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

To: jim_p who wrote (62241)	3/16/2000 8:44:00 AM
From: Post_Patrol	Read Replies (1) \| Respond to of 95453

Crude Oil Falls as Expectations Grow for OPEC Output Increase Crude Oil Falls as Expectations Grow for OPEC Output Increase London, March 16 (Bloomberg) -- Crude oil fell more than 2 percent after remarks by OPEC's president boosted traders' expectations that exporters will agree to increase output in April to avoid sparking inflation that might cut demand. Brent crude for April settlement was at $27.05 a barrel on the International Petroleum Exchange, after falling as much as 63 cents, or 2.3 percent, to $26.90 a barrel. Oil has fallen for the past five trading days and is almost 14 percent lower than the nine-year high it touched eight days ago. Qatari oil minister Abdullah Hamad al-Attiyah, President of the Organization of Petroleum Exporting Countries, indicated late yesterday a price of about $24 a barrel for Brent would be acceptable to producers. ``People are nervously selling on OPEC comments,' said Rob Laughlin, associate director of energy at GNI Ltd. Crude oil for April delivery on the New York Mercantile Exchange was 46 cents lower at $30.26 a barrel in electronic trading. OPEC-engineered cuts have helped oil prices to more than double over the past year. The cuts have drained U.S. oil inventories to levels not seen for more than 23 years, prompting the world's biggest energy user to lobby for an increase in OPEC output of 2 million to 2.5 million barrels a day. An average $23 to $24 a barrel for OPEC's basket of seven crude oils is ``a fair level for both producers and consumers,' Al-Attiyah said late yesterday. Brent crude is usually traded about 50 cents above the OPEC basket price. Iran, Kuwait Most OPEC members, including Iran and Kuwait, which had insisted on keeping production low, now support an increase, though they have avoided indicating by how much they may raise production. Today is the last day the April contract will be traded. Brent crude for May settlement fell as much as 57 cents, or 2.2 percent, to $25.90 a barrel on the IPE. As oil contracts come close to expiration, traders usually sell them and buy contracts for the next month in a bid that prices will increase. Now, traders are holding back from switching to May contracts as OPEC hasn't yet clearly stated its plans. Traders ``don't roll over to May to avoid being caught by an OPEC decision,' Laughlin said. According to surveys, OPEC is already boosting exports, restraining output to a lesser extent than it pledged. The U.S. Department of Energy said yesterday crude inventories in the U.S. rose 400,000 barrels last week. OPEC officials have said they have to consider prospects for oil demand and market prices to make a decision on output policy. ``The lower the price, the less obvious is that OPEC will raise output,' said Shelley Mansfield, a broker at ADM Investor services International Ltd. ``If prices fall too much, fresh buying is to come.' Oil prices are expected to find support at about $26 a barrel. If they break through this level, the drop will likely to stop at around $25.30 a barrel, she said. -------------------------------------------------------------------------------- ¸ Copyright 2000, Bloomberg L.P. All Rights Reserved.