OPEC screws the Oil Speculators again. Told you so. NYAH, NYAH

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Monday June 19 4:52 PM ET

OPEC Set to Lift Output Again

By Richard Mably

VIENNA, Austria (Reuters) - OPEC bids this week to pull off a tricky balancing act by raising oil output enough to satisfy demands in the West for lower fuel costs without sending crude prices crashing.

Leading members of the Organization of the Petroleum Exporting Countries, including Saudi Arabia and Iran, believe oil now near $30 a barrel is damagingly high.

Riyadh now favors extra output of near one million barrels daily on top of the 24.7 million bpd assigned to 10 OPEC members.

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The betting is that Saudi Arabia, OPEC's top producer, will secure agreement among fellow members for a little under that sort of volume at a meeting which starts in Vienna on Wednesday.

OPEC delegates said late on Monday that leading producers now had a precise figure in mind that would fall short of a million barrels daily.

``It's not a million but it's closer to a million than 500,000 bpd,'' said one senior OPEC delegate.

Oil prices have remained stubbornly strong despite the seven percent increase in output sanctioned by OPEC last March after heavy pressure from its biggest customer, the United States.

``Saudi Arabia and the United States share the same goal -- they both want oil prices back down to $25 a barrel,'' said Roger Diwan of Washington's Petroleum Finance Corp.

Outside the cartel, Mexico and Norway also are expected to announce additional supplies, amounting to a few hundred thousand barrels a day.

The prospect of more oil to come has been enough to push crude prices sharply lower. U.S. light crude fell 64 cents a barrel to $31.69.

Keeping Washington Content

OPEC's task this week is not simple. Timely oil market data is notoriously unreliable and prone to hefty revisions.

While worldwide crude inventories remain low, industry data shows stocks are building quickly. Most dealers agree that crude prices would be lower were it not for new environmental rules this summer in the United States that have restricted the pool of American gasoline supply.

``There is no problem of supply,'' said OPEC President Ali Rodriguez on Monday. ``There is an intense problem of speculation especially in the United States because of the gasoline problem.''

``The Saudis are going to want to lift production because of their political concerns with the U.S.,'' said Gary Ross of U.S. consultancy Petroleum Industry Research Associates.

``But they have a legitimate concern that there is already plenty of crude available and that it is tightness in the U.S. gasoline market which is in part to blame for taking crude so high.''

The International Energy Agency in Paris estimates oil stocks in the 77 million barrels daily world market will rise swiftly by 2.2 million during the second quarter.

But OPEC also is worried that evidence is starting to mount that expensive oil has stunted demand growth among consumer nations.

The IEA has twice in recent weeks downgraded its projection for world oil demand in 2000, citing the impact of lofty prices on consumption.


OPEC is hoping to bring Iran back into the fold this time by securing Tehran's part in a new agreement.

Hojatollah Ghanimifard of the National Iranian Oil Company said on Saturday that Iran too thought prices should be lower and that his country would take its share of any increase in cartel production.

``The current increase in oil prices was beyond expectations. Nobody expected such an increase,'' said Ghanimifard. ``The main risk is that a substitute for oil may be found.''

Tehran in March opted out of the OPEC deal, complaining about interference in OPEC affairs from the United States, but upped output anyway.

OPEC must take some of the blame for prices which at their high point last week rose over $33 in the United States.

The cartel aggravated the market by deciding not to implement a mechanism, informally agreed in March, that was supposed to trigger 500,000 bpd of extra output when prices rose above $28 for a basket of its crudes.

Ministers now will have to wrestle again with an idea which has been criticized by some in the industry for increasing price volatility by attracting speculative trading to test OPEC's designated $22-$28 a barrel price band.

If they keep the mechanism, traders will be hoping that this time OPEC decides to write down the details of how it works.

-- cpr (buytexas@swbell.net), June 19, 2000


GAS PRICES ARE NOT "$2." or $2.50 across the board.

Monday June 19 5:10 PM ET

Retail Gas Price at Record for 4th Week

WASHINGTON (Reuters) - The U.S. average retail price for unleaded gasoline hit a record high for the fourth week in a row, soaring 5 cents from last week to $1.681 a gallon, the Energy Department's statistical agency reported on Monday.

The pump price is up 56 cents a gallon from a year ago, based on the Energy Information Administration's weekly survey of 800 service stations. The price is the highest since the EIA began tracking weekly fuel prices a decade ago.

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The price for gasoline has risen 16.2 cents over the last month because of high crude oil prices and tight supplies for gasoline during the summer driving season. The national price for cleaner burning reformulated gasoline is up 2.4 cents to $1.70 a gallon.

Midwest drivers continued to pay the most for fuel, with the price for conventional gasoline up 7.8 cents to $1.874 a gallon and reformulated gasoline up 3.1 cents to $2.003. While gasoline is above $2 in many cities, this is the first time that gasoline topped $2 a gallon for a specific region of the country.

The Gulf coast states had the cheapest fuel, up 4.3 cents a gallon to $1.519 for conventional gasoline, while reformulated gasoline jumped 4.2 cents to $1.514.

-- cpr (buytexas@swbell.net), June 19, 2000.

Which is worse, Yourdon etal Screaming there is a problem (when there was no problem) or CPR Screaming that there is no problem(when clearly something is amiss in the energy markets)????

What a delema!

-- It is (Tweedle@Dee.TweedleDumb), June 19, 2000.

Tweedle dum dum or WHATEVER YOUR NAME IS, if you WANT to CENSOR people go somewhere else this is the THE TB2000 UNCENSORED FORUM.

-- c.p.r. wannabe (ceeper@wanna.be), June 19, 2000.

Why say Tweedle was attempting to censor? I did not read that. They only asked a question. Tweedle, you have to watch for those who twist a post. In the South, the gas price has risen 30 cents a gallon from three months ago. They can blame it on vacation time. Who the hell started their vacation in March? Oh, I forget the Canadians. This must be their fault. But why, did the price increase only start with this year? Why did the price not rise beyond our eyebrows during last years "vacation months?". Did the Canadians skip their vacation last year? You continue to read, you decide.

-- Dead Dog (andstinkingto@highheaven.com), June 19, 2000.

Let's do a little math. 77 million barrels a day, going to 80,000,000. The current price of $33, vs. the "preferred" price of $28, a difference of $5, times 80,000,000 = $400,000,000.00 a day. So, for every 10 days that the "problem" continues, we spend an EXTRA 4 BILLION DOLLARS on oil.

How much do we need to spend, before we recognize it as a problem?


-- Sysman (y2kboard@yahoo.com), June 20, 2000.

Charlie, you seem to be on a crusade off late... who cares what the AWL suppliers say?... who cares what the AWL speculators say?... the fact IS !!!!!... prices are up and don't look to be going lower, no matter what your "meme" infected brain tells you... could you have possibly taken a Put possition in the AWL segment?

If so..... try selling these guys with your rants... who knows, you might even be able to influence the markets, just like you did Y2k :-)


Don't use my name... they don't know me as Netghost, and be sure to wear your flame proof Jammies...

-- Netghost (ng@no.yr), June 20, 2000.

AAA Daily Fuel Gauge Report:

-- How to (track@gasoline.prices), June 20, 2000.

Like I'm stupid enough to believe the "official" fuel prices?.... when I pay for them everyday?... you must think I'm as dumb as the creep !!!!...still $.55 a gallon more than this time last year... can you say DUH???r

-- Netghost (ng@no.yr), June 20, 2000.

Carlos, you really need to take a chill pill. Go deep sea fishin' or something cool like that.

Fuel prices are coincidence and have NOTHING to do with y2k.

btw, I'm only paying .20-.27 a gal more for fuel where I live.

It sucks to be you.

-- (get@life.willya?), June 20, 2000.

"Like I'm stupid enough to believe the "official" fuel prices?"

Like...you were stupid enough to dismiss the "official" statements of y2k and follow the doomidiots....look where it got you.


-- (get@life.willya?), June 20, 2000.

sorry, you just made that so damn easy!

(HINT: you should never talk about yourself and use the words "like I'm stupid enough...". Considering your track record....welllllll)


-- (get@life.willya?), June 20, 2000.

The price of gasoline nationally has increased from $1.15 to $1.63 per gallon during the past year. Current prices by state can be found at...

I'm concerned these rising prices will negatively impact the economy unless they come down soon.

-- How to (track@gasoline.prices), June 20, 2000.

Let's do a little math. 77 million barrels a day, going to 80,000,000. The current price of $33, vs. the "preferred" price of $28, a difference of $5, times 80,000,000 = $400,000,000.00 a day. So, for every 10 days that the "problem" continues, we spend an EXTRA 4 BILLION DOLLARS on oil.

How much do we need to spend, before we recognize it as a problem?


-- Sysman (y2kboard@yahoo.com), June 20, 2000. <<<<<<<

And what exactly is that *problem*?

-- Rob (celtic64@inficad.com), June 20, 2000.

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