OPEC may up production; NYMEX falls $1.35
From the National Desk Published 12/30/2002 7:15 PM View printer-friendly version
NEW YORK, Dec. 30 (UPI) -- Crude futures tumbled Monday after Venezuela again vowed to gets its strife-ridden oil industry back in operation and OPEC ministers indicated that an increase in crude production was possible in the coming weeks.
The bearish news was by no means set in stone, however it was real enough to prompt a busy pre-New Year's sell-off that sent February prices down $1.35 to $31.37 per barrel after gaining as much as 75 cents earlier in the day and reaching a two-year high of $33.65 per barrel.
The sudden turnaround after a week of gains wrapped around Christmas was also seen in the NYMEX refined products pits where January gasoline fell more than 5 cents per gallon and heating oil fell 4 cents per gallon.
February crude closed 50 cents lower at $29.66 per barrel on London's International Petroleum Exchange.
Much of the selling on NYMEX appeared to be profit-taking ahead of the holiday and was based in part on media reports from the Middle East that OPEC was inclined to increase its output of crude next month by some 500,000 barrels per day to offset shortfalls in Venezuela caused by political unrest and a stubborn strike against the nation's oil industry.
Venezuelan President Hugo Chavez vowed Sunday to break the strike and get the state oil company, PdVSA, back to its full production capacity of nearly 3 million barrels per day of crude and refined fuels by the end of January. Venezuela is the world's fifth-largest oil exporter.
"My plans are for an offensive and an attack," Chavez said in a broadcast address.
As they had with Chavez's past demands that the strike end, opposition leaders showed no signs of giving in Monday on their demands for early elections -- something that Chavez has repeatedly refused to agree to.
Horacio Medina, president of a group of striking oil managers, told The New York Times Sunday that the opposition would urge protestors to keep up the pressure on Chavez in January, possibly by refusing to pay taxes.
"People are still willing to stay out of work for many more days," Medina said.
Meanwhile, tensions between the United States and Iraq continued to simmer Monday. While additional U.S. forces moved into the Persian Gulf region, a senior Iraqi military official Monday told a sympathetic group of visitors from Spain that the U.N. arms inspections would uncover no signs of an underground weapons of mass destruction development program.
"My country stands on a solid ground and we do not fear any military confrontation with the U.S. and Britain, which claim that we still possess weapons of mass destruction," said Brig. Gen. Amer Rashid al-Saadi. -0- (Reported by Hil Anderson, UPI Chief Energy Correspondent)