The National Energy Policy Council (CNPE) of Brazil made an announcement of the decision during the recent Federal Register. The Libra prospect will be the first region set for auction. The prospect is estimated to hold a maximum of 16 billion barrels of recoverable oil according to local regulators. The National Petroleum Agency (ANP) of Brazil initially said that the bidding will happen in November.

The pre-salt bidding will occur after the nation’s recently successful sale of oil and gas exploration concessions which raised around 2.8 billion Brazilin reals, or $1.4 billion U.S. dollars, in signing bonuses. The auction’s acreage, the first of Brazil in almost five years, was sold under concession deals that provide oil firms control over exploration and development in exchange for royalties from natural gas and crude oil production.

The new regime of production sharing makes Petrobas, the country’s state-run energy firm, the operator of the pre-salt regions and gives them a stake of at least 30 percent. Auction winners will be based on the quantity of oil profit or crude produced, minus development costs, that firms consent to give to the government of Brazil.

The major pre-salt oil areas are in the Santos Basin, which is off-coast of the states of Sao Paulo and Rio de Janeiro. The formations are located below 2,000 meters of water and more than 5,000 meters of sand, salt and rocks.

On the NYMEX, the U.S. benchmark crude for delivery in June was 55 cents lower to $95.47 per barrel. The contract moved 86 cents higher to settle at a crude price per barrel of $96.02 during the last trading day of the past week.

The U.S. government will soon release April’s figures for home sales and durable commodities and HSBC will release its monthly poll on the manufacturing growth of China.

Moreover, analysts are waiting for the upcoming statement of U.S. Central bank chief Ben Bernanke. Of important interest is any probable indication that the Federal Reserve may be getting ready to cut back on its extremely loose financial policy since the latest data has signified a sustained recovery of the economy.

Markets will be closely watching for any signals of the possible move of the Fed, according to Singapore’s DBS Bank Ltd analysts in a market commentary.

On London’s ICE Futures Exchange, Brent, the benchmark used to assign prices to international varieties of oil, moved 56 cents lower to $104.08 per barrel.

In other energy trading on the NYMEX, the price of wholesale gasoline moved 0.9 cents down to $2.89 per gallon. The price of natural gas moved 8.7 cents up to $4.14 per thousand cubic feet. And the cost of heating oil moved 1 cent lower to $2.924 per gallon.

According to market analysts, operations in refineries are strong and higher gasoline demand is not expected to happen for several weeks yet. Meanwhile, stocks external to the Northeast are sufficient. Those factors, in combination with the recently low figures from China, explain the weaker demand for oil at the moment.

Further, the currently low prices of oil are not expected to go on for the entire summer season. That is because demand is anticipated to rise and issues at refineries can happen anytime. However, for the same reason, the current gasoline prices moving to $4 per gallon is not something considered highly likely at the moment. There is a greater likelihood that some of the regions throughout the United States may reach a high close to $4, but in its entirety, the nation will see lower rates at the pump.

In terms of wholesale traders’ prices, the low end of the market is not likely going to dip lower than $2.70 to $2.75 per gallon, which can happen if the best case scenario develops across all factors. However, a high wholesale rate of about $2.90 per gallon is possible in the coming months, a level that corresponds with a retail price that is still not that high compared to what most drivers have seen at the pump for the past months.

On the NYMEX, the U.S. benchmark crude for delivery in June was 49 cents lower, at $96.13 per barrel. During the previous trading day, the contract gained 1 cent to end at $96.62.

Prices were weak after two released oil supply reports reminded traders that inventories are sufficient.

According to the API, crude inventories gained 680,000 to 389.1 million barrels. The Energy Department, in a separate report, also said that the supplies of oil gained 200,000 barrels in the past week to 395.5 million barrels.

Even if the rise did not meet expectations, the steady growth in supplies presented that market fundamentals are not in favor of a lengthened rally in the prices of crude, according to a poll of market analysts.

The higher-than-expected figures of China’s inflation also pulled back the price of oil as it concerns the Fed that the increasing prices may slow down the second biggest consumer of oil in the world. Consumer costs rose by a yearly 2.4 percent during the month of April from 2.1 percent in March. That exceeded predictions of a 2.2 percent increase.

Markets are waiting for the upcoming report of the U.S. Labor Department on the unemployment claims in the past week, a primary measure of the economy’s health.

On London’s ICE Futures Exchange, Brent was 54 cents lower to $103.80 per barrel.

In other NYMEX trading, wholesale gasoline moved 1.52 cents lower to $2.8386 per gallon. Heating oil shed 0.34 cent to a price of $2.9113 per gallon. Natural gas fell 3.5 cents to a price of $3.943 per 1,000 cubic feet.

The Venezuelan government has formally notified its partner firms to step up oil production since 2010.  This is in line with the government’s grand design for oil firms to further invest in oil exploration in Venezuela and, eventually, boost oil output in the years ahead.

The oil minister stated that he has pinpointed about 10 firms who have underperformed throughout the past few years.  Almost half of this number might eventually get axed. He assured that he would make another attempt at pressing these firms to answer the government’s demand.  In the end, however, he still issued a warning to oil firms indicating that the issue will be presented to the country’s National Assembly if they remain below target.

When asked to identify the “precarious” four, he refused to give the details, but disclosed that these are small-scale operators whose individual oil output amount to 30 barrels per day or less, each.

According to Ramirez, the government has given ample time for these firms to rev up their production, but time is running out. Nonetheless, he encourages these companies to discuss the matter with his group as soon as possible.

He mentioned too that Venezuela’s bigger oil partners, the likes of China National Petroleum Corporation and Chevron Corporation, have acted in accordance with Venezuela’s appeal.  He says it’s time for the other partners to respond accordingly.

Chevron aims to further expand its investments in Venezuela and has been continually holding talks with the country’s top officials to bring production in Carabobo 3 up to full commercial scale. Carabobo is one among the 23 states of Venezuela located in the northern part of the country.

Meanwhile, oil companies which strongly opposed the late Hugo Chavez’s unreasonable contract adjustments prefer to put off plans to increase oil investments in the country, choosing instead to test if the current head of state will prove to be more diplomatic than his predecessor.