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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: excardog who wrote (6554)	2/8/2002 5:01:40 PM
From: Gator II	Read Replies (2) \| Respond to of 206183

Without a steady stream of oil exports, I think Russia's go at capitalism would be derailed in a hurry. Even if the world slipped into a deeper recession it probably wouldn't stop Russia from pumping and exporting any time soon. So long as OPEC is controlled by the Saudi's, Russia will just keep on pumping, imo. If Iraq and Iran ever get their act together all bets would be off as they could challenge S.A. for OPEC dominance but I don't think thats in the cards any time soon unless, or course, we take out Saddam and Iraq's new leadership sees eye-to-eye with Iran's leadership. I guess thats possible but its not probable. Off hand, does anyone know what US drillers are active in Russia or in any of the former satellite countries that made up the USSR?

To: excardog who wrote (6554)	2/8/2002 6:22:14 PM
From: stsimon	Read Replies (1) \| Respond to of 206183

I believe the price of oil in Russia is about $5 a barrel. Not a lot of incentive to reduce exports with the world price much higher. Russian stock market was up big last year and I expect it to be up big again this year. TRF is within a couple of bucks of a triple top breakout. With Putin being George Bush's new best friend, this could be an interesting market to play from the long side.

To: excardog who wrote (6554)	2/8/2002 6:56:53 PM
From: chowder	Read Replies (1) \| Respond to of 206183

Cardog, I listened to a piece on Russian oil tonight on NPR. They said the Russian Parliament wants to enforce the quotas. They said political power would try and comply. I don't know if that's just public speak or they truly intend to follow through. I think it is clear that the Russians know they are playing a dangerous game by ignoring the quotas. dabum

To: excardog who wrote (6554)	2/9/2002 4:41:03 PM
From: Rob Shilling	Read Replies (3) \| Respond to of 206183

I know a little about the Russian oil companies because I own some Lukoil. From what I understand, the cost of production in Russia is very low ($3-4 per barrel). The increases in production that we are seeing now are due to increasing cap-ex due to the recent improvement in the profits at Russian oil companies. Russia's economy improved greatly with the devaluation and oil price surge of 1998. Now, Russian companies are making up ground in cap ex investment that was neglected during the 1990's. Oil production in the FSU dropped in half during the 1990's. I am not sure of the purpose for the grandstanding of the Russians over oil production. The Russians may indeed be leaning toward the west some and don't want to play OPEC's game. The talk of a price war seems to be just talk. There is a certain amount of spin associated with Russia's increases in production. For example, Russia increased production in 2001 by 500,000 bpd. But, 200,000 bpd of that increase went to satisfy increased domestic demand. If you add the extra 300,000 barrels of exports to the many declines in other non-OPEC areas, Russian production increases are not strong enough to cause an oil price collapse by themselves. As Simmons points out, the FSU and Brazil are responsible for 60% of non-OPEC output increases over the last few years. Increases in production in the FSU and Brazil will probably continue. But, we also have the peaking of the North Sea and declines in other non-OPEC areas to factor in. I think the bottom line is that non-OPEC production is very close to a peak. We could see that peak this year. Also, we have a good increase in demand coming from recovering economies. Look at the U.S. airlines. They were still at 85% of capacity in December 2001. As of mid-year, the airlines hope to be back at 100%. This is over 1 mbpd in added demand. The typical seasonal decline in demand will be overshadowed this year by a cyclical recovery. OPEC may see that non-OPEC production increases are soon to no longer be a threat. If they do, then they may be more interested in just getting world-wide inventories back down to levels that gets oil prices back in the OPEC price-band. So far, it looks that OPEC is indeed executing its production cuts. I don't see a oil price war. In fact, I see $30 oil as early as mid-year.