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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Wally Mastroly who wrote (14528)	6/16/2000 1:37:00 PM
From: Justa Werkenstiff	Read Replies (2) \| Respond to of 15132

Oil prices slump as belief in OPEC hike grows (Edit: Trial ballons being floated here; OPEC surely watching to see the market impact of any speculation on increase in supply). LONDON, June 16 (Reuters) - World oil prices retreated on Friday as expectations grew that producer cartel OPEC will unleash extra barrels of crude to the market next month. North Sea benchmark Brent crude futures for August fell $1.39 a barrel to $28.00. U.S. light crude for July was off $1.27 at $31.68. Dealers said prices were on the defensive following recent comments from key oil producers that suggested OPEC at a meeting next week would agree to free up additional crude at the start of the third quarter. They said OPEC looked likely to raise supply by up to one million barrels daily -- more than would have been the case if the cartel last week had observed an informal mechanism to release 500,000 bpd when OPEC crudes rose above $28 per barrel. ``Most likely OPEC will agree on an increase of one million barrels a day. Only Iran will oppose but they will raise output anyway to maintain market share,'' said Roger Diwan of Petroleum Finance Corp. Fears of a shortfall in U.S. gasoline supplies in the peak demand holiday season and uncertainty over OPEC's next move have driven oil close to levels not seen since the 1990 Gulf War -- U.S. crude went over $33 earlier this week. An official from OPEC-member Venezuela said on Thursday that Caracas favoured a production hike of more than 500,000 bpd. OPEC kingpin Saudi Arabia, the world's largest oil producer, says publicly that oil markets are reasonably balanced and that all options remain open to the cartel. But industry sources have said that Riyadh too believes 500,000 bpd may not be enough to ease prices down to the $25 with which it would be more comfortable. Its Gulf neighbour Iran has said it sees no reason for a hike at this time, blaming the firm price on shortages of U.S. gasoline, not crude. Non-OPEC member Mexico, a major oil exporter to the United States, has said that it would back an OPEC production boost. Mexican Oil Minister Luis Tellez and his Saudi counterpart Ali Naimi held private talks for several hours in the Netherlands on Wednesday, but gave no comment afterwards. Analysts GNI Research said there appeared to be a subtle shift within key OPEC members over output policy towards a rise in production in excess of 500,000 bpd. It added: ``Given that there are a considerable number of traders looking at a no change situation (to OPEC output), any production increase is likely to see a severe initial sell off. Also helping drag prices lower was news that the U.S. government had released a small volume of oil from its emergency reserves to domestic refiner Citgo. The U.S. Energy Department said it released 500,000 barrels to help avert a shortfall in U.S. gasoline supplies. Conoco said it too had a request for emergency supply from government reserves. 13:04 06-16-00