Wednesday March 17 6:19 PM ET
Oil Surges on Saudi Output-Cut Plan
By ANDREW BUCHANAN Associated Press Writer
Crude oil prices surged higher on the New York Mercantile Exchange Wednesday on news that
Saudi Arabia has specific production cuts in mind to boost prices.
In other markets, grains rose while soybeans were mixed.
Crude oil futures hit a five-month high Wednesday with news that Saudi Arabia plans to cut
production by 580,000 barrels a day, analysts said. That was at the high end of what market
participants expected from the world's biggest oil producer.
Saudi Arabia, Iran, Venezuela and Mexico recently reached agreement on a plan to cut
production to boost sagging oil prices. All members of the Organization of the Petroleum
Exporting Countries except Iraq have committed to the cutbacks.
The agreement still must be formally approved at the OPEC meeting next Tuesday in Vienna,
Austria, but the news from Saudi Arabia was positive.
''It's a concrete signal of their seriousness to cut output and get prices up,'' said Bill O'Grady, a
vice president at A.G. Edwards & Sons in St. Louis. ''They haven't really had their heart in this
until now.''
Unleaded gasoline prices also surged on lower-than-expected U.S. gasoline inventories. That,
coupled with demand running above last year and the warm-weather driving season around the
corner, drove prices higher.
Crude oil for April delivery rose 59 cents to $15.05 a barrel; April heating oil rose 1.91 cents
to 39.68 cents a gallon; April unleaded gasoline rose 2.53 cents to 47.20 cents a gallon; April
natural gas fell .31 cents to $1.748 for each 1,000 cubic feet.
dailynews.yahoo.com
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Wednesday March 17 6:56 PM ET
Oil Up On Supply Hopes, Gold Steadies
NEW YORK (Reuters) - Oil prices closed above $15 a barrel for the first time in five months
Wednesday on growing confidence that production cutbacks may finally have a real effect on
trimming the world oil supply glut.
In other commodity markets, gold prices steadied amid jitters about possible gold sales by the
International Monetary Fund. Grain and meat prices were buoyed by hopes for government food
aid shipments.
At the New York Mercantile Exchange, crude oil for April delivery closed 59 cents higher at
$15.05 a barrel, drawing support from news that Saudi Arabia's state oil firm had begun
notifying customers of smaller shipments starting in April.
Members of the Organization of Petroleum Exporting Countries led by Saudi Arabia pledged
with non-OPEC producers last week to cut global oil production by more than 2 million barrels
per day. Russia Wednesday also pledged cuts.
Saudi Arabia's 585,000 barrel per day output cut in the pact, the third within a year, represents
34 percent of OPEC's promised cut of 1.718 million barrels. Non-OPEC producers Mexico,
Norway and Oman pledged an additional 286,000 barrels in cuts.
OPEC is expected to ratify the cuts at a March 23 meeting in Vienna. A Saudi source said
Wednesday the state oil firm, Saudi Aramco, had begun notifying customers of planned cuts.
''There is no doubt in my mind the Saudis are determined to raise oil prices,'' said Robert
Mabro of the Oxford Institute of Energy Economics.
Crude prices also drew support from a strong rally in gasoline and heating oil after a weekly
report from the American Petroleum Institute issued late Tuesday showed sharp drops in U.S.
stockpiles of those products.
The API said distillate stocks, which include heating oil, fell 4.5 million barrels in the week
ended March 12, while U.S. gasoline inventories fell by 7.0 million barrels.
As a result, April gasoline closed 2.53 cents a gallon higher at 47.20 cents and April heating oil
1.91 cents a gallon higher at 39.68 cents.
dailynews.yahoo.com
+++++++++++++++++
Thursday March 18 1:17 AM ET
Oil Sails Higher
By Neil Fullick
SINGAPORE (Reuters) - Oil prices climbed to fresh highs in Asia Thursday as concrete
evidence emerged that oil producers were implementing plans to cut world supplies by two
million barrels per day, traders said.
Saudi Arabia, the world's biggest oil exporter, issued notices to Japanese and South Korean
customers that April supplies will be cut, Asian oil traders said.
May Brent crude futures on the Singapore International Monetary Exchange (SIMEX) climbed
17 cents to a four-month high of $13.44 per barrel.
New York Mercantile Exchange (NYMEX) April crude futures rose 25 cents to $15.30 per
barrel, matching a five-month high.
''The market has been swept up in light volume,'' Matt Sims, a broker with ED&F Man said.
''The fact that producers are already cutting back exports to Asia has got to be the news driving
it.''
Markets were spurred more than four percent higher overnight after several producers said they
would start telling customers of cutbacks following last week's meeting at The Hague where
they agreed to cut supply.
The first concrete evidence of the cuts emerged in Asia earlier Thursday, with Japanese traders
saying they had received notices that their import requirements for April would be cut 11-12
percent.
South Korean refineries were told by the kingdom that supplies in April would be cut 6-9
percent and Taiwan was told cuts would total around six percent.
Overnight, Iran said it would implement its 264,000 bpd cut from April, with Asia feeling the
pinch from the middle of that month.
Non-OPEC Oman said it would cut back supply from May and Qatar said it would inform
customers about cuts in the first few days of April.
Saudi Arabia agreed at The Hague to cut 585,000 bpd from its production in a bid with other
producers to drag the oil market from its worst crisis in 20 years.
Brent averaged just $13.34 per barrel last year, the lowest in more than 20 years, and OPEC
lost more than US$50 billion in revenues owing to the slump in prices.
In October 1996, Brent had sailed to more than $25 per barrel.
The Organization of Petroleum Exporting Countries is looking to ratify the Hague deal at its
Vienna meeting next week.
Before that Gulf Arab oil ministers will meet in the United Arab Emirates Saturday to discuss
the production cutbacks.
To maintain the price rally, traders are looking for evidence of an acceleration in the draining of
global oil stocks, which are estimated to be in a surplus of as much as 500 million barrels in a
world market that consumes around 75 million barrels per day.
While the amount of oil in storage in industrialized countries has eased a little in recent months,
there is still four or five more days of inventory cover than analysts estimate as an operational
norm.
dailynews.yahoo.com
You can see what they are talking about at
oilworld.com
Oil prices close above $15 a
barrel Wednesday
Copyright © 1999 Nando Media
Copyright © 1999 Reuters News Service
NEW YORK (March 17, 1999 7:25 p.m. EST
nandotimes.com) - Oil prices closed above $15 a
barrel for the first time in five months Wednesday. The
price increase comes from renewed confidence that
production cutbacks may finally have a real impact on
trimming the world oil supply glut.
In other commodity markets, gold prices steadied
amid jitters about possible gold sales by the
International Monetary Fund. Grain and meat prices
were buoyed by hopes for government food aid
shipments.
At the New York Mercantile Exchange, crude oil for
April delivery closed 59 cents higher at $15.05 a
barrel, drawing support from news that Saudi Arabia's
state oil firm had begun notifying customers of smaller
shipments starting in April.
Members of the Organization of Petroleum Exporting
Countries led by Saudi Arabia pledged with non-OPEC
producers last week to cut global oil production by
more than 2 million barrels per day. Russia on
Wednesday also pledged cuts.
Saudi Arabia's 585,000 barrel per day output cut in the
pact, the third within a year, represents 34 percent of
OPEC's promised cut of 1.718 million barrels.
Non-OPEC producers Mexico, Norway and Oman
pledged an additional 286,000 barrels in cuts.
OPEC is expected to ratify the cuts at a March 23
meeting in Vienna. A Saudi source said on Wednesday
the state oil firm, Saudi Aramco, had begun notifying
customers of planned cuts.
"There is no doubt in my mind the Saudis are
determined to raise oil prices," said Robert Mabro of
the Oxford Institute of Energy Economics.
Crude prices also drew support from a strong rally in
gasoline and heating oil after a weekly report from the
American Petroleum Institute issued late Tuesday
showed sharp drops in U.S. stockpiles of those
products.
The API said distillate stocks, which include heating
oil, fell 4.5 million barrels in the week ended March 12,
while U.S. gasoline inventories fell by 7.0 million
barrels.
As a result, April gasoline closed 2.53 cents a gallon
higher at 47.20 cents and April heating oil 1.91 cents a
gallon higher at 39.68 cents.
Charles |
