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

To: mishedlo who wrote (22152)	1/25/2005 3:57:04 PM
From: RealMuLan	Respond to of 116555

-ggg, sorry, Mish, too late now.<g>

To: mishedlo who wrote (22152)	1/25/2005 4:01:25 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

OPEC Groundswell Grows On Oil Cut 26/01/2005 07:00 AM - Reuters Kuwait and Nigeria on Tuesday joined a growing chorus of OPEC oil producers saying crude prices are too high to justify cutting production when the cartel meets this weekend. Nigeria's top oil official Presidential Adviser on Petroleum, Edmund Daukoru, told Reuters in an interview that OPEC will probably leave output quotas unchanged at its Sunday meeting. US crude prices held just below US$49 a barrel on Tuesday - within US$7 of record highs hit in late October - after a weekend blizzard in the US Northeast boosted demand for heating oil. "When you balance things, there is an argument to watch and see until the March meeting," Nigeria's Daukoru said. OPEC is due to hold another ministerial meeting on March 16 in Iran. Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah, also OPEC President, said that the cartel could keep pumping at current levels as prices remain high and stocks are not building too fast. Iran's and Indonesia's ministers said earlier this week that strong prices mean the cartel may be able to resist cutting output even though world supplies are running in excess of demand. Prices Above Projections Crude prices are a long way above the US$35 level that the Kuwaiti minister said was OPEC's preferred level. "I think US$35 was a price acceptable to everybody," he said. OPEC's reference crude basket was last valued at US$42.49 a barrel. Nigeria's Daukoru said there was consensus in the group to keep prices within a range of US$35-50 per barrel. "From a low of 35 (dollars a barrel) to a high of 50, there is a consensus that something has to be done when you approach those extremes," Daukoru said, adding that he was referring to the North Sea benchmark oil Brent. Brent crude futures rose 19 cents to US$46.20 per barrel on Tuesday. The Organisation of the Petroleum Exporting Countries is keen to avoid an excessive stockbuild during the second quarter when demand ebbs after the northern winter. The cartel's latest forecast projected that stronger-than-expected demand growth should help keep inventories under control. OPEC's monthly report on Friday projected the cartel's current production levels will generate only a modest 1.4 million barrels per day increase in inventories. "Usually in the second quarter 1 million to 1.5 million I think is normal," the Kuwaiti minister said. This is far smaller than huge second quarter builds forecast at this time last year, which spurred OPEC into surprise supply cuts. Those cuts helped fire oil's 34 percent rally during 2004 as Chinese and US demand growth outstripped expectations. OPEC has already agreed to withdraw 1 million bpd of excess supply from January 1 to bolster prices. The group's oil supply fell 800,000 barrels per day in January to 29.6 million barrels per day, leading tanker tracking consultancy Petrologistics said in its preliminary estimate for the month. xtramsn.co.nz