Russia announces cut in oil exports of 150,000 barrels a day

Better run out and buy one of those "Segways".

By cutting 150,000, Russia is reducing production by about 2%. That doesn't sound like much, especially compared to Norway and Mexico, who are cutting comparable amounts off of already lower total production. But I'm not an expert, and small changes can lead to big price swings in some commodities. However, I was reading (here on FR, I think) about a week ago that the Russian oil industry is a very private, free-enterprise operation. Almost none of the production is under direct government control. The production companies are probably parts of an association, but I doubt that anyone has effective power to enforce production limits in Russia. They need money and will sell every barrel they can extract.

From It Is Time to Declare War by Leonard Peikoff

Fifty years ago, Truman and Eisenhower surrendered the West's property rights in oil, although that oil rightfully belonged to those in the West whose science, technology, and capital made its discovery and use possible. The first country to nationalize a Western oil company, in 1951, was Iran. The rest, observing our frightened silence, hurried to grab off their piece of the newly available loot.

If America is not going to take back what is rightfully ours in the Middle East, then at least we should open up our own soil to exploration and production. But thanks to Traitor Lott, it looks like that is not going to happen:

Senate GOP gives up on energy vote

Of course, maybe the price of gasoline needs to get back to $2 per gallon before the cowards and traitors in the senate will release their death-grip on domestic oil production.

I have never and will never understand this. Why the hell do we let one cartel literally determine our economic future? I just don't get it. We should have been free from the chains of foreign oil decade ago.

Maybe the US should start cutting "aid" funds for these countries by the same amounts?

Gee - that was a brief alliance.

THINK HIROSHIMA

-- think fast!

Wrong.

Yes, this does not sound like much on the surface. But it is the very amount that will turn an alliance of both OPEC and non OPEC producers around to jeapardize everything including the war on terrorism.

On Nov 12th: OPEC, in a last-minute lobbying effort before its members meet in Vienna Wednesday to discuss production cuts, is attempting to convince non-OPEC producers such as Russia, Norway and Mexico to cut output by 500,000 barrels a day. Saudi Arabia, OPEC's heavyweight and the world's largest exporter, has proposed the cartel cut its own output by 1.5 million barrels a day.

It then looked like that might not happen thnaks to Russia even though Mexico tried to coax Russia in Vienna into the price hike.

-- During a time of war!

So, now with the just-opened Caspian oil pipeline the Russians want to play the role of OPEC themselves, perhaps.

Russia -- you are either with us or the terrorists.

It looks like Russia just voted for the terrorists.

I feared this would happen.

The US, Russia, Norway, Mexico, Kazakstan, Canada, and Turkmenistan need to form our own oil organization. Sell it for half the price of OPEC oil, but only to countries that boycott OPEC.

If it were to happen, the UK, Japan, and Australia would jump on board rather quickly, while the EU rots.

Wednesday December 5 5:00 PM ET

Russia Pledges Cut in Oil Exports

By ANGELA CHARLTON, Associated Press Writer

MOSCOW (AP) - Russia came through with a long-awaited pledge Wednesday to reduce oil exports by 150,000 barrels a day - enough to appease the international petroleum industry but, analysts say, unlikely to threaten recent economic growth in Russia driven mostly by oil.

The carefully calculated cut by the world's second-largest oil producer was decided at a meeting between top government officials and the heads of Russian oil companies. Prime Minister Mikhail Kasyanov said the companies represented - including Lukoil, Surgutneftegaz, Yukos, Tyumen Oil Co. and Sibneft - accounted for 95 percent of Russia's oil exports.

The price of Brent crude jumped as much as 96 cents on the International Petroleum Exchange in London at word of the promised cut, but fell into negative territory on doubts about whether Russia would follow through on its pledge. Brent futures settled at $19.22, down 7 cents. On the New York Mercantile Exchange, January contracts of light, sweet crude fell 16 cents to $19.49 a barrel, after jumping as much as 65 cents early in the day.

Oil prices slumped with the global economy this year and plummeted following the Sept. 11 attacks in the United States. Russia's earlier refusal to make big cuts irritated OPEC (news - web sites) members and non-member nations dependent on the industry. Last month, Russia's pledge to cut oil production and exports by 50,000 barrels a day for the rest of the year was criticized as too small to make a difference in prices.

Other oil-producing nations praised Wednesday's promised cut by Russia, although no time limit was set and the government did not indicate which companies would cut exports. Russia currently produces 7.2 million barrels a day.

OPEC has agreed to reduce output by 1.5 million barrels a day as of Jan. 1 on condition that non-OPEC members, including Norway, Russia and Mexico, also agree to cuts amounting to 500,000 barrels a day.

Norway already has agreed to reduce production by 100,000 to 200,000 barrels a day, while Mexico has promised to cut its production by 100,000 barrels a day. [Therefore expect the OPEC cut as well since the 500,000 barrel threshold will be hit! "Carefully calculated."]

Norway's deputy oil minister Brit Skjelbred said Russia's move was ``positive'' and would help Norway calculate its contribution. Kuwait's oil minister Adel al-Subeih told The Associated Press, ``This is a praiseworthy, positive step. It takes us much closer to arriving at an agreement.''

The announcement came after weeks of negotiations among OPEC and Russian officials and oil barons, whose companies have been a key stimulant of Russia's economic recovery after a decade of post-Soviet decline. They have been loath to give up market share - even as profit margins fall - and the government has been reluctant to lose tax revenues.

Valery Nesterov, an oil analyst with the Moscow-based Troika brokerage, said the losses would be barely felt in Russia because exports in winter often slump up to 150,000 barrels a day from harsh conditions at oil fields in the arctic and Siberia.

Oil analyst Mehdi Varzi, director of Varzi Energy in London, called it a ``positive step signaling Russia is willing to cooperate with OPEC.'' However, he said the cartel would need to know the time period for the export cut and whether it applies to refined oil products as well as crude.

"Carefully calculated." as in chess.

Outrageous. During a time of war!

You thought oil prices were to go down?
First humor Bush in Crawford where nuclear weapons are promised a cut by 2/3rds; then open the Caspian pipeline; and then go along with OPEC policy inimical to the U.S.

It's a sad state of affairs when you can't help admiring the way the "former" commies clean the clocks of our deadeyed capitalists.

What a bunch of chumps.

I have never and will never understand this. Why the hell do we let one cartel literally determine our economic future? I just don't get it. We should have been free from the chains of foreign oil decade ago.

If it weren't for the 'Enviro-wackos', who think that gas magically comes from a pump and electricity magically comes from these handy holes in the wall, we could have been free from depending on foreign oil. We could tell the Arabs to take their oil and shove it, because we could use our own. We can't drill for oil, because of the enormous amounts of environmental regulations.

Maybe it's not so bad elsewhere in the USA, but it's really bad here in California. The last oil refinery built here was in 1976, and I know that more than one have shut down since then. In other words, We can't even build oil refineries to refine what we buy from the Arabs.

As long as we can't produce or refine our own oil, we will remain shackled to those who do.

War On Terrorism: Diplomacy - US and Russia on verge of deal over oil and missiles

"RUSSIA AND the United States may be on the verge of a strategic and diplomatic grand bargain over missile defence, oil and Nato, as part of an extraordinary rapprochement made possible by the transformation of the international scene since 11 September."