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

To: S. maltophilia who wrote (11241)	9/1/2004 9:40:08 AM
From: mishedlo	Respond to of 116555

UPDATE 2-Oil rebounds after 8-day slide, Iraq line ablaze Wednesday, September 1, 2004 1:08:26 PM reuters.com (Updates prices) LONDON, Sept 1 (Reuters) - Oil prices rose on Wednesday, stemming an eight-session slide that has dragged prices down 14 percent from record highs as news emerged of a fresh pipeline fire in Iraq. U.S. light crude <CLc1> climbed 53 cents to $42.65 a barrel, almost $7 below the record high of $49.40 struck on Aug 20. London's Brent crude <LCOc1> was up 61 cents at $40.22 a barrel. Concerns have abated in recent days that tightly stretched supplies could be severely disrupted at a time when oil demand is growing at the fastest rate in 24 years. Traders got a reminder of possible disruption to oil flows with news that an oil pipeline was on fire in northern Iraq on Wednesday in the vicinity of the main Kirkuk-Ceyhan export route. A Reuters photographer saw smoke rising from the pipeline in the lawless Hadar area west of the city of Mosul. There was no confirmation on whether the export pipeline that runs from the Kirkuk fields to Turkey was the one that was on fire. "There's good support at $40," said Daniel Hynes at ANZ Bank in Melbourne. "There's still some perception that supply is at risk from various disruption and we're certainly seeing figures every month showing very strong consumption, especially in Asia and China." Iraq had only this week resumed shipments of northern Kirkuk crude from Turkey's export terminal Ceyhan after a three-month stoppage. Crude exports from southern Iraq recovered on Tuesday to near-full capacity following repairs to sabotaged pipelines. Exports were running at 1.7 million barrels per day (bpd), just below the two million bpd level before the last attacks. Russian President Vladimir Putin said the world's second-ranking exporter after Saudi Arabia would continue to increase oil production and overseas sales. OPEC CEILING And the Organisation of the Petroleum Exporting Countries is set to raise its formal oil output ceiling to tame prices when it meets on Sept. 15, a senior OPEC official based in the Middle East said on Wednesday. "OPEC will raise its ceiling in Vienna, but the new production level will be decided at the meeting," he told Reuters. Delegates in OPEC have suggested the cartel could raise its 26 million bpd ceiling by one to two million bpd. The official reckoned the 10 OPEC producers bound by quotas are now pumping "almost at full blast" at 27.5 million bpd, 1.5 million bpd above formal limits. U.S. refiners are also working hard to pump out enough gasoline and distillate fuel to meet demand. The U.S. government Energy Information Administration will release its weekly report on national fuel stockpiles on Wednesday with analysts predicting the data will show an increase of 1.2 million barrels in crude stocks in the week to Aug. 27. Inventories of distillates, including winter heating oil, were expected to rise by 800,000 barrels, while gasoline tanks were forecast to decline by 1 million barrels as distributors stockpiled ahead of the upcoming Labor Day holiday weekend. The official ruled out taking a last step towards deflating prices by suspending OPEC's production ceiling. "OPEC's quotas should not be lifted. Producing without quotas is out of the question," he said. "Such a step will create a state of chaos." The cartel, which controls nearly half the world's crude exports, has no control over high oil prices, which are being driven by surging world demand for petroleum and political instability in the Gulf, he said.