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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: Sarmad Y. Hermiz who wrote (949)	11/28/2001 9:10:04 AM
From: craig crawford	Respond to of 1643

>> What's this with oil slipping so much under $20? I don't think demand has fallen that much. << it's all relative. >> The only conclusion to draw is that very small imbalances in supply/demand have disproportionate effect on price. << true. it only took a small opec cut to drive prices up to $38 last year when demand was strong. conversely, it only took a relatively small fall-off in demand for oil to come tumbling back down this year. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ OPEC could raise output to pressure rivals usatoday.com 11/27/2001 - Updated 09:25 AM ET ALGIERS (Reuters) — OPEC President Chakib Khelil said on Tuesday the oil cartel could raise output to exert pressure on rival exporters if they fail to agree joint action to reduce oversupply in world markets. OPEC is seeking a cut of 500,000 barrels per day (bpd) by rival exporters including Russia, Mexico and Norway in order to trigger a 1.5 million bpd cut of its own. "If we don't cut production by 1.5 million barrels per day in January, it is clear that prices will collapse quickly and we can add production as well to exert additional pressure," he told reporters at a media forum. The cartel has previously said it would not dip into its substantial spare production capacity, measuring about 5 million bpd, because cuts should be a sovereign decision by independent exporters based on national interest. Mexico, Norway and Oman have all agreed substantial cuts in line with OPEC's demands, but Russia has offered only a token reduction. "It is neither in the interest of Russia or other countries in OPEC and non-OPEC that prices collapse," Khelil said. Asked what the cartel would do if independent producers failed to meet OPEC's threshold, he said: "In case non-OPEC countries will not contribute by 500,000 barrels per day cut in production, OPEC will not reduce output by 1.5 million barrels per day." "This is clear and we agreed on that," he added, referring to OPEC's last meeting in Vienna.