Saudi cuts Europe&Asia by 35-40%

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Here's some news from Downstreamer's forum re cuts to Europe and Asia:

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Author Comment meg Unregistered User (2/13/00 1:06:26 am) Reply Now Saudi's are cutting Europe's oil by 35-40%...

Canadian Natural Gas Storage Report Crude Oil News Natural Gas News

http://www.canoe.ca/MoneyOil/mw_oilnews2.html

Saturday, February 12, 2000 Last updated: 00:37 EST Oil & Gas News

Saudi tightens rein on oil supplies to west By KERM YERMAN Oil power Saudi Arabia has kept the pressure on its customers in the West by tightening supplies for March, oil traders said on Friday.

Already gasping for supply, European crude customers were hit by news that they will receive between 35 and 40 percent less than standard contract volumes in March, compared with cuts of between 30 and 35 percent in recent months, traders said.

U.S. lifters will get around 25 percent less crude than standard contract volumes next month against cuts of around 21-23 percent in recent months, the traders added.

The surprise move sent world benchmark Brent hurtling above $28 a barrel for the first time in nine years as tough producer supply limits drain consuming countries' stocks of spare oil to record lows.

Saudi Arabia's tough new stance comes in the last month formally affected by a year-long producer deal pledging to cut over five million barrels per day (bpd) of supply to revive ailing prices.

Customers were taken aback by the deeper March cuts. "We had no inkling that this was coming and can't for the moment see what the explanation is," said one. Some speculated that it might reflect higher heavy crude runs at some Saudi refineries.

Oil traders were scrutinising the move for clues on whether the OPEC cartel will relax its supply curbs when the restraint deal formally expires at the end of March.

Saudi Arabia, the world's biggest producer and key OPEC policymaker, is supposed to cut 1.31 million bpd, 15 percent of its output as part of the pact.

Producers have not yet decided whether to leave restraints in place after March or increase supply.

March Saudi exports to Asia could not immediately be confirmed but traders said reductions seem to have been held steady at between 12 and 17 percent below contract volumes.

Deepest cuts were on heavy grades, with more lenience on the lighter crudes. Lifters that requested more heavy grades had been cut by up to 40 percent overall in Europe, traders said.

The International Energy Agency had already sharpened supply worries on Friday by saying that industry stocks across the industrialised world were drawn sharply at the end of last year and are being sucked down even faster now.

Petroleum inventories held in the Organisation for Economic Cooperation and Development (OECD) countries were reduced by 2.7 million barrels a day in December, the largest draw since February 1994, the IEA said in its monthly Oil Market Report.

dickmoody Global user (2/13/00 1:53:31 am) Reply Re: Now Saudi's are cutting Europe's oil by 35-40%...

Sounds like Y2K to me.



-- jeanne (jeanne@hurry.now), February 13, 2000

Answers

Jeanne

Could you please post the link to Downstreamers. I Lost my bookmarks....

-- kevin (innxxs@yahoo.com), February 13, 2000.


Link to Downstreamer Forum

Ray

-- Ray (ray@totacc.com), February 13, 2000.


What I find interesting here is the fact that this rollback is ONLY for the month of March. What do they intend to do in April and beyond?

Ray

-- Ray (ray@totacc.com), February 13, 2000.


It's my guess that they will announce month-by-month what amounts of oil will be available on their contracts. When they start honoring the full contract, maybe that means that they have their production,transportation,ports, etc "fixed". They are not stupid people. Surely they cannot believe it is in their interests to:

l. cause a worldwide depression/recession 2. cause all developed countries to spend ENORMOUS amounts of capital on alternate energy sources....and/or make it economical to develop previously less profitable energy sources domestically.

-- jeanne (jeanne@hurry.now), February 13, 2000.


Jeanne I do believe you have hit the nail on the head. I think we are all in for some real lifestyle shocks in the coming months.

-- David Whitelaw (Dande53484@aol.com), February 13, 2000.


How does one define depression. My personal definition is as follows: Early in the Fall of `99, I was advised on a wonderful (in retrospect) investment opportunity. The advice was to purchase March 2000 crude oil call option contracts. At the time, crude oil was approaching $16/barrel and the option "strike price" was $19. The cost per contract was around $450. Though at the time I indeed had the money, I opted for an alternative investment. Just another missed opportunity. There will always be more,indeed.

-- NoJo (RSKeiper@aol.com), February 13, 2000.

Jeanne:

You are right, and of course .gov is simplying blaming the Saudis for something out of their control just so .gov doesn't have to face the music at home about y2k not being a non-event. But what I am wondering about is where are the similar statements from the other oil producers, not only from the mid east but elsewhere? By Saudi making the statements on their own they are setting themselves up to have the finger pointed at them. I would have expected OPEC to produce a united front if the problems are universal. Are just the Saudis having y2k problems in the oil industry, or is it nothing to do with y2k?

-- Interested Spectator (is@the_ring.side), February 13, 2000.


The only way to fight the Saudy's is to charge them a surcharge as they purchase their new American cars, etc. etc.

-- ... (...@...com), February 13, 2000.

Really? What makes you think they'll continue to purchase American consumer goods because of a surcharge, when they can get equivelant goods elsewhere?

-- Interested Spectator (is@the_ring.side), February 13, 2000.

I am just a lurker becasue I have no intelligent information to contribute, but I really enjoy this forum. All of you that share information are helping make many of us more informed

-- Jean Raboine (jcrow@execpc.com), February 13, 2000.


NoJo, just out of some sick need to know how much money I didn't make on certain futures investments I could have made, can you tell me what those $450 contracts are worth now?

-- curious (curious@ndwondering.com), February 13, 2000.

Could be cover, the .gov letting OPEC take credit for rising prices while they fix production problems. .Gov has little choice, squeezing the Saudi's could easily push the regime away from the US. Plus the admin gets a scapegoat. everyone wins, right.

-- Squid (ItsDark@down.here), February 13, 2000.

squid:

you said:

[squeezing the Saudi's could easily push the regime away from the US]

How does US win by doing this?

What about the reset of OPEC why are they not making announcements? Are they not having problems? If not why are the Saudis?

-- Interested Spectator (is@the_ring.side), February 14, 2000.


Here's a Link towards Saudi info. Perhaps you'll be able to find some interesing info there?

-- Deb M. (
vmcclell@columbus.rr.com), February 14, 2000.

Sorry, most of the links on my last link were outdated. Here's a website that's still active, and has an ongoing Saudi forumn:

Link

-- Deb M. (vmcclell@columbus.rr.com), February 14, 2000.



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