Re: Kuwait forecasts $18 Oil (Brent)
Cragganmore, I'm going to post the article to your link since Bloomberg won't keep it there indefinitely.
I think this is important to recognize:
OPEC doesn't want $30 Oil.
They want Brent in the high teens.
Some may doubt that Producers can succeed in their efforts to hold the price up, but does anyone doubt they can keep it from going higher than they want it?
-- d
quote.bloomberg.com
Energy News
Wed, 7 Apr 1999, 9:46am EDT
Oil Prices Could Soon Reach $18 a Barrel, Kuwait Forecasts
Kuwait, April 7 (Bloomberg) -- Oil prices close to an 11-
month high could gain another 20 percent soon, though exporters
would prevent a rise much above $18 a barrel to keep idle oil
fields from returning to use, Kuwait's oil minister said.
Oil prices, after reaching a 12-year low in December
because of an oil glut, are up about 45 percent since then to
$14.75 for Brent crude oil as exporters promised to cut global
oil supplies by 2.1 million barrels a day, or 2.7 percent. The
new cuts were scheduled to take hold April 1.
After the newest round of cuts, the Organization of
Petroleum Exporting Countries has about 21 percent of its
capacity idle, signaling the potential for increased production
should prices rise, according to the Centre for Global Energy
Studies, a London-based consulting firm.
''There is an intention to prevent a surge in oil prices so
as no funds are used in new oil investments which eventually
flood the market and increase the surplus, thus repeating the
cycle,'' said Kuwait Oil Minster Sheikh Saud Nasser al-Sabah,
Kuwait's official news agency reported. Oil prices ''would soon
climb to $17 to $18'' for a barrel of Brent crude, he said.
Brent crude oil on the International Petroleum Exchange in
London last week reached an 11-month high of $15.28 a barrel.
Billions Lost
Oil exporters have lost billions of dollars from low prices
during the last 16 months, forcing OPEC members to end their
disputes and agree to cut output for the third time in the past
year. Last year OPEC and other exporters promised to cut 3.2
million barrels of daily output though failed to comply with
their quotas and boost prices.
Analysts said prices could reach $18 a barrel before the
end of the year with the new round of cuts.
''It all depends on compliance,'' said Jassem al-Saddoun,
an oil analyst with Kuwait-based Al Shall economic research
center. ''If they keep their promise, prices could reach nearly
$20 by the end of the year. If they don't, then they would
probably hover in $14 to $15 range.''
OPEC met 77.6 percent of its promised oil output cuts in
March, according to a Bloomberg survey, up from 70.7 percent the
month before.
Officials insisted that this round of cuts would be the
group's last and will succeed in relieving bulging supplies.
''It was coherent plan, and although difficult to reach,
all countries felt it was consistent with their interests,'' al-
Sabah said.
Kuwait, which is expected to cut its oil output by about
144,000 barrels per day as part of the new initiative, now has
an OPEC production ceiling of 1.83 million barrels a day. |
