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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (5067)	11/15/2001 10:11:15 PM
From: Yorikke	Read Replies (1) \| Respond to of 33421

John, I believe that the first paragraph of Cartel Management 101 begins with the sentence 'All cartels are doomed to fail.' OPEC has done quite well considering. I believe a corollary of the the above statement is 'Every time you make a lot of promises its bound to bite you in the ass.' Now that we have made a lot of promises to a lot of countries in the middle east and central Asia, many of them oil producers, to help us with the War on Terrorism, it will be interesting to see how much cheap oil ends up costing us.

To: John Pitera who wrote (5067)	11/15/2001 11:02:55 PM
From: Hawkmoon	Read Replies (2) \| Respond to of 33421

Mexico surpassed Saudi Arabia as the largest oil supplier to the U.S. market in September, Call me conspiratorial here John... But I'm wondering if Russia's embarked on a deliberate strategy of taking on OPEC, arrived at through cooperation between Bush and Putin. Create a price war in oil.. stimulate economic growth through lower energy prices, and in exchange the US will increasingly purchase Russian oil, sending US hard currency THERE, rather than to the Saudis. And since Bush has announced that the US would seek to increase the amount of oil held in the SPR, there may be some deal being worked with both Russia and Mexico, to support their local oil exports, by purchasing more than we need. To many US dollars have found their way into the hands of the Saudis, who were provided financial support for the Taliban and their religious schools where young kids are brainwashed with fundamentalist Islamic beliefs. Bush and Cheney may have finally come to the realization that the ruling family in SA is a liability and its necessary to weaken their financial wherewithal. Hawk

To: John Pitera who wrote (5067)	11/16/2001 12:59:45 AM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 33421

John, The new oil cartel is Texas and Russia. <ggg> Joan

To: John Pitera who wrote (5067)	11/16/2001 1:10:34 AM
From: Mark Adams	Read Replies (1) \| Respond to of 33421

re low oil prices & Indonesia Indonesia The September trade surplus fell 6.4% year-over-year to $2.18 billion, as a result of sharp drops in both exports and imports. Indonesian goods heading overseas fell for the sixth consecutive month to $4.32 billion, a 25% on-the-year decrease, while imports sank 38% on the year to $2.14 billion. Unlike in neighboring Malaysia and Singapore, the smaller concentration of electronics in Indonesian exports has protected the economy somewhat from the slowdown in the US. However, the fall in oil and natural gas prices has been a problem, since they combine for more than 20% of total exports, and overseas sales dropped 28% in September. Textiles make up the biggest share of non-oil and gas exports, which fell 24% on the year, and the 0.4% drop in US Q3 GDP suggests that this sector will continue to suffer as Americans cut back on spending. Exports and tourism are the two chief sources of foreign exchange, given the continued outflow of investment capital. Tourism receipts fell a monthly 3.7% in September, and will continue to decline as security concerns increase. This means the government will be even more dependent on foreign loans and aid, especially since Jakarta has failed to raise any significant revenue from the selling or privatization of state-owned assets and enterprises due to delays by vested interests and from political turmoil. Recently the Consultative Group on Indonesia offered $3.14 billion to shore up Jakarta's 2002 budget, however, so far this year the government has received only $2.6 billion of the $4.8 billion pledged by sovereign lenders last year. All of this has caused the rupiah to weaken steadily, just after the battered currency received a considerable boost with the ouster of former President Wahid in July. Unfortunately the rupiah weakness now reflects the economic conditions more than just the political problems. Renewed and sustained currency weakness will again fuel inflation, further limiting monetary policy. October CPI rose 12.5% on an annual basis, which means the government will almost certainly miss its year-end target of 9.3%, especially as it further reduces fuel subsidies to ease its fiscal burden. With ineffective monetary policy and fiscal constraints there seems to be little Jakarta can do but to rely on the "goodwill" of sovereign lenders, who themselves are facing difficult times at home. While the situation is not yet a crisis, the potential for default increases almost daily. ntrs.com