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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Big Bucks who wrote (8836)	2/10/2004 11:28:00 AM
From: Proud_Infidel	Read Replies (2) \| Respond to of 25522

I love doing business with cartels: OPEC Springs Surprise Oil Output Cut Tuesday February 10, 11:00 am ET By Peg Mackey and Mona Megalli ALGIERS (Reuters) - OPEC (News - Websites) on Tuesday agreed a surprise cut in output limits from April, sending world oil prices up sharply. The deal slices production limits for the group that controls half the world's oil trade to 23.5 million barrels a day from April 1. Ministers said the Organization of the Petroleum Exporting Countries would also immediately eliminate 1.5 million barrels a day of leakage being pumped above existing supply quotas. Oil prices rose on the pact, a repeat of last September's unexpected supply reduction. U.S. crude at 1530 GMT was up 66 cents at $33.49 a barrel, valuing OPEC's reference basket well above the group's preferred $22-$28 target range. "It's a clever move by OPEC, giving the market some support before the second quarter," said Oystein Berentsen, head of crude trade at Norway's Statoil. "But given how much they are leaking people will want to see how much of the cut they implement. There's a question mark over their credibility." The deal is designed to help defend oil prices as demand slackens and world oil inventories build after the northern hemisphere winter. "The inventory, where it is now, is fine, we don't want to see it building," said Saudi Oil Minister Ali al-Naimi. "We don't want to see a precipitous fall in prices." For consumer nations the deal looks like a threat to world economic recovery and a reminder that OPEC appears prepared to defend prices that are above its official $22-$28 target range. A spokesman for the White House said: "It is our hope that producers do not take actions that undermine the American economy ... and American consumers." "It's a big call," said Kevin Norrish of Barclays Capital in London. "Our own view is that OPEC does not need to cut by as much as it appears to be aiming at." Saudi's Naimi said projections for a heavier-than-normal seasonal second quarter fall in demand could not be ignored. Forecasts, including those of the West's energy watchdog the International Energy Agency, are for second quarter demand to undercut world supply by as much as four million barrels a day, more than double the normal seasonal gap. Saudi Arabia's insistence that it wants $25 for OPEC's crude will be put to the test as it decides export flows for the spring. Riyadh appeared to have softened its tone on oil price policy since OPEC last met in December. Naimi said at the time that higher prices were justified by the impact of the weak dollar on producers' spending power. Since then, and again in Algiers, he has made a point of re-emphasizing Riyadh's commitment to OPEC's central $25 target.