Texoil look's like a great company. With oil prices above $30 and NG shooting over $6 TXLI looks like the right place to be at the right time.
I wonder how long it will take the market to figure out that Saudi Arabia doesn't have the extra capacity to cover for Iraq?
Iraq Halts Crude Oil Exports, United Nations Says (Update2)
By Alex Lawler
quote.bloomberg.com
New York, Dec. 1 (Bloomberg) -- Iraq, the Middle East's third- largest oil producer, halted exports equal to 3 percent of world supply in its latest protest against a decade of United Nations sanctions, a UN official said.
Benon Sevan, executive director of the UN's Iraq program, confirmed that shipments through ports in the Mediterranean Sea and Persian Gulf stopped today. Crude oil prices, after an initial rally, slid as traders expected the standoff would end soon.
Iraqi President Saddam Hussein ``doesn't want to climb down on this one,'' said Jurjen Lunshof, an analyst at Credit Lyonnais Securities Europe. But ``the market now seems to be quite relaxed, as (traders) don't feel it's going to last.''
An oil official for Saudi Arabia, the world's largest producer, in an interview today reiterated that the kingdom is willing to compensate for any lost barrels ``in consultation with other producers.''
The cutoff comes when U.S. oil inventories are recovering from a 24-year low and prices are 30 percent higher than a year ago. Iraq blamed the UN for the stoppage, saying officials rejected its proposed prices for oil sales this month, Agence France-Presse reported, citing a government statement.
Brent crude oil fell as much as 88 cents, or 2.8 percent, to $31.00 a barrel in London, after initially rising 44 cents.
Reserves
The International Energy Agency, which coordinates policies for 24 industrialized nations, today said it would take action ``very quickly'' to coordinate a release of member countries' reserves if needed. The U.S. has also said it may tap emergency supplies.
Iraq opposes sanctions and the UN oil-for-food program under which it operates. The nation has some $11 billion in a New York bank account available for humanitarian purchases.
Iraq normally exports crude through the Turkish port of Ceyhan on the Mediterranean and the Gulf port of Mina al-Bakr. Pumping to Ceyhan ended at midnight, said Figen Sahin, a spokeswoman for BOTAS, the Turkish pipeline company.
Pricing Dispute
The UN has yet to approve a pricing formula for Iraqi oil sales this month under the oil-for-food program. The UN has said exports could continue without such terms, with payment to be made once prices are set.
``As far as we know, the oil is no longer flowing from the two authorized ports,'' UN spokesman Fred Eckhard said. UN officials are trying to contact Iraq's State Oil Marketing Organization, so far without success, in attempt to secure agreement on December prices, he said.
The Iraqi oil ministry today accused the UN sanctions committee of blocking exports after refusing the nation's proposed prices, according to the AFP report, which cited a statement on the official Iraqi News Agency.
A ``refusal by oil customers to lift Iraqi crude is because of the rejection by the UN sanctions committee (of the price formula), and the U.S. and British representatives on the committee are responsible for that,'' the Iraqi oil ministry said, AFP reported.
Seeking to regain control over a portion of its oil revenue, Iraq had told oil buyers to pay a surcharge of 50 cents a barrel outside of UN-controlled accounts, such payments that would violate sanctions imposed after the nation's 1990 invasion of Kuwait.
Saudi Pledge
Saudi Arabia, the world's largest oil producer, has about 70 million barrels of oil in storage, according to Saudi Aramco, the state-owned oil company.
Also, within 90 days the kingdom could add 1.8 million barrels of oil a day to world markets, Ali al-Naimi, Saudi Arabia's oil minister, has said. Iraq exports about 2.3 million barrels a day. Most other producers in the Organization of Petroleum Exporting Countries have little capacity to boost output. |
