FOCUS-Oil prices rise to post-Gulf War high, shares mixed
Reuters Story - March 06, 2000 18:55
By Gene Ramos
NEW YORK, March 6 (Reuters) - U.S. oil prices rocketed Monday to their highest since the 1990/91 Gulf conflict, stoked by a growing rift among members of the Organization of Petroleum Exporting Countries (OPEC) over whether the cartel should raise output after supply curbs expire at the end of the month.
U.S. benchmark West Texas Intermediate (WTI) for April delivery shot up 67 cents to $32.18 a barrel on the New York Mercantile Exchange (NYMEX), the highest since November 29, 1990. On that day, U.S. oil prices ended at $32.91 after Iraq invaded Kuwait in August of that year.
In addition, fears of a severe gasoline supply squeeze this summer pushed the market higher as U.S. retail prices of unleaded gasoline reached a new record this week of $1.501 a gallon.
The U.S. Department of Energy (DOE) said that was up eight cents, or 5.6 percent, from last week. Compared to a year ago, the pump price was up 58 cents or almost 63 percent higher.
Worse, the DOE's Energy Information Administration (EIA) said U.S. motorists could pay as much as $1.80 a galllon for gasoline this summer unless major producers increased oil supplies soon and by a significant amount.
"It is becoming increasingly apparent that, so far as gasoline markets are concerned, the United Staes is moving into uncharted territory," the EIA said in a monthly forecast of oil supply and price trends.
Earlier in the day, price hawks Iran, Libya and Algeria issued a statement questioning the need for raising output in the second quarter, saying they see world demand falling by over 3.0 million barrels per day (bpd) during the period.
Their position ran against the stand of OPEC's Saudi Arabia and Venezuela and non-OPEC Mexico, which last week said they recognize the need for an output increase, though they said they needed time to determine when and by how much.
Kuwait, previously was against an output increase, sided with the three over the weekend, saying increasing output was "a step in the right direction."
Iran, Libya and Algeria said they expected to meet before the full ministerial conference of OPEC on March 27 in Vienna. The OPEC conference will tackle OPEC's future production policy.
Ten OPEC members excluding Iraq had taken off more than four million barrels per day of oil from world supply since last year under last March's output-cut agreement, trebling oil prices from their historic low of just over $10 in December 1998.
Part of the day's bullishness also came from news a strike of oil workers in Nigeria, which exports much of its almost two million barrel a day output to Europe and the United States.
Production cutbacks due to bad weather in the North Sea was also reported by Norway's Statoil and Norsk Hydro, further energized the bulls.
The day's energy share prices ended mixed, with effects of the day's high oil prices having little effect, traders said.
Big Oil share prices were down 2.75 percent as measured by Standard & Poor's Oil Internatinal Index , which fell 24.07 to 850.15 points.
Exxon Mobil Corp. , the world's largest publicly traded oil company, fell 2-12/16 to 72-15/16.
In the news, Exxon Mobil reconfirmed its 90,000 barrels per day (bpd) gasoline-making unit at its Bayton, Texas, refinery would be restarted in a few weeks, following an unexpected shutdown on Wednesday last week.
Oil service shares rose 2.01 percent or 2.13 or points, the Philadelphia Stock Exchange's Oil Service Index showed.
Among the sector's pacers were Weatherford International Inc , which gained 3-1/16 to 50-1/2. The company got word from the Internal Revenue Service's (IRS) that a favorable ruling would be issued in the next two to three weeks on the proposed spin-off to stockholders of its Grant Prideco drilling products subsidiary.
The S&P Oil & Gas Refiners' Index , which measures performance of independent gas and oil producerrs, lost 3.51 percent or 3.55 to 97.34 points.
Among companies tracked by the index, Sunoco Inc , the Philadelphia-based independent, edged down 12/16 at 25-9/16.
The company said a wastewater unit at its Toledo, Ohio refiner was hit by a fire.-
marketwatch.newsalert.com
Fire, what fire? That was a marshmellow roast OHIO style.
Jack |
