota" from its nuclear rights, as Tehran prepared for weekend talks in Istanbul with world powers over its atomic activities.

"The Iranian nation is standing firm on its fundamental rights and under the harshest pressure will not retreat an iota from its undeniable right," Ahmadinejad said in a speech in the southern town of Minab, according to the official IRNA news agency.

The Islamic republic has vehemently denied Western assertions it is building a nuclear bomb and has threatened to shut the strategic Strait of Hormuz, a major passageway for a fifth of the world's oil supply, if it is hit with further sanctions.

Source: http://www.google.com/hostednews/afp/article/ALeqM5ivqRQWneLPziBw9Hcy7JZ4zDmkIw?docId=CNG.d2c3c87306835015736c77280091565e.171