Sep. 28-MAR--
[B] NYMEX Oil Review: Crude falls 3.7% as Saudis willing to hike output
By Gelu Sulugiuc, BridgeNews
New York--Sept. 28--NYMEX crude oil futures settled down $1.12, or
3.7%, at $30.34 per barrel after steady falling throughout the session
amid comments suggesting that Saudi Arabia is ready to pump more crude
onto the world oil market if needed to stabilize prices. IPE's Brent
settled down $1.28 at $29.26 per barrel.
* * *
NYMEX Oct heating oil settled down 374 points at 91.06c per gallon,
while Oct gasoline ended down 538 points, or 5.9%, at 86.74c per gallon.
Gasoline futures have been falling hard ever since the American
Petroleum Association reported Tuesday that stocks increased 2.9 million
barrels last week amid higher domestic production and imports.
Saudi Arabia's foreign minister and the head of its Supreme Petroleum
Council reiterated Thursday that the kingdom stood ready to play its role
in countering any world crude oil shortages. Prince Saud al-Faisal,
however, told BridgeNews that it does not mean his country was assuming
the role of a swing producer, adding "there are no swing producers in
OPEC." (Story .19298)
"It seems like the Saudis are just trying to put a little pull on the
market," a broker said. "This just comes out at a time when the market is
particularly vulnerable." The market failed to close the gap between
$32.20 and $32.50 and even failed to remain above $32.00 Wednesday.
Another broker confirmed the market's weakness after the Saudi
comments.
"Finally the technicals gave up the ghost and broke through support at
$30.85," he said. The market also broke through the next levels of support
at $30.60 and $30.40.
OUTLOOK:
Observers expect the market to be quiet Friday, chopping around in a
small range. "There will likely be some short covering ahead of the
weekend at some point during the day, but there's room for further
weakness," a trader said.
"We're still under some pressure coming from all the recent news," a
broker said. "This is the long-overdue correction that people have been
waiting for.
Where the bottom is, it's hard to say."
Traders will also keep an eye on Iraq's reaction to the U.N.
Compensation Commission's decision today to approve Kuwait Petroleum
Company's claim of $15.9 billion in reparations for damage during the Gulf
War.
Traders reported some short covering Thursday near the $30.60 level
immediately after Iraqi officials said they would hold a news conference
Friday in Caracas, but the market resumed its fall shortly afterward. Any
sign that Iraq might cut its exports in protest to the commission's
decision would significantly boost the market, but most traders said they
did not expect Iraq to make such a move.
Iraq has argued the claim is exaggerated, but the U.N. Security
Council reached a deal Wednesday that allowed the Compensation Commission
to approve Kuwait's claim. The Security Council decided to reduce the
portion of oil proceeds that Iraq will have to pour into the compensation
fund between December and June to 25% from the current 30%. That is about
$1 billion a year, according to French diplomats. End
IN THE NEWS
Story
Number Headline
------ --------
.19298 OPEC SUMMIT: Saudi reiterates readiness to counter crude shortages
.23044 OPEC SUMMIT: Draft declaration commits to secure oil supply
.23170 OPEC SUMMIT: Chavez suggests OPEC consider call to lift Iraq
sanctions .22438 UK Press: Naimi: Saudis capable of 1-1.5 mln bpd output
hike in 30 days .12896 UK oil analysts see little benefit releasing EU oil
reserves .20147 Mexico's Tellez sees crude prices stabilizing at about
$30/bbl .18371 OPEC SUMMIT: Rodriguez: EU oil release could make prices
fall sharply .18095 US EPA seeks to relax laws on Northeast heating oil
sulfur content
UPCOMING:
--NYMEX Oct crude futures expire Sept. 20, Oct options Sept. 15. IPE Oct
crude
futures expire Sept. 14; Oct options Sept. 11. NYMEX Oct product futures
expire Sept. 29, Oct product options Sept. 26.
--OPEC's heads of state meet Sept. 27 and 28 in Caracas to commemorate
OPEC's
40th anniversary. |
