Wednesday, March 12, 2003
OPEC prepared to increase oil supply
Posted by sintonnison at 6:26 AM
in
OPEC
www.smh.com.au
March 12 2003
OPEC, which produces a third of the world's oil, is ready to expand sales in a bid to lower prices should a war with Iraq disrupt supplies from the group's third-largest member.
The Saudi oil minister, Ali al-Naimi, said markets had enough oil for now. Officials from Qatar, Algeria, Nigeria and Venezuela said the group could increase output, and that the US had no need to use its emergency reserves to lower prices.
"We will do whatever we can to avoid a shortage," OPEC President Abdullah bin Hamad al-Attiyah, who is also Qatar's oil minister, told reporters in Vienna yesterday.
Oil prices climbed to a 30-month high of $US34.55 a barrel in London yesterday, boosted partly by concerns that a US attack on Iraq may disrupt Middle East oil supplies. A three-month strike has also crippled crude oil exports from Venezuela, leaving US inventories at refineries and other businesses close to a 28-year low.
OPEC is to meet today in Vienna and has been split on suspending export quotas in the event of war.
OPEC Secretary-General Alvaro Silva said that was "not on the agenda". Iran's oil minister, Bijan Namdar Zanganeh, said OPEC "must refrain from taking any politically motivated measures" that would appear to support an invasion of Iraq.
Saudi Arabia, the world's biggest oil exporter, could produce as much as 10.5 million barrels a day within 90 days, Saudi officials say, which is about 1.7 million barrels a day more than it was producing in February.
Not all ministers, however, are optimistic about potential increases. The Organisation of Petroleum Exporting Countries was operating at "almost full" capacity, United Arab Emirates Oil Minister Obaid bin Saif al-Nasseri said.
"We all know that OPEC is doing what it can," said Jan Stuart, head of research for global energy futures at ABN Amro in New York. "In the best of cases OPEC might just be able to fill the gap. The timing is awkward because of a demand increase from US refiners just around the corner."
US refiners usually complete maintenance and begin producing gasoline for their peak summer driving season over the next few weeks, which boosts crude oil demand.
Any move by OPEC to boost production may be tempered by concern about slack demand and the possibility of a glut after any conflict in Iraq.
"OPEC is a bit split," said Lawrence Eagles, an analyst at GNI-Man Financial in Belfast. "OPEC is paranoid that raising production is going to result in a second-quarter glut," he said. "What matters is what Saudi Arabia says they are prepared to do."
Bloomberg
Nation paying more on average at the gas pump-Hampton Roads' prices leveling off
Posted by sintonnison at 6:23 AM
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oil us
www.dailypress.com
By Kimball Payne
Daily Press
March 11, 2003
Skyrocketing pump prices in California sent the nation's average gasoline prices soaring, even as prices have leveled off for Hampton Roads motorists in the past two weeks.
Regular unleaded gasoline prices at self-service stations in Newport News, Norfolk and Virginia Beach have stayed around $1.59 a gallon since Feb. 25, according to AAA's daily fuel gauge report. But it is a different story out West, where refineries switched to production of gasoline with corn-based fuel additives, causing temporary shortages.
On Monday, AAA estimated an average price of $2.21 a gallon for regular unleaded in San Francisco, $2.08 a gallon in San Diego and $2.04 a gallon in Los Angeles.
The national average price per gallon, including taxes, was about $1.69 Monday, according to the AAA's report, which surveys more than 60,000 gas stations nationwide. The price is nearing the record $1.72 a gallon it recorded on May 15, 2001.
The easing of constant price hikes at the pump has been a big relief to local motorists, however. From Feb. 10 to Feb. 21 prices locally leaped 10 cents a gallon to an average unleaded price of $1.593. Fuel costs have budged only slightly lower since then to $1.585 a gallon.
"They're high, but they've been high," Hampton resident Carolyn Lockett, said Monday about the prices she's seen while refueling her new red Ford Expedition. "They're pretty much stable now. I used to drive an Escort, but now I'm in a big SUV, so it's a big difference." She added California's prices "make me feel good that I'm down here."
Analyst Trilby Lundburg said the increase of just over a nickel a gallon was nearly entirely due to California refineries switching over to corn-based additives from MTBE, an additive that is blamed for polluting drinking water after it leaked.
That change has temporarily cut the state's gas supply by 10 percent and helped drive up prices, Lundburg said.
AAA Mid-Atlantic officials said gas prices were high nationally because of the tension surrounding war against Iraq, Venezuela's ongoing political crisis which has curtailed their oil exports, and this year's cold winter which has created more demand for heating oil.
Gasoline prices are likely to remain high until the international crisis over Iraq is settled, Lundburg said.
Local fuel costs have eased a bit, experts said, because demand has softened as motorists are realizing the prices at the pump aren't going to plunge soon.
"Our hope is that the near-record highs are temporary, and there's no reason for gas prices not to go back down," said Deborah DeYoung, a AAA Mid-Atlantic spokeswoman in Fairfax.
San Francisco and Wailuku, Hawaii, recorded the highest price on the AAA survey at $2.21 per gallon. Georgia registered both of the lowest prices nationally, with Atlanta averaging $1.52 and Macon $1.51.
The national average price for mid-grade gasoline, including taxes, was $1.79 and $1.86 for premium.
The Associated Press contributed to this report..
Kimball Payne can be reached at 247-4765 or by email at kpayne@dailypress.com
Chevron halts its import of Iraqi oil
Posted by sintonnison at 6:22 AM
in
Big Oil
www.bayarea.com
Posted on Tue, Mar. 11, 2003
By Rick Jurgens
CONTRA COSTA TIMES
SAN RAMON - Oil giant ChevronTexaco Corp., which accounted for 25 percent of U.S. imports of Iraqi crude oil in 2002, hasn't contracted for any shipments from Iraq for a month because of uncertainties related to the threat of war, according to a company spokesman.
"The most recent lifting by the company of Iraqi crude was in late January or early February," said Chris Gidez, a ChevronTexaco spokesman.
Some news reports suggested that San Ramon-based ChevronTexaco -- which imported 41 million barrels of Iraqi crude last year, according to the U.S. Energy Information Administration -- turned off the spigot in order to avoid negative publicity or as a political statement.
But Gidez said that ChevronTexaco's action wasn't the result of a "decision or policy per se" regarding Iraqi oil. "What you look for is reliable, economic sources" of crude oil, and Iraq doesn't fit the bill currently, Gidez said. ChevronTexaco hasn't ruled out future buys of Iraqi crude, he said.
Iraq sits atop the world's second-largest reservoir of oil. While Iraqi oil exports were banned by United Nations sanctions after the Gulf War of 1991, since 1996 ChevronTexaco and other U.S. oil refiners have bought Iraqi crude under the auspices of a UN humanitarian program known as "Oil for Food."
ChevronTexaco imported 3.3 million barrels of Iraqi crude oil during December, all for use at its Richmond and El Segundo refineries. For the year, ChevronTexaco imported 30.8 million barrels of Iraqi crude into California.
During December, Iraq was the source of about one-third, or 923,000 barrels, of the 2.8 million barrels of oil that ChevronTexaco imported for processing at its Richmond refinery, which converts up to 225,000 barrels a day, or about 7 million barrels a month, into gasoline and other products. A barrel is 42 gallons.
All of Richmond's December imports came from the Gulf region: 1.4 million barrels from Saudi Arabia and two 240,000-barrel shipments, one from Kuwait and one from the United Arab Emirates. Domestic crude oil used at the refinery is not reflected in the EIA data.
On Feb. 18, a few weeks after Iraq dispatched its last shipment of oil to ChevronTexaco, Chief Executive Dave O'Reilly told an industry conference in London that it gathered "against a backdrop of conflict and civil unrest -- from Iraq to Venezuela to the Korean Peninsula."
"Petroleum isn't the reason for these conflicts," O'Reilly added. "But it's no coincidence that energy is a central element in each."
Opponents of a U.S. attack on Iraq have frequently argued that a desire to control that energy wealth drives U.S. policy. O'Reilly acknowledged that a majority of Europeans buy that argument: "'No blood for oil' has caught on partly because our industry's reputation is so impaired that the protesters can discredit action in Iraq simply by associating it with us," he said.
The oil industry should respond by stepping up public relations activities to enhance its reputation and by improving its human rights and environmental performance, O'Reilly said.
OPEC president insists group would boost output to try to avoid wartime crude
Posted by sintonnison at 6:21 AM
in
OPEC
www.dailyherald.com
Associated Press
Posted March 11, 2003
VIENNA, Austria - OPEC will increase its oil production and possibly even suspend its current output quotas to keep the world supplied with ample supplies of crude in the event of a war with Iraq, the group's president said Monday.
Members of the Organization of Petroleum Exporting Countries can pump an additional 3-4 million barrels of fresh oil a day, and they are prepared to exhaust this spare production capacity if a war seriously disrupts exports from the Persian Gulf, said OPEC President Abdullah bin Hamad Al-Attiyah.
OPEC's secretary general and oil ministers from Iran, Algeria and Venezuela played down the possibility that the group might suspend its output ceiling, currently set at 24.5 million barrels a day. Al-Attiyah indicated he favors a greater degree of flexibility, without actually endorsing a temporary suspension.
"OPEC will do the most it can to avoid any shock in the market," he told reporters ahead of a policy meeting Tuesday at OPEC headquarters in Vienna, Austria.
OPEC, which pumps about a third of the world's crude, is already exceeding its target as members cash in on prices that have soared to 12-year highs amid fears of a war-induced supply shortage from Iraq.
A conflict would almost certainly disrupt Iraq's daily shipments of 2 million barrels, but at least one OPEC member - the United Arab Emirates - expressed doubts about the group's ability to cover a larger shortfall if fighting spreads beyond Iraq's borders.
"OPEC should not be blamed," Al-Attiyah said as he arrived at a Vienna hotel. "We will do whatever we can, but this is in accordance to our capacity. When we reach a level that we cannot exceed, then we cannot do anything."
Al-Attiyah said the market was already well supplied with crude. Saudi Arabia's oil minister Ali Naimi, speaking to reporters upon his arrival at a different hotel, agreed but gave no further details.
However, the United Arab Emirates' oil minister, Obaid bin Saif Al-Nasseri, warned it would be "very difficult" for OPEC to pump enough oil to cover a simultaneous shortfall in crude exports from Iraq and northern Kuwait.
Kuwait, which hosts most of the U.S. troops that are poised to attack Iraq, has said that in the event of war it would shut down its northern oil fields as a precaution against a possible Iraqi counterstrike. Such a step would reduce Kuwait's output by around 700,000 barrels a day, or about a third of its current production.
Al-Nasseri's comments suggested that the United States and other major oil-importing countries would need to rely on their own strategic petroleum reserves as a cushion against a serious disruption in supply.
The United States and other major importing countries want OPEC to maximize production if a war threatens supplies and causes prices to spike. U.S. Energy Secretary Spencer Abraham, due in Vienna Tuesday on separate business, said in London that he might meet here with oil ministers from leading OPEC producers. Al-Attiyah said Abraham had so far not requested to meet with him.
Some analysts have suggested that large importing countries and OPEC - two often opposing camps - might be trying to coordinate an increase in OPEC output with a release of crude from importers' strategic reserves in an effort to head off a war-induced disruption.
Despite Al-Attiyah's claim that OPEC has "3-4 million barrels" in daily spare capacity, it was not clear how much higher the cartel could go in satisfying U.S. demands. Al-Nasseri said the United Arab Emirates' capacity of about 2.5 million barrels a day was already "about full." Aside from Saudi Arabia and perhaps Nigeria, most other OPEC members are already believed to be producing at their limits.
OPEC heavyweight Saudi Arabia, which by some estimates is pumping at a rate of 9 million barrels a day, could raise its output to 9.5 million barrels a day within a month and 10.5 million barrels a day within three months.
Yet, not all of OPEC's extra capacity is likely to be available right away. Al-Attiyah's figure for OPEC's production potential appeared to include Venezuela's nominal capacity of 2.35 million barrels a day, yet Venezuelan exports are still recovering from a crippling strike and analysts have suggested it could be months before that country resumed pumping at its earlier levels.
OPEC raised its output target by 6.5 percent in January, in an unsuccessful effort to keep a lid on rising prices. Prices for U.S. light, sweet crude have since reached a post-1991 peak of $39.99.
April contracts of U.S. crude fell 51 cents to close at $37.27 a barrel. Brent crude futures for April delivery closed 35 cents lower at $33.75 in London.
Several OPEC oil ministers attributed high prices to war hysteria and argued that there is plenty of oil to meet demand. Iran's Oil Minister Bijan Namdar Zangeneh warned Monday that OPEC shouldn't take any decision that would look appear to support a U.S. invasion of Iraq, Iran's state-run IRNA news agency reported.
US gas prices hit 21-month high, average $1.68 in N.E.
Posted by sintonnison at 6:19 AM
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oil us
www.boston.com
By Bloomberg News, 3/11/2003
WASHINGTON - US retail gasoline rose for the 12th week in 13, reaching $1.712 a gallon for a 21-month high, the US Energy Department said in a weekly report. The price was 0.1 cent below the record reached in May 2001.
The average nationwide price for regular grade gasoline in the week ended yesterday was up 2.6 cents from the previous week and up 48.9 cents, or 40 percent, from $1.223 a year earlier, government data showed. The average is based on a survey of about 900 filling stations.
Pump prices have risen as a nationwide strike in Venezuela hobbled the petroleum industry in the fourth-largest supplier of crude oil to the United States.
Refiners were forced to pay more for alternative supplies and passed along the higher costs to consumers. US crude supplies are near 27-year lows, and crude prices last week reached a 12-year high.
The latest average price was the highest since a record $1.713 in the week ended May 14, 2001, according to the Energy Department. Prices rose that year partly because of shortfalls of cleaner-burning fuels required in large US cities during warmer months.
Gasoline was most expensive on the West Coast, where prices rose the most of any US region in the latest week. West Coast regular gasoline averaged $1.993 a gallon, up 6.1 cents from the previous week, the Energy Department said. Prices in Los Angeles and San Francisco have already surpassed $2 a gallon.
In the Midwest, gasoline averaged $1.69 a gallon, up 2.6 cents from the previous week and up 46 cents from a year earlier. Gasoline in New England was $1.68, up 0.5 cent from the previous week and up 47.5 cents from a year ago. The price in the Rocky Mountain region averaged $1.667, up 2.1 cents from a week ago and up 49.8 cents from a year ago.
This story ran on page F5 of the Boston Globe on 3/11/2003.
© Copyright 2003 Globe Newspaper Company.