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Gold/Mining/Energy : LUKOY The largest oil company in the world LukOil unknown -- Ignore unavailable to you. Want to Upgrade?

To: Fred Levine who wrote (897)	12/8/2001 1:11:21 AM
From: CIMA	Read Replies (1) \| Respond to of 914

Russia: When a Cut Is Not a Cut December 7, 2001 Summary Oil markets rallied around a Dec. 5 announcement that Russia would cut first-quarter exports by 150,000 barrels per day. However, because the Russian "cut" does not limit production, its actual effect on oil supplies will be minimal. Moscow benefits from this move whether OPEC launches a price war or not. Analysis Russia announced a 150,000 barrel per day (bpd) cut to crude oil exports on Dec. 5, apparently bowing to pressure from the Organization of Petroleum Exporting Countries. In recent weeks Moscow has raised the specter of a price war by steadfastly refusing OPEC's calls to restrict crude supplies -- a cartel bid to raise flagging oil prices. Even its export "cut," however, doesn't really remove any crude from the market. In fact, Moscow plans to bring new projects on-line that will drastically raise production in 2002. The announcement positions Russia to benefit whether OPEC launches a price war or not. As a result OPEC members face a bleak future. Saudi Arabia and the Persian Gulf states can either refrain from a price war and face declining revenues or launch one and face declining market share. Crude prices have dropped by a third since the Sept. 11 terrorist attacks on the United States. Russia traditionally resists production cuts, but right now it stands alone. Three key non-OPEC producers -- Norway, Mexico and Oman -- have announced cuts of 200,000 bpd, 100,000 bpd and 40,000 bpd respectively, but have made them contingent on substantial cuts by Russia. Related Analysis: OPEC Price War Won't Sink Russia OPEC Unable to Drive Prices Up Russia to Spurn OPEC's Advances -------------------------------------------------------------------------------- Note: this is an abbreviated version of a full-length STRATFOR report previously seen by our Members. To access STRATFOR's complete range of in-depth, objective intelligence and analysis on the globe, including our award-winning daily full text and graphics reports, click here and become a Member today!