-- Possible Impact (posim@hotmail.com), February 11, 2000

Answers

NYMEX oil ends near flat after output rise signals Link NEW YORK, Feb 11 (Reuters) - Crude oil futures on the New York Mercantile Exchange (NYMEX) finished near flat Friday after Gulf and Venezuelan sources signalled that OPEC would decide to raise output, possibly by the first half of the year. NYMEX crude for March delivery settled at $29.44 a barrel, up one cent on the day. In the first half hour of trading, the contract rallied and edged close to $30 and posted a high of $29.94, just a cent off the nine-year peak of $29.95 on January 20. March gasoline struck a fresh nine-year high of 82.95 cents, up 1.20 cents but later dropped in sympathy with crude. It finished at 81.06, down 0.69 cent. It moved as low as 80.50 cents. March heating oil futures ended at 74.24 cents a gallon down 0.22 cent, after trading between 73.30/75.50 cents. In London, March Brent crude last traded at $27.84, cutting down the day's gains to 36 cents. The market earlier in the day soared to a fresh nine-year high of $28.20. The market's rallied at the opening after the Paris-based International Energy Agency (IEA) said that world inventories were drained sharply at the end of last year and their depletion was accelerating due to export limits imposed by OPEC and non-OPEC producers such as Mexico and Norway. Support also sprang from news that Saudi Arabia, the world's largest oil supplier, tightening supply to Europe and the United States for March, traders said. However, the rally stalled after a Gulf source said that if U.S. West Texas Intermediate (WTI) crude hits $30 and stays there, producers would increase production. "If prices continue heating up then we (oil producers) have to do something," the source told Reuters, adding that would mean increasing production at the end of March "if WTI hits $30 and persists there." The source also said Saudi Arabia, Venezuela and Mexico, the chief architects of producers' output cuts, would meet in Europe in the first week of March as a prelude to a full conference of OPEC oil ministers on March 27 in Vienna to decide on future output policy. Later, in the afternoon, Venezuelan sources said OPEC would likely to agree in March to progressive increases in its production quotas starting the first half of his year. One of the sources said the cartel was considering a decision to ratchet output by 1.7 million barrels per day from June and then consider in September another 500,000 to 1.0 million bpd increase for the last quarter of the year, depending on the market's reception of the first increase. In between the headlines, the market attempted to recover, but did not have the stamina to hold on to gains. "The day's headlines were sell signals," said a NYMEX floor trader. However, traders and analysts stressed that with oil inventories at their lowest in decades, the market could move ahead next week. The market's response to bearish news from OPEC would be temporary, they said. "Market fundamentals are sufficiently strong to push this market up," said Jim Ritterbusch, president of Ritterbusch and Associates, a trader for Sweeney Oil in Chicago. (With settlement prices) NEW YORK, Feb 11 (Reuters) - Crude oil futures on the New York Mercantile Exchange (NYMEX) finished near flat Friday after Gulf and Venezuelan sources signalled that OPEC would decide to raise output, possibly by the first half of the year. NYMEX crude for March delivery settled at $29.44 a barrel, up one cent on the day. In the first half hour of trading, the contract rallied and edged close to $30 and posted a high of $29.94, just a cent off the nine-year peak of $29.95 on January 20. March gasoline struck a fresh nine-year high of 82.95 cents, up 1.20 cents but later dropped in sympathy with crude. It finished at 81.06, down 0.69 cent. It moved as low as 80.50 cents. March heating oil futures ended at 74.24 cents a gallon down 0.22 cent, after trading between 73.30/75.50 cents. In London, March Brent crude last traded at $27.84, cutting down the day's gains to 36 cents. The market earlier in the day soared to a fresh nine-year high of $28.20. The market's rallied at the opening after the Paris-based International Energy Agency (IEA) said that world inventories were drained sharply at the end of last year and their depletion was accelerating due to export limits imposed by OPEC and non-OPEC producers such as Mexico and Norway. Support also sprang from news that Saudi Arabia, the world's largest oil supplier, tightening supply to Europe and the United States for March, traders said. However, the rally stalled after a Gulf source said that if U.S. West Texas Intermediate (WTI) crude hits $30 and stays there, producers would increase production. "If prices continue heating up then we (oil producers) have to do something," the source told Reuters, adding that would mean increasing production at the end of March "if WTI hits $30 and persists there." The source also said Saudi Arabia, Venezuela and Mexico, the chief architects of producers' output cuts, would meet in Europe in the first week of March as a prelude to a full conference of OPEC oil ministers on March 27 in Vienna to decide on future output policy. Later, in the afternoon, Venezuelan sources said OPEC would likely to agree in March to progressive increases in its production quotas starting the first half of his year. One of the sources said the cartel was considering a decision to ratchet output by 1.7 million barrels per day from June and then consider in September another 500,000 to 1.0 million bpd increase for the last quarter of the year, depending on the market's reception of the first increase. In between the headlines, the market attempted to recover, but did not have the stamina to hold on to gains. "The day's headlines were sell signals," said a NYMEX floor trader. However, traders and analysts stressed that with oil inventories at their lowest in decades, the market could move ahead next week. The market's response to bearish news from OPEC would be temporary, they said. "Market fundamentals are sufficiently strong to push this market up," said Jim Ritterbusch, president of Ritterbusch and Associates, a trader for Sweeney Oil in Chicago. ) copyright 2000 Reuters, Ltd.

Oops, [/table] didn't make it with the copy...

-- Possible Impact (posim@hotmail.com), February 11, 2000.

did this fix it?(hope so...)

-- Possible Impact (posim@hotmail.com), February 11, 2000.

*RPT- RICHARDSON CANCELS TRIP NEXT WEEK TO MEET VENEZUELAN OIL MINISTER - DOE WASHINGTON, Feb 11 (Reuters) - U.S. Energy Secretary Bill Richardson's planned trip next week to meet with Venezuela oil minister Ali Rodriguez has been canceled, an Energy Department official said on Friday. "The Venezuela trip is now off," the official said, who did not explain why the trip was canceled or if it would be rescheduled. Richardson had planned to travel to Venezuela on Feb. 18 to discuss volatility in the world oil market. (Washington Energy Desk, 202-898-8320)

-- Possible Impact (posim@hotmail.com), February 11, 2000.

You should have seen all the headlines today. First it was the Vens with "OPEC cuts to target a million bbls" "OPEC won't let US oil stocks reach a real shortage..." blah blah blah. Then it was a case of the Columbians entering the fray with Ecopetrol signaling that it had termed up a lot of barrels to customers. Looked like a Bill Richardson hit parade for a while there.

When I first came in this morning Brent was trading quite a bit higher and TI was higher in access. They were up by about 50 cts ech. That was primarily in response to the news that the Saud's had informed their term customers that their March term contracts would be cut by a lot more than they already are. Read the headline for yourself. It's pretty bullish. Let me say that again for those who aren't familiar with these concepts. The Saudis sell crude on long term contracts to European and US refiners. Let's say I'm a refiner in the US who likes to run Arab Medium at my refinery. I meet with the Sauds and set up a contract to recieve X amount of barrels per day over a one or two year period. Well it seems the Sauds are cutting these contracts by quite a bit. For instance Arab Heavy to Europe was cut by as much as 40% for March deliveries. That's a hefty cut in term barrels if you're a refiner. So regardless of what some Latinam dictator (who's between a rock [opec] and a hard place [USA]) says, and regardless of what Bill Richardson would like to say, we're quite hosed by these developements. The Saud's aren't playing nice with us anymore. Bill Klintoon's legacy is in doubt. Or perhaps there REALLY WERE SOME SUPPLY DISRUPTIONS IN SAUDI LAND!

After all, I can buy the Saud's sticking it to us in the press and letting us twist a little about the March meeting to make up for two years ago. I can even buy them not raising production more than 500- 700 per day (that's my official best case March outcome). But I am having a rather hard time believing that they're willing to throw sand in our face with the term contracts. That's a no-no.

I don't believe they would've done that unless A)I have miscalculated the enmity we engendered with our economic disregard last year or B) they really do have some supply problems. Only time will tell....

On a different note, here's a public plea to Bill Richardson to stop making an ass of himself and us at the behest of the Oral Orifice. Jesus dude, tone it down a bit. We all know that you're like the new guy in cell block D who has been asked to pick up the soap and suddenly finds himself alone in the shower with some big mean wood staring him down....but shut up and just do your time. You don't have to announce to the world that we're being boned from behind. These headlines are only making it worse....and criticizing the Arabs is just plainf*cking dumb! What school of international policy did you attend? Have you really thought this through?

For educational and research perps only:

Friday February 11, 4:23 pm Eastern Time Richardson criticizes Saudi cuts in oil to U.S. WASHINGTON, Feb 11 (Reuters) - U.S. Energy Secretary Bill Richardson criticized Saudi Arabia's decision to reduce its crude oil deliveries to the United States by 25 percent in March, saying on Friday that it was a move in the wrong direction.

``First, from a volume standpoint, this is not a major change from what the Saudis have been delivering,'' Richardson said in a statement. ``Having said that, this action by the Saudis represents a firm step in the wrong direction.''

This is the strongest language Richardson has used in public so far to criticize Saudi Arabia -- the most influential member of the Organization of Petroleum Exporting Countries (OPEC). His remarks come amid pressure from Congress for the Clinton administration to get tougher with OPEC and its policy of lower oil output.

``The U.S. market needs more (oil) supply, not less,'' Richardson said. ``I urge -- in the strongest terms -- that all oil producing nations recognize that the world needs more oil, not less, and needs it sooner rather than later,'' he added.

Richardson said the European Union also agreed that world oil production should be increased, and he pointed out that Mexico's energy minister Luis Tellez ``recognizes that there is a legitimate concern in the U.S. that high (oil) prices affect economic growth''.

Richardson is scheduled to travel to Mexico next week to discuss volatility in the oil market. He will then begin a trip to the Middle East, where he will stop in Saudi Arabia and Kuwait to hold similar discussions.

His planned trip next week to meet Venezuela's oil minister Ali Rodriguez has been cancelled, an Energy Department official said. The official did not provide any reason for the cancellation, or whether Richardson's visit would be rescheduled.

(-Tom Doggett, Washington Energy Desk, 202-898-8320

FOCUS-OPEC mulls supply hike June-Venezuela source (Reuters) (Eds: recasts with more details and background) By Tom Ashby CARACAS, Feb 11 (Reuters) - Venezuelan sources familiar with oil policy said Friday the Organization of Petroleum Exporting Countries (OPEC) is likely to agree in March to an easing of export curbs, starting in the first half of this year. Faced with world oil prices at nine-year highs and global stockpiles dropping fast, the cartel is studying a proposal to return 1. - Feb 11 6:08 PM EST

FOCUS-Oil sets new high, eases on producer signals (Reuters) (Adds Venezuelan comments para 5, updates prices) LONDON, Feb 11 (Reuters) - Oil prices leapt to fresh post-Gulf War highs on Friday after Saudi Arabia deepened export cuts and the International Energy Agency warned consumers of a worldwide scramble for supply. Benchmark Brent crude comfortably hurdled $28 a barrel for the first time in nine years to a peak of $28. - Feb 11 4:44 PM EST

Oil Sets New High (Reuters) Oil prices leapt to fresh post-Gulf War highs on Friday after Saudi Arabia deepened export cuts and the International Energy Agency warned consumers of a worldwide scramble for supply. - Feb 11 4:24 PM EST

Richardson criticizes Saudi cuts in oil to U.S. (Reuters) WASHINGTON, Feb 11 (Reuters) - U.S. - Feb 11 4:22 PM EST

Richardson criticizes Saudi cuts in oil to U.S. (Reuters) WASHINGTON, Feb 11 (Reuters) - U.S. - Feb 11 3:50 PM EST

Alert: Richardson Calls Saudi Oil Cut to Us in March "Firm Step in the Wrong Direction" (Reuters) (This is a headline-only alert, although it will likely be followed by an article soon) - Feb 11 3:26 PM EST

FOCUS-Oil sets new high, eases on producer signals (Reuters) (updates throughout) LONDON, Feb 11 (Reuters) - Oil prices leapt to fresh post-Gulf War highs on Friday after Saudi Arabia deepened export cuts and the International Energy Agency warned consumers of a worldwide scramble for supply. Benchmark Brent crude comfortably hurdled $28 a barrel for the first time in nine years to a peak of $28. - Feb 11 1:26 PM EST

Alert: Saudi, Venezuela, Mexico Oilmins Due to Meet in Europe First Week March-gulf Source (Reuters) (This is a headline-only alert, although it will likely be followed by an article soon) - Feb 11 10:06 AM EST

Oil Jumps Over $28, New Nine-Year High (Reuters) Oil prices leapt to fresh post-Gulf War highs on Friday after Saudi Arabia deepened export cuts and the West's energy watchdog warned consumers of a worldwide scramble for supply. - Feb 11 7:36 AM EST

Brent crude breaks $28 for new nine-year high (Reuters) LONDON, Feb 11 (Reuters) - London Brent crude oil futures sped to $28 a barrel for the first time in nine years on Friday after the International Energy Agency warned that the decline in lowly petroleum inventories was accelerating. A tightening of supply to Europe and the United States for March by Saudi Arabia, the world's leading supplier, also gave prices a push higher. - Feb 11 6:29 AM EST

-- Gordon (g_gecko_69@hotmail.com), February 11, 2000.

Gordon,

I know how much time and effort this kind of post takes. I just want you to know I REALLY apppreciate it.

Todd

-- Todd Detzel (detzel@jps.net), February 11, 2000.

Gordon-- I also appreciate your info(and your writing style!)I've got some April $30.00 strike options, and today was such a big teaser! Thanks Gordon and Possible Impact for your posts.

-- dory (crtwheel@eburg.com), February 11, 2000.

Gordon,

Excellent and informative post. Many thanks. Appreciated the commentary about how incredibly stupid Bill Richardson is.

-- trafficjam (road@construction.ahead), February 12, 2000.