Crude above $33 : LUSENET : TB2K spinoff uncensored : One Thread

Tuesday March 7, 11:16 am Eastern Time

NYMEX crude rises above $33 on tight supply fears

NEW YORK, March 7 (Reuters) - Crude oil futures on the New York Mercantile Exchange (NYMEX) traded early Tuesday above $33 a barrel for the first time since November 1990, spurred by anxieties over tight crude supplies, traders said.

After hitting the $33 mark 10:16 a.m. (1516 GMT) crude for April delivery quickly jumped to $33.10, the the best front month crude has seen since November 29, 1990, when it peaked at $33.75.

At the early peak, the highest since after Iraq invaded Kuwait in August of 1990, April crude has risen 92 cents or almost three percent from Monday's settlement of $32.18, continuing a bullish run underpinned by a rift between hawks and doves among major producers.

Just less than three weeks ago, NYMEX crude was trading below $30. It has rapidly risen as supply continues to tighten globally. In the U.S., crude oil inventories are at their lowest in about 24 years.

On Tuesday, Brent crude traded on the International Petroleum Exchange (IPE) in London traded above $30 a barrel for the first time since 1991 amid continued price uncertainty.

Crude supplies are low because supply curbs instituted by OPEC and its non-OPEC allies Mexico and Norway since March 1998 have drained global oil flow by more than four million barrels per day.

With pressure mounting from consumer nations such as the United States, the world's biggest market for oil, producers have shown little sign that they have come up with a consensus on what needs to be done after the supply curbs expire at the end of the month.

On Monday, price hawks Iran, Libya and Algeria questioned the need for increasing production in the second quarter, after current supply restrictions expire. They expected demand to drop by about 3.0 million barrels during that quarter, making any increase unreasonable, they said.

Just last week, OPEC's ministers from Saudi Arabia and Venezuela and their counterpart from non-OPEC Mexico said they recognized the need for more oil supply, but said they needed time to decide on the size and the timing of any increase.

Early Monday, the head of the International Energy Agency (IEA), the West's energy watchdog, urged oil producers to raise output from April 1.

``There is no sign at present that it will be possible to rebuild stocks at the ened of this year even to the low levels of the end of 1999,'' said IEA Executive Director Robert Priddel in an energy conference in Abu Dhabi.

``You have to go back to the situation before February 1998 to get stocks at the end of 200 at the level at the end of 1999 and you have to do that from the first of Apri,'' he said.

Traders said they expeced little respite from high prices unless OPEC, whose ministers are meeting on March 27 to tackle the issue, decides to ratchet oil supply by a significant amount.

Traders had previously ignored suggestions that oil producers, in an effort to prevent prices from crashing, would gradually increase oil supply, beginning with about 1.2 million barrels per day (bpd) and then add 500,000 bpd later if the impact of the first increase doesn't moderate prices.

``The market needs more than that to replenish stocks,'' said a NYMEX floor trader. ``Otherwise we will see prices move even much higher.''

-- - (, March 07, 2000


We are wading into deep, deep doo-doo.

-- (, March 07, 2000.

And climbing!!!!!

-- - (, March 07, 2000.

Sounds like another nail in the stock market's coffin. (Rising prices, more layoffs, less $$$ - good short-term for the market, but not long-term, if an uncontrolled descent.) IMO, sooner or later, there are going to be too many negative variables putting pressure on NASDAQ, etc. I hope Greenspan has a big catcher's mitt.

-- Deb M. (, March 07, 2000.

More meetings scheduled...


Some are calling for foreign aid packages to be rescinded until the oil prices come down... I wonder what will work?

-- Deb M. (, March 07, 2000.

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