CRUDE OIL PRICING & RELATED / PART 1 - International In Scope
11/04 01:57 U.S. Defence Chief In Kuwait For Iraq Crisis Talks
KUWAIT, Nov 4 - U.S. Defence Secretary William Cohen arrived in Kuwait on Wednesday on the third leg of a tour of Gulf and European allies to discuss measures needed to force Iraq to meet U.N. arms inspection demands.
Cohen, who flew in from neighbouring Saudi Arabia, is expected to be received by the country's top leaders, including Emir Sheikh Jaber al-Ahmad al-Sabah.
It was not immediately clear if Cohen would ask Kuwait for the right to deploy additional military hardware in the tiny state. American F-117 stealth bombers were withdrawn from Kuwait in June.
Cohen is expected to leave for Bahrain, the headquarters of the United States Navy's Fifth Fleet, later on Wednesday, diplomatic sources said.
The United States, which led the 1991 Gulf War to end Iraq's seven-month occupation of Kuwait, has ground troops and warplanes deployed in the Kuwaiti desert, just south of the border with Iraq.
11/04 02:32 Iran Says No Problem With Bandar Mahshahr Loadings
TEHRAN, Nov 4 (Reuters) - A National Petrochemical Company of Iran official on Wednesday denied there were problems at Bandar Mahshahr port which were causing the cancellation of some fuel oil loadings.
"There are no problems at the port. Things are normal," the official told Reuters.
Industry sources said at least three cargoes of November lifting fuel oil have either been postponed or cancelled owing to operational problems at Bandar Mahshahr.
"It's not very clear what the problem is. The Iranians are not saying anything," said a regular buyer of Iranian fuel oil.
Traders said about 12 cargoes of fuel oil were expected to be lifted from the port during November, but that the number had been cut to nine cargoes.
11/04 03:24 - US force near Iraq sufficient for action-Pentagon
WASHINGTON, Nov 3 - A U.S. force of 21 warships and 174 aircraft now in the Gulf region is sufficient for any military action against Iraq over U.N. arms inspections, the United States said on Tuesday.
"There are no plans to change our posture," said Marine Lt. Col. Pat Sivigny, a Defense Department spokesman, when asked whether the United States might move a second aircraft carrier or other additional forces into the area.
"The United States maintains a substantial, capable and ready military force in the region, postured to respond to any contingencies," Sivigny said.
He said that in addition to the aircraft carrier Eisenhower, the United States had 20 other combat and support ships in and near the Gulf, including seven capable of firing long-range Tomahawk cruise missiles.
There are 174 U.S. Air Force, Navy and Marine combat and support aircraft in the area, including more than 50 on the Eisenhower.
The United States has said that it reserves the right to take unilateral action against Iraq, but prefers that any action be taken with cooperation of its allies and the U.N. Security Council.
The defense ministers of Britain and the United States agreed in London on Tuesday that force could be used against Iraq unless it backed down in the standoff over U.N. weapons inspectors.
U.S. Defense Secretary William Cohen and British Defense Minister George Robertson agreed during an hour-long meeting that Iraq had to reverse its weekend decision to stop cooperating with U.N. inspectors looking for weapons of mass destruction, according to a statement issued by the British Defense Ministry.
They agreed that "all options remained on the table, including the use of force if required to get (Iraq's President) Saddam Hussein to submit to the will of the United Nations," the statement said.
Pentagon officials said that after Tuesday's meeting, Cohen headed for the Gulf to visit with leaders of moderate states in the region to discuss the latest confrontation with Saddam over U.N. rules put into effect after the 1991 Gulf War.
The United States and Britain came close to a military confrontation with Iraq last February over arms inspections but the crisis was defused by U.N. Secretary-General Kofi Annan.
The United States had two aircraft carriers and more than 300 warplanes arrayed against Iraq during that crisis, but later reduced that force while leaving double the number of highly accurate, $1 million Tomahawks in the area.
U.S. officials have since made clear that Washington has no intention of continuing a costly cycle of building up, then drawing down, forces around Iraq with each new face-off, and that the large number of cruise missiles would suffice along with ability to quickly insert additional forces in a major emergency.
11/03 16:25 - World Oil wilts despite Iraq-U.N. flare-up
LONDON, Nov 3 - World oil prices fell further on Tuesday as traders shrugged off the latest crisis between key producer Iraq and the United Nations.
Benchmark Brent, on the ropes all year from a global supply glut, dipped back below the psychologically important $13 a barrel level to settle 22 cents lower at $12.84 a barrel on renewed fears of a build in U.S. crude stocks.
The oil price drop comes despite Iraq's latest vow to stick by its decision to end all cooperation with U.N. weapons inspectors.
"We will not back down on the decision whatever sacrifices there might be," the official al-Iraq newspaper said.
U.N. Security Council members were on Tuesday deliberating on a resolution expected to condemn Iraq but not call for military action.
U.S. Defence Secretary William Cohen sought to rally European and Gulf allies against Iraq, flying first to the UK where he secured an agreement with his British counterpart.
Cohen flew to Saudi Arabia after London for talks with King Fahd and was due in Kuwait on Wednesday for consultations.
Baghdad's decision to cease cooperation triggered brief oil price gains on Monday.
But the impact soon fizzled out as oil traders concluded that there was no immediate threat to Iraq's "oil-for-food" scheme supplying around 1.9 million barrels per day of exports.
Traders said the most likely impact of the worsening atmosphere was a delay in starting the new six-month humanitarian sales period, due on November 26.
Iraq could ask the United Nations to extend the current plan until it reached its $5.25 billion target rather than re-negotiate the entire programme, diplomats said.
Low oil prices and Iraq's crumbling oil industry equipment meant it was only expected to sell about $3 billion worth in the latest period.
Swelling Iraqi exports this year contributed heavily to an oil supply surplus that sliced the price of the commodity to their lowest level in real terms since the 1970s.
Traders will watch keenly for further reductions in swollen U.S. stocks as key inventory figures are released late on Tuesday. While the stock overhang has eased slightly, levels remain well above last year.
Yet a recent gathering of OPEC ministers in South Africa chose to defer any decision on whether to extend or expand current output cuts until the group's formal ministerial conference in Austria, also on November 25.
While OPEC members Kuwait and Algeria called for further output cuts on top of 3.1 million bpd agreed so far this year, key producers Saudi Arabia, Venezuela and non-OPEC Mexico have made it clear they do not want to make more reductions.
11/03 16:41 NYMEX crude ends lower on API build expectations
NEW YORK, Nov 3 - Crude oil futures on the New York Mercantile Exchange (NYMEX) ended with moderate losses Tuesday amid expectations of another significant build in U.S. crude stocks, traders said.
"The market is waiting to see the latest API, but the feeling of many is that we will have a big build again," said a NYMEX floor trader.
A Reuters poll showed market expectations of a 4.0-million- barrel increase in U.S. crude inventories for the week ended Oct. 30, as traders and analysts expected imports to be high and refinery runs to rise by just 1.0 percentage point.
On Tuesday, the December crude contract settled at $14.20 a barrel, down 16 cents from Monday, after cutting some of its earlier losses due to late short covering. It had gathered support after it slipped to $14.10 a barrel, from where it fell after getting stuck around $14.22 in early afternoon trading.
December heating oil ended marginally higher at 39.37 cents a gallon, up 0.01 cent. It traded within a range of 39.05/39.60 cents as the trading community expected a build of 1.1 million barrels in distillate stocks, which include heating and diesel oil. Analysts said heating oil demand was not keeping pace with rising refinery runs.
December gasoline settled at 43.71 cents a gallon, down 0.60 cent. Traders said the fall was due to the expectations of a build of 1.2 million barrels in gasoline stocks in the latest week, after a large draw of 2.1 million barrels in the API data in the Oct. 23 week.
In London, IPE December Brent crude on the International Petroleum Exchange settled at $12.84, down 22 cents on expectations of an API crude stockbuild.
As the NYMEX December crude contract did not fall below $14, some analysts said this could indicate the contract's underlying strength.
"But it may also be just too early to tell," said Pegasus Econometric Group analyst Tim Evans.
On Monday, the December crude contract ended at $14.36, losing six cents and wiping out overnight gains, when it hit a high of $14.81.
Those gains were spurred by Iraq's decision on Saturday to end cooperation with U.N. arms inspectors and the swift condemnation of the action by the Security Council. A U.S. threat of yet another military action also added to the bullishness.
Iraq said Tuesday it would not back down, forcing a warning from the U.S. and Britain, which said all options were open, including the use of force against Iraq if it did not relent on its ban on arms inspectors.
Iraq said it will not cooperate until the Security Council reviews the lifting of sanctions the U.N. imposed against it for its August 1990 invasion of Kuwait and removes Richard Butler, head of the U.N. Special Commission (UNSCOM), which oversees the dismantling of Iraq's chemical and biological weapons. The U.S. sanctions include an oil embargo.
"The flow of oil from the Gulf has not been disrupted and diplomatic measures are in the offing to diffuse the tension," said a New York oil trader.
"In the meantime, another API report is expected to show a further rise in U.S. crude stocks," he added, noting that worries about the supply overhang have emerged once more, now that market-moving headlines on the latest Iraq/U.N. tension have faded.
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