To: SargeK who wrote (36796 ) 2/4/1999 4:40:00 PM From: Platter Read Replies (1) | Respond to
LONDON, Feb 4 (Reuters) - Oil prices fell on Thursday as the market saw no sign of a halt to oil flow from potential trouble spots Iraq and Nigeria. International benchmark Brent futures last traded 32 cents lower at $10.57 a barrel in London, with most of the losses coming in an hour-long wave of late selling. Market bulls have had no encouragement this week with a Reuters survey showing OPEC overshooting its target for production cuts designed to lift prices, production in Nigeria's troubled Niger Delta slowly returning to normal after disturbances and no sign of a threat to Iraqi exports. The announcement on Wednesday that the United Nations would no longer allow U.S. and British citizens to work on its humanitarian programme in Iraq had no impact on oil prices on Thursday after it became clear oil exports under the "oil-for-food" programme would not be affected. The U.N. decision, which applies to only two Americans in Baghdad, was taken after Iraqi authorities said anger was so high following U.S. and British air attacks that their safety could not be guaranteed. None of the oil monitors in Iraq are from the United States or Britain. A Western diplomat familiar with the situation said he saw no substantial effect to the programme under which Iraq sells a set amount of oil to buy food and medicine. Brimming storage tanks in major consumer centres have depressed markets since late 1997, forcing oil analysts to slash forecasts for oil prices in both 1999 and 2000. The World Bank forecast on Wednesday that crude oil prices this year would average just $12 a barrel and edge up to $15 in 2000 if the Organisation of the Petroleum Exporting Countries is successful in reining in its production. The chronic price weakness has prompted the U.S. government to unveil a plan to provide relief for low-volume oil producers that are suffering from shrinking revenues. The plan, announced on Thursday, would allow producers to suspend operating their oil wells on federal lands for up two years without losing their leases. The relief would apply only to so-called "stripper" wells that produce less than 15 barrels of oil a day. Current policy requires operators to promptly plug wells that are not producing and not paying royalty fees to the federal government. "This will help to alleviate the economic impact low oil prices many have on small federal stripper oil operations," U.S. Interior Secretary Bruce Babbitt said. OPEC ministers, meanwhile, seem unable to agree on a clear way forward through further production cuts, but there are signs some are worried. Algerian Oil Minister and current OPEC President Yousef Yousfi took time off from a seminar in Norway to meet his Norwegian counterpart but there were no details of their talks. Yousfi has pleaded for cooperation with non-OPEC producers like Norway and Mexico to help lift prices, which risk falling below last year's average of $13.34 a barrel if the present glut persists. OPEC giant Saudi Arabia surprised the market on Thursday by announcing price rises for most of its crude oil exports to Asia, Europe and the United States. Refinery profits have started recovering after hitting a two-year low in January but traders believe the market for crude oil is still too weak to explain the Saudi price increases. Prices in dollars per barrel: Feb 4 Feb 3 (close) (close) IPE March Brent $10.57 $10.89 NYMEX March light crude $11.99 $12.40
