I will believe the Saudis don't see any upcoming problems with Ghawar when they cancel one of their projects due to low oil prices. If they continue to be full steam ahead with increasing their capacity then I think they are aware that Ghawar may not be as robust in 5 years time as they would like us to believe.
Oil Rises as Bush Not Expecting Output Boost at Saudi Meeting
By Robert Tuttle and Margot Habiby
June 18 (Bloomberg) -- Crude oil futures rose for the first time in four days after a statement that President George W. Bush is not expecting announcements of increased oil production at a June 22 conference in Saudi Arabia.
``No one is expecting to see announcements of increased production,'' White House spokesman Tony Fratto said today. The meeting to discuss ways to stabilize prices will be held in the Red Sea port of Jeddah and involve producers, major industrial nations and banks.
``There were some hopes that there would be some substantive moves from Saudi Arabia from the meeting, but it looks like it's going to be something more akin to group therapy than moves to quell the market's fears about sufficiency of supplies,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York.
Crude oil for July delivery rose $2.67, or 2 percent, to settle at $136.68 a barrel at 2:44 p.m. on the New York Mercantile Exchange. The price reached a record $139.89 a barrel on June 16.
Oil also rose as a weakening U.S. dollar increased the appeal of commodities as an inflation hedge and after Chevron Corp. workers in Nigeria threatened to strike.
``The dollar collapsed this afternoon,'' said William Adams, managing director of JKV Global in Chicago. ``That's going to correlate inversely to the energy market.''
Oil has risen 97 percent in the past year as investors shielded themselves from the dollar's declining value. The currency traded at $1.5533 to the Euro, down from $1.5511 yesterday.
Nigeria Strike
A strike in Nigeria may start ``any moment from now,'' Jonathan Omare, secretary of the Chevron unit of Petroleum & Natural Gas Senior Staff Association of Nigeria, or Pengassan, said by phone today. Chevron's 350,000 barrels of daily crude production may be affected by the labor action.
Brent crude oil for August settlement rose $2.72, or 2 percent, to $136.44 a barrel on London's ICE Futures Europe exchange. Prices reached a record $139.32 on June 16.
The International Energy Agency, which advises 27 oil- importing nations on energy policy, said it's seeking an immediate increase in oil output at the Saudi meeting to ``calm markets'' in the wake of record crude prices.
``The main message that will be very good is if we see an increase in production now,'' Fatih Birol, chief economist at the IEA, said today in an interview in Istanbul. Oil producers should also agree ``to increase spare capacity for the next years to come. This is what the markets need to hear.''
Saudi Arabia will produce 9.7 million barrels of oil a day next month, an increase of 200,000 barrels above June's level, King Abdullah told United Nations Secretary-General Ban Ki-Moon, a UN spokesman said June 16.
Drilling Ban
President Bush called on Congress to lift a 27-year-old U.S. moratorium on offshore oil and gas drilling, putting himself in the middle of an election-year debate over energy policy.
``For many Americans there is no more pressing concern than the price of gas,'' Bush said at the White House today. ``Congress must face a hard reality. Unless members are willing to accept gas prices at today's painful levels, or even higher, our nation must produce more oil.''
The average U.S. pump price for regular gasoline fell 0.3 cent to $4.075 a gallon, AAA, the largest U.S. motoring club, said today. Prices rose to a record $4.08 a gallon on June 16.
July gasoline futures, which represent wholesale prices, rose 4.88 cents, or 1.4 percent, to $3.4667 a gallon in New York.
Oil stockpiles fell 1.24 million barrels to 301 million barrels last week, the fifth straight weekly decline, a U.S. Energy Department report today showed. Inventories have fallen 7.6 percent since the week ended May 9, Energy Department data show. _________________ Dismantle globally, renew locally!
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Wed Jun 18, 2008 5:01 pm Post subject: Re: Upcoming Saudi mtg "Group therapy" and no incr
jdumars wrote:
Don't look for a production hike from KSA. Anyone still think they have plenty of spare capacity?
Besides OilFinder2 that is, probably no one.
So we had 'credible reports' last Thursday and Friday that the Saudis would raise production by 500,000 bpd, which was changed to 200,000 bpd over the weekend, and now zero. Plus participants need to attend group therapy to make themselves feel better.
Anyone still think that the ongoing plunge in net US oil/product imports (down 7.3% year to date - and accelerating recently) just exists in the wild imagination of us doomers? _________________ It's already over, now it's just a matter of adjusting.
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