OT>>(Oil Topic) Crude Prices approach $30 a Barrel

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Crude Prices approach $30 a Barrel

Crude oil prices moved within striking distance Thursday of $30 a barrel -- a price not seen since 1991 -- on heightened concern that fast-shrinking inventories could soon result in shortages of refined products.

Heating oil couldn't keep up the same torrid pace, sagging on signs of increased imports and milder weather in the Northeast that may end weeks of price runups.

In other markets, both wheat and gold rallied strongly.

Oil climbed more than 2 percent on the New York Mercantile Exchange, with the March contract rising 66 cents to $29.43 a barrel. With a repeat performance, the price would surpass the nine-year high of $29.95 reached in intraday trading Jan. 20 and top $30 for the first time since the eve of the Gulf War.

With inventories extraordinarily tight and refineries running at only 85 percent of capacity, the lowest rate since 1993, analysts say there's little resistance to keep prices from surging further.

``It's going to go through $30 like a hot knife in butter,'' said Bill O'Grady, energy analyst for A.G. Edwards & Sons Inc. in St. Louis.

Oil's rise may be slowed if OPEC nations increase production when a nearly year-old agreement limiting output runs out next month. But the market is increasingly concerned that the extra production still won't erase the supply crunch for oil and gasoline as the summer driving season gets closer.

Underpinning the rally Thursday was Iraq's statement that it won't allow a United Weapons inspection team into the country to restart disarmament activities. An impasse with the West could result in Iraq halting its daily supply of 1.5 million to 2 million barrels to the world market.

``They can cause a lot of havoc right now if they decide to pull the oil card again with supplies as tight as they are,'' said Phil Flynn, senior markets analyst at Alaron Trading Corp. in Chicago.

The last time Iraq stopped pumping oil, in November, it prompted a rally in crude oil futures. -snip-

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-- Dee (T1Colt556@aol.com), February 10, 2000

Answers

Remember the little snipit about Sadamm being invited to OPEC's little shindig a while back? I'm begining to wonder if Saddy really has figured out how to work with the Arabs.

How's this for a scenario, OPEC meets and loosens the cuts by oh say 300 to 500 per day and meantime Saddy cuts off at least 500 per day? Yeah, pretty sweet for the chic desert set.

-- Gordon (g_gecko_69@hotmail.com), February 10, 2000.


Gordon,

I have to wonder how long it's going to be before we just go in and TAKE the f*cking oil fields from the Arabs. We are already so far along on the path of empire building that I can't imagine the US public would even blink an eye and we certainly have the military capacity to do it.

Saddam might still be in office but we kicked ass in Desert Storm and you can bet the rest of the Arab world was watching. Remember that once the ground war began there so many Iraqi soldiers surrendering that we didn't know where to put them. Think it would be any different today? I don't.

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), February 10, 2000.


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