Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Strictly: Drilling and oil-field services -- Ignore unavailable to you. Want to Upgrade?

To: IndioBlues who wrote (56524)	12/9/1999 1:06:00 AM
From: IndioBlues	Read Replies (1) \| Respond to of 95453

Saudis in No Rush to Adjust OPEC Quota December 9, 1999 12:39 AM Eastern Time Breaking News Headlines By Tom Doggett WASHINGTON (Reuters) - Saudi Arabia, a key architect of the OPEC production cuts that have boosted world crude oil prices to the highest level in nearly a decade, said on Wednesday it saw no need to adjust OPEC's output until March. Crude prices have risen in recent weeks amid signs that world supplies are being depleted faster than expected and worry about Iraq's halt in oil exports to pressure the United Nations to loosen sanctions. Saudi oil minister Ali al-Naimi, in Washington for a two-day visit and participation at an energy conference, said the Organization of Petroleum Exporting Countries was in no hurry to reconsider its output cuts and change quota levels. ``There is no need to make any decision before March,' Naimi said in response to a question if there were any scenarios under which OPEC would consider raising its production levels. That time frame applies even if there were oil supply disruptions at the end of this month caused by Y2K computer problems, he indicated. March is when OPEC's current production pact is scheduled to end and member nations will meet to consider a new oil production policy. However, Saudi Arabia will help replace any supplies that dry up before then if computers controlling shipping, pipelines or other operations malfunction by mistaking the year 2000 for 1900. ``In this regard, we are prepared, along with other major exporters, to assure supply in the event of any Y2K disruption,' Naimi said in a dinner speech at the conference. Saudi Arabia, the world's biggest oil producer, has idle production capacity of about 3 million barrels per day (bpd). ``This capacity ... provides insurance against unexpected supply interruption or demand surge,' he said. After delivering a tightly scripted speech, Naimi sidestepped the question of whether OPEC should pump more oil if Iraq continues to halt its crude exports. ``You have to be careful as to what Saddam (Hussein) will or will not do,' Naimi said. ``If you can assure me what he's going to do, I will give you a more definite answer.' Iraq stopped oil deliveries last month to protest the United Nations' refusal to extend for the usual six months the country's oil-for-food program that allows Iraq to sell about 2.2 million bpd of oil to buy food, medicine and other goods. The United Nations has extended the aid program for only a two-week period and then another one-week period, as it tries to work out a way to get arms inspectors back into Iraq. The U.N. Security Council was expected to renew Iraq's aid plan before it expires on Saturday, U.S. officials said. Separately, Naimi said he welcomed foreign investment in his country's energy sector, but it must be in areas that need to be developed, such as natural gas instead of oil, to benefit Saudi Arabia. Since Saudi Crown Prince Abdullah asked last year for energy investment ideas, U.S. and European oil companies have made proposals to the Saudi government on projects in oil, natural gas, petrochemicals and electricity generation. Texaco chairman Peter Bijur, whose firm made such a proposal, said on Wednesday he expects the Saudis to select by early next year which companies have the best ideas. One year ago, U.S. crude oil prices had fallen to about $10 a barrel. On Wednesday, crude futures contracts traded in New York closed at $26.62 a barrel, down slightly from recent days when they rose to the highest level in nine years. The increase in prices is due to OPEC's unusually strict adherence to a production-cutting pact agreed upon last February. That pact set a goal of slicing 4.316 million barrels per day (bpd) from the cartel's normal production level. U.S. Energy Secretary Bill Richardson said on Wednesday the Clinton Administration will let the market take its course unless prices soar to an unacceptable level. ``I do think that oil prices are too high but we think the market should make those corrections. Naturally, we will be prepared if prices are unacceptably high,' Richardson told Reuters following a meeting with Ukrainian officials. The Energy Department has said it would not tap the Strategic Petroleum Reserve to ease prices for anything short of a national emergency. The stockpile, created after the Arab oil embargo of the 1970s, holds 572 million barrels of oil. Richardson was to meet on Thursday with Naimi. When asked if he would urge Naimi to increase OPEC production and ease oil prices, Richardson responded, ``I'm going to have a very interesting, positive meeting.'