Oil prices surge again despite OPEC's move to raise output

-- The emperors new clothes (supply_is_down@prices_r_up.com), September 11, 2000

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Try this link instead: Oil prices surge again despite OPEC's move to raise output

-- The emperors new clothes (supply_is_down@prices_r_up.com), September 11, 2000.

Monday September 11 4:25 PM ET OPEC Pact Fails to Calm Oil Price Scare

By Richard Mably

VIENNA (Reuters) - Oil consumers were left fretting Monday that worse may still be to come for fuel bills this winter after OPEC's weekend pact releasing more supplies failed to contain an explosive rally in world crude prices.

Dealers worried about low inventories sent oil racing to highs not seen since the 1990 Gulf crisis despite Sunday's OPEC deal that raises cartel output by three percent.

OPEC had been hoping its extra oil would quell an international outcry over high energy bills amid worries that accelerated inflation could dent world economic growth.

But cartel ministers admitted Monday that prices now could be running out of control.

``We are approaching a crisis of great proportions because oil production capacity is reaching its limit,'' said OPEC's President, Venezuelan Oil Minister Ali Rodriguez.

``I don't think prices are going to get there now but they could rise to $40 depending on the winter,'' he added.

``This is all OPEC can do,'' said Iranian Oil Minister Bijan Zanganeh. ``All the tools are not in our hands.''

The Organization of the Petroleum Exporting Countries lifted output by 800,000 barrels daily to 26.2 million barrels a day. OPEC ally Mexico said it would add another 200,000 barrels daily later this year.

Brent blend futures rose 84 cents to $33.60. U.S. crude was catapulted to $35.14, up $1.51 a barrel.

``This just goes to show how little power OPEC really has over oil prices at the moment,'' said Gary Ross of New York's Petroleum Industry Research Associates.

``There's a feeling that whatever OPEC does there's not going to be enough oil this winter,'' added Nigel Saperia of European trading house Glencore.

Saudi Unhappy, U.S. May Use Reserves

Saudi Oil Minister Ali al-Naimi said he was ``not happy'' with the market's reaction. ``We said before we intend to bring the price down and we will bring it down. We want the price at $25 a barrel,'' he told OPEC lobby reporters.

If prices fail to react favorably soon for consumers the United States could use its huge Strategic Petroleum Reserve for the first time since the Gulf crisis.

``We see a better than 50 percent chance of Washington releasing oil from the SPR,'' said Ross.

The OPEC pact, effective from October 1, will depend largely on the group's leading producer Saudi Arabia to provide extra crude. Most others in the cartel already are pumping to capacity.

``The question remains, exactly how much fresh oil is going be to put in the market and how fast it will come,'' said Klaus Rehaag, head of the International Energy Agency's oil market division in Paris.

``Given what they're already producing it's not necessarily going to put a huge amount of fresh oil into the market.''

Western consuming nations gave OPEC's deal a cautious welcome. A White House spokesman said: ``Whether this will be effective and will be enough to stabilize the market remains to be seen.''

Germany's Deputy Economics Minister Siegmar Mosdorf called the extra supply ``a step in the right direction,'' but warned that crude needed to fall to nearer $25 before his country's economy would benefit.

India, a large importer of Middle East OPEC crude, said it would have liked more. Japan said it remained worried that America's low heating oil stocks would keep prices on the boil.

``Whether this will be effective remains to be seen in view of very low heating oil stocks in the United States heading into the winter season,'' said Keiichiro Okabe, president of the Petroleum Association of Japan.

British Pumps Run Dry

OPEC's call on importing nations to help ease the burden on consumers by reducing taxes have fallen mostly on deaf ears.

In Europe, where tax and duty make petrol and diesel among the world's dearest, fuel protest blockades that started last week in France rippled into Belgium and Britain.

Five of nine British refineries were blocked by pickets and oil companies said thousands of petrol stations had run dry.

British Prime Minister Tony Blair said: ``The sensible way, indeed the only right way, to deal with this problem is to put pressure on OPEC itself, not to let them off the hook by caving into blockades here.''

Producers will review output again at an extraordinary meeting on November 12 but have very little room now to maneuver on more supply.

Saudi Arabia's official OPEC quota rises 260,000 bpd to 8.51 million barrels a day. A large dose of leakage already has it pumping well in excess of that allocation but insiders said Riyadh has promised the United States it would take supply above nine million bpd.

``At the end of the day it's all about what Saudi Arabia will actually produce,'' said Ross.

OPEC Secretary-General Rilwanu Lukman said: ``OPEC won't wait until November if prices get out of hand again.''

Analysts are not so sure.

``There's less than a million barrels a day of spare capacity available right now,'' said Ross.

``There are no shock absorbers, if there any significant supply losses the market would run into a capacity wall.''

OPEC's latest deal means it has lifted supply this year by 3.2 million barrels per day, a 14 percent increase, restoring most of the curbs dating back to 1998 when crude slumped briefly below $10 a barrel.

http://dailynews.yahoo.com/h/nm/20000911/bs/energy_opec_dc_29.html

-- Cave Man (caves@are.us), September 11, 2000.

BS CUBED. OPEC IS JUST PLAYING WITH THE "AWL EXPERTS". As soon as they've sold enough oil at this high price, they'll LOWER THE BOOM ON ALL THE "EXPERTS". JUST LIKE BEFORE.

-- CPR (buytexas@swbell.net), September 11, 2000.

I'm curious, cpr, just how OPEC will "lower the boom" on the oil experts when even OPEC is finally admitting it's nearly at capacity, when there's no excess tanker capacity to move it, when there's no excess refinery capacity to refine it? Please tell us. We want to believe.

-- Curiouser (just@curious.com), September 11, 2000.

BS CUBED. OPEC IS JUST PLAYING WITH THE "AWL EXPERTS". As soon as they've sold enough oil at this high price, they'll LOWER THE BOOM ON ALL THE "EXPERTS". JUST LIKE BEFORE.

Just like before? You have a short memory, CPR. The last time you used this line of reasoning (Aug. 5), you were very wrong.

http://hv.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=003deR

Monday and Tuesday after the OPEC traders have sold enough at 30, you will get another announcement and the price of crude will resume its downward trend.

SUCKERS.

-- cpr (buytexas@swbell.net), August 05, 2000.

Since your prediction, CPR, crude oil has risen from $30 to $35 per barrel.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Bloomberg% 20Energy&touch=1&T=energy_news_front.ht&s=AOb2vCxTMQ3J1ZGUg

Tue, 12 Sep 2000, 1:59am EDT

09/12 00:20 Crude Oil Rises as OPEC Output Increase Seen Short of Demand

By Stephen Wisenthal

Tokyo, Sept. 12 (Bloomberg) -- Crude oil rose to near a 10- year high on speculation OPEC didn't boost output targets enough at a weekend meeting to supply growing demand from world energy consumers.

OPEC's increase of 800,000 barrels a day, or 3.2 percent, won't be enough to meet rising consumption in Asia and replenish low supplies 0in developed nations, said analysts. Oil has already rallied 37 percent this year.

``With inventories as low as they are going into the Northern Hemisphere winter, any disruption, cold snap (will make) oil prices rise quite dramatically,'' said Paul Ashby, an oil and gas analyst at ABN Amro Australia Ltd. in Sydney.

Crude oil for October delivery rose as much as 14 cents, or 0.4 percent, to $35.25 a barrel in after-hours electronic trading on the New York Mercantile Exchange. During floor trading, it gained 4.5 percent, to $35.14, after touching $35.85, the highest price since November 1990, during the Persian Gulf War.

Consumers will face higher prices and restricted supplies if oil production capacity isn't increased and refineries don't make more petroleum products, said Ali Rodriguez, the president of OPEC and Venezuela's oil minister.

``The world is facing a possible energy crisis, and OPEC alone simply doesn't have the power to control it,'' he said. ``There isn't a big risk in the short term, but we could see $40 oil if there's a cold winter,'' Rodriguez told reporters after the end of the Vienna OPEC meeting.

Futures trading on the Nymex showed traders don't expect OPEC's stated target of $25 a barrel will be reached any time soon. Crude for delivery in April 2001 remains above $30. It fell 36 cents, or 1.2 percent, to $30.70 in after-hours trading.

``We've increased our forecast to a $30 full-year average,'' said Ashby. The average so far this year is $29.43, compared with $19.33 for all of 1999.

Non-OPEC Oil?

Non-OPEC producers, which pump 60 percent of the world's oil, will raise daily output by 670,000 barrels during 2001, after adding 1.3 million barrels this year, the International Energy Agency forecast last month.

The increases next year will be led by the former Soviet Union, Mexico, Canada and Brazil, the Paris-based forecaster for 25 oil- consuming countries said.

Still, with almost all oil producers except Saudi Arabia producing at full capacity, there is limited scope for production to rise further.

Oil companies, still recovering from the shock of $10 oil prices less than two years ago, haven't increased their exploration budgets much yet, said Ashby.

``No-one is spending much money in a global sense on exploration,'' he said. This reduces the chance of discoveries big enough to lift oil production any time soon.

Soaking Up Oil

World oil consumption will rise 1.1 million barrels a day this year, and 1.9 million barrels in 2001, the IEA said.

Asian countries, which consume about 27 percent of the world's oil, are expected to account for more than half of the increase in oil demand over the two years, the agency said. The region's oil demand is predicted to rise 3.6 percent this year, and 4.1 percent next year.

Australian oil company shares rose on expectations crude prices will remain close to 10-year highs. Broken Hill Proprietary Co., the country's largest oil company, rose 3 percent to A$20.70 a share. Woodside Petroleum Ltd., the second-biggest, rose 1.4 percent to A$14.09, while No.3, Santos Ltd., gained 3.7 percent to A$6.24.

In the U.S., the world's biggest oil consumer, heating oil inventories are down 38 percent from a year ago, according to the American Petroleum Institute. That's stoked concern that refiners won't be able to make enough of the fuel before Nov. 1, a date traders view as the start of the heating season in the U.S.

U.S. refineries are running at about 96 percent of capacity, said the API, and they still haven't been able to make much of a dent in the deficit.

Heating oil for October delivery in the U.S. rose 0.52 cents, or 0.5 percent, to $1.055 a gallon in after-hours trading on the Nymex, after gaining 5.5 percent during regular trading. Heating oil futures, which represent wholesale prices, have been at or close to 10-year highs since late August.

``Really it is a refining problem,'' said Kyle Cooper, an energy analyst at Salomon Smith Barney in Houston. In the early 1980s, the U.S. had a refining capacity of 19 million barrels a day and now it's 16.6 million, he said.

) Copyright 2000, Bloomberg L.P. All Rights Reserved.

-- But he doesn't (have@anything.on!), September 12, 2000.

OPEC HAS FIGURED OUT THAT WE CAN PAY THESE HIGHER PRICES, SO THAT'S WHAT THEY'RE CHARGING. If you don't like it, WALK.

-- CPR (buytexas@swbell.net), September 12, 2000.

And by the way, I WAS RIGHT IN MARCH AND JUNE AND AUGUST. FEEL LUCKY, PUNK?

-- CPR (buytexas@swbell.net), September 12, 2000.

Here's PROOF THAT AWL PRICES ARE AT AN ALL-TIME LOW: LINK.

-- CPR (buytexas@swbell.net), September 12, 2000.

AND HERE'S SOME TESTIMONY about prices FROM A ***REAL*** AWL EXPERT. LINK.

-- CPR (buytexas@swbell.net), September 12, 2000.

I'm not certain the posts above were from the real cpr, since both the low price and awl expert links are well over 18 months old and refer to conditions that no longer apply. I think even charlie can read a date. Or does he really think no one else can? Of course, he has been getting more and more erratic lately.

-- Cash (cash@andcarry.com), September 12, 2000.

And by the way, I WAS RIGHT IN MARCH AND JUNE AND AUGUST. FEEL LUCKY, PUNK?

There's an old joke about an economist who correctly predicted eight out of the last three recessions. Cpr has (so to speak) correctly predicted eight of the three drops in oil prices this year.

Bottom line: oil prices are currently at $35 a barrel -- a ten year high. Oil prices have risen 37% this year.

-- Low inventories (and@high.prices), September 12, 2000.

link

http://futures.tradingcharts.com/chart/UG/W

-- CPR (buytexas@swbell.net), September 13, 2000.