Let's debate Russia vs OPEC.
It appears from everything I've been reading Russia continues to pump away ignoring it's agreement with OPEC producers. Does anyone think Russia want's to get into a market share pissing match with OPEC?
The following piece seems to suggest they just might.
Open to any rational discussion over the weekend.
Products Mount Short Covering Rally
NEW YORK (Dow Jones)--Crude oil and petroleum-product futures rallied at the New York Mercantile Exchange Friday, as traders covered short positions ahead of the weekend.
The gains, which followed two straight sessions of declines, were technical in nature rather than driven by any fundamental developments, analysts and traders said.
"It looks like short covering activity to me," an analyst said. "There is a lot going on in the world that potentially could go bad, so people are covering short positions."
Front-month March crude oil futures advanced 62 cents to close at $20.26 a barrel. The contract had fallen by 39 cents a barrel on Wednesday and Thursday.
Heating oil and gasoline futures rose more sharply, reversing the losses posted over the previous two sessions. March heating oil futures advanced 1.40 cents to close at 53.34 cents a gallon, while March gasoline futures settled at 58.77 cents a gallon, up 1.80 cents on the day.
A trader said that news that Kuwait was shutting down its 200,000 barrel-a-day Shuaiba refinery after the discovery of a leakage in the heat exchanger contributed to the advance in petroleum-products futures.
Nevertheless, traders registered little reaction to a slew of otherwise market moving items, suggesting that Friday's rally was technically driven, analysts said.
For instance, a report released by the International Energy Agency lowering oil demand forecast for the first quarter of 2002 sparked little selling, traders said.
In its monthly oil report, the Paris-based energy watchdog for developed nations cut first-quarter demand forecast by 200,000 barrels a day to 76.4 million barrels day. But world oil demand for all of 2002 was left unchanged at 76.5 million barrels a day.
Similarly, traders shrugged off the agency's finding that Russian oil production rose by 60,000 barrels a day in January from December despite a pledge by Moscow to lower output in tandem with the Organization of Petroleum Exporting Countries to prop up prices.
Russia agreed in December to lower its production by 150,000 barrels a day during the first quarter of 2002 in a gesture of support to OPEC's efforts to boost prices. Other non-OPEC producers also agreed to cut their production, prompting OPEC to trigger its agreed upon production cut of 1.5 million barrels a day beginning Jan. 1.
But the extent of Russian cooperation has always been in doubt.
"Last month we said Russia wouldn't cut at all," said Klaus Rehaag, editor of the monthly IEA report.
There is also concern among traders that whatever cooperation Russia may be lending now may end just when oil demand begins to take a seasonal dip at the end of March.
Extending the output cuts into the second quarrel is seen as critical for lifting oil prices because it's the weakest-demand period of the year.
However, despite assurances that Russia is sticking to its promise, Russian energy minister Igor Yusufov said last week that Russian oil companies should be ready to supply "as much crude as possible" to world markets in 2002.
(MORE) Dow Jones Newswires 08-02-02 |
