so much for the vaunted cut in Russia's oil production : Bloomberg Energy News
11/12 07:31
Crude Oil Falls on Disappointing Production Cut From Russia
By Thomas Tugendhat
London, Nov. 12 (Bloomberg) -- Crude oil fell more than 2 Percent, falling back from a one-month high on Russia's announcement it would cut output by 30,000 barrels a day, too little to prevent inventories from building, analysts said.
That would trim supply from Russia, the No. 2 oil exporter, by just 0.4 percent. Meanwhile, OPEC members overshot their quotas by 920,000 barrels a day last month, the International Energy Agency said, blunting the effect of any further cut they may enact their meeting Wednesday. Benchmark Brent crude oil jumped 5.4 percent Friday after Russia said it might cooperate with OPEC.
``The Russian cut is seen as insignificant,'' said William Buchanan, senior energy trader at Standard Bank in London. ``The market was close to these levels before Moscow came aboard and today's falls are undoing a story.''
Brent crude oil for December settlement fell as much as 52 cents, or 2.4 percent, to $20.86 a barrel, after earlier rising by 25 cents on the International Petroleum Exchange in London. Brent has still risen more than 9 percent from a two-year low of $19.07 a barrel last Tuesday.
The Organization of Petroleum Exporting Countries will meet for the sixth time this year in Vienna. The 10 members who participate in quotas pumped 24.12 million barrels a day in October, 4 percent more than their targets, the IEA estimated in a report published today.
In the U.S., crude oil for December delivery fell as much as 59 cents, or 2.7 percent, to $21.63 a barrel in electronic trading on the New York Mercantile Exchange. Oil in New York has dropped 21 percent since Sept. 11 terrorist attacks pushed the world's biggest economy closer to recession.
Non-OPEC Support
Ali al-Naimi, oil minister from top exporter Saudi Arabia, is in Moscow trying to convince second-biggest foreign seller Russia to back OPEC output reductions. Moscow failed to deliver in 1998 and 1999, when it promised to cut exports by 200,000 barrels a day. Instead, it increased shipments by 32,000 barrels in 1999, Eni SpA estimated.
Oil rose earlier after Mexico, the second-biggest non-OPEC exporter, said it would act to reduce supplies following a meeting with OPEC members Saudi Arabia and Venezuela. Mexico offered no specific plans, though.
Norway, the third-largest oil exporter outside OPEC, has refused to consider any cut in output.
Iran, OPEC's second-largest producer, said Saturday it won't reduce output unless non-members do so as well.
``If there's no cooperation from non-member states, Iran will not be prepared to reduce its production by even a single barrel,'' Iran's Bijan Namdar Zanganeh said, the state's official IRNA news agency reported.
OPEC officials and ministers had earlier indicated the group would pare output targets by up to 1.5 million barrels this week. |
