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Politics : Don't Blame Me, I Voted For Kerry -- Ignore unavailable to you. Want to Upgrade?

To: mph who wrote (27691)	6/2/2004 11:48:43 AM
From: American Spirit	Read Replies (1) \| Respond to of 81568

Bush Policies Lift Oil to Record $42.45/Barrel (* Remember GW's promise in 2000 to lower energy prices?) Wed Jun 2, 8:15 AM ET Add Business - Reuters to My Yahoo! By Toby Reynolds LONDON (Reuters) - U.S. oil prices slipped on Wednesday away from a fresh record high of $42.45 struck on fears that a campaign of violence by Islamic militants in Saudi Arabia could destabilize the world's biggest crude exporter. U.S. light crude peaked at that level, the highest seen in 21 years of New York oil futures trading, before drifting off to sit 49 cents down at $41.84 a barrel. London Brent crude fell 62 cents to $38.46. The fall retraced only a small part of a $2.45 gain made on Tuesday, six percent, after an attack in the Saudi oil city of Khobar heightened concerns over the ability of the ruling Saudi royal family to contain a wave of violence by Islamic militants. Traders said pledges of more oil from OPEC (news - web sites) ministers ahead of Thursday's cartel meeting had encouraged profit taking from Tuesday's surge, although the strength of the latest rally had brought doubts about OPEC's control of near-term prices. Ministers from the Organization of the Petroleum Exporting Countries are expected to lift official output limits by 2-2.5 million barrels per day at their Beirut meeting. Saudi Oil Minister Ali al-Naimi, who has already promised an extra 700-800,000 bpd of crude for June whatever OPEC decides, backed a 2.5 million bpd or 11 percent increase in the cartel's official output limits on Wednesday, but cautioned that this might not ease the market. "OPEC cannot always control the price," he said. Traders say they are more concerned about the security of supply from the world's largest exporter. Market participants fear the Khobar attack could mark the start of a concerted al Qaeda offensive to disrupt Saudi supplies at a time when oil prices are already high enough to threaten world economic growth. JUMPY MARKETS News of a shooting attack on U.S. personnel in the Saudi capital Riyadh on Wednesday raised those fears, although there were no reports of casualties. "Everybody is very jumpy after the attacks and rightfully so," said Edward Meir at Man Energy in London. "Only Saudi Arabia has surplus capacity, and if it's oil flow should be disrupted, it could bring a hopeless situation," said Tony Nunan, manager at Mitsubishi Corp's oil unit in Tokyo. Kuwait said it was stepping up security at its oil installations and was coordinating with fellow Gulf producers to protect against attacks. Riyadh has vowed to keep supplies running smoothly from its heavily guarded oil facilities. The United Arab Emirates, the only OPEC member along with Saudi Arabia with any significant spare capacity, said on Wednesday it would lift real output in June by 400,000 bpd. OPEC is already pumping more than two million bpd above its existing official ceiling of 23.5 million bpd, and some ministers said there may be little more they can do to quell the surge in prices. Algeria's energy minister Chakib Khelil called for a complete suspension of output quotas, saying it was the only way to make an impact on the market. "Possibly the most drastic action OPEC could take would be to suspend quota levels altogether. We think that unlikely, but even this kind of move may not be enough to push prices down by much in the short-term, given the level of political uncertainty in the Gulf region at present," wrote Kevin Norrish of Barclays Capital.