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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (11141)	8/30/2004 1:07:33 AM
From: mishedlo	Respond to of 116555

U.S. oil steadies just above $43, weakness seen Monday, August 30, 2004 3:37:41 AM SINGAPORE, Aug 30 (Reuters) - U.S. oil prices held steady above $43 a barrel on Monday as Iraqi crude exports remained more than 30 percent below normal due to sabotaged pipelines, but dealers expected the market to weaken further from record highs. U.S. light crude <CLc1> climbed 6 cents to $43.24 a barrel, following a string of losses last week that took oil more than $6 below the record peak at $49.40 struck on Aug. 20. Trading of Brent crude futures on London's International Petroleum Exchange was shut for a public holiday. The losing streak began after oil failed to break through the $50 mark, triggering a stretch of profit taking. Data from the Commodity Futures Trading Commission on Friday showed that non-commercial crude oil speculators cut their net long positions in the week to Aug. 24 to 31,434, from 47,949 in the previous week, in a bet that oil prices would decline. "There was a lot of trapped length in the market, which sold off pretty hard. I'm expecting some further downside pressure, at least another couple of bucks, maybe even down to $39. Market sentiment is bearish at the moment," said John Brady at ABN Amro. Oil prices remained underpinned by disruptions to Iraqi crude flows after a spate of sabotage attacks on oil pipelines. Industry sources said on Sunday that firefighters were battling to put out a new blaze in the South Rumaila oilfield after spilt oil and gas from damaged pipelines ignited. A shipping source said oil exports from Iraq's key southern ports were running at 1.2-1.4 million barrels per day (bpd). On Saturday, exports were running at about 1.5 million bpd compared with 2 million bpd a week ago. BREATHING SPACE FOR YUKOS? Oil shipments via sea into some parts of Japan were also disrupted on Monday as refiners suspended crude and oil products loading operations as typhoon Chaba battered the southwest island of Kyushu. Russia's biggest oil exporting firm, YUKOS <YUKO.RTS>, faces a deadline this week from tax authorities over a multi-billion dollar unpaid debt, but analysts expect the company to be given some breathing space, with little likelihood of disruptions to the company's production and exports. President Vladimir Putin assured U.S. counterpart George W. Bush last week that Russia, the world's second-biggest exporter, would not allow overseas sales to fall at a time when oil prices were hovering close to historic highs. Despite last week's slide that knocked U.S. crude down 13 percent from its peak, prices are still 33 percent higher than at the end of 2003 as producers pump close to full tilt to match soaring demand, especially from the United States, China and India. Violence in Iraq and fears that Russian supplies could be disrupted have added to worries over a lack of spare production capacity within the Organisation of the Petroleum Exporting Countries. Analysts say that while prices were due to correct lower, they may not fall far as global demand growth is running at the fastest pace in 24 years. Only OPEC's Saudi Arabia has any significant spare capacity within the 11-member producers' cartel, which is due to meet on Sept. 15 in Vienna to review output policy. OPEC has signalled that it plans to increase production to combat high oil prices, saying output would reach 30.5 million bpd in September from 29.6 million bpd in July. fxstreet.com