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Opec heavyweights back production cut
Financial Times ^ | March 30 2004 | Carola Hoyos

Posted on 03/30/2004 9:43:19 PM PST by windchime

Most of the Organisation of Petroleum Exporting countries on Tuesday favoured a cut of 1m barrels a day in oil output, despite increased concern in consuming countries that high crude prices threaten the world economy.

Saudi Arabia, the world's biggest exporter of oil and Opec's most influential member, on Tuesday confirmed it wanted the group to reduce output to stem the rise in oil inventories in consuming countries and hinder a fall in prices as demand declines this spring.

Ali Naimi, Saudi Arabia's energy minister, said on Tuesday:"More oil now will make a glut in the market and force prices to collapse, something we don't want. "Throwing more oil on the market because of high prices where they are today, would be destructive."

Saudi Arabia - backed by Venezuela, Libya, probably Iran and many of the smaller Opec members, wants the group to implement its decision of last month to cut its quota by 1m b/d to 23.5m b/d.

As of Tuesday, only Kuwait and the United Arab Emirates appeared to be in favour of postponing the cuts.

But even if Saudi Arabia gets its way, as appears likely, it will face the delicate task of convincing consumers that they will not be left starved for oil.

Washington officials have already begun pressing producers not to make the cuts. Meanwhile, investment banks have begun to predict that oil will this year have an increasing impact on the world's economic recovery.

Goldman Sachs estimates that growth in the Group of Seven industrial countries will be 0.3 per cent lower in the next 9-12 months because of the rise in oil prices. In the US, the bank believes the fading effect of the tax cuts will bring the pinch to real incomes to the fore.

Michael Rothman, analyst at Merrill Lynch, said Opec was only partly responsible for the rise in oil prices, which on Tuesday was trading up 85 cents at $36.30 on Mymex, while London Brent crude climbed to $32.49 up by 75 cents.

Mr Rothman believes $5-$7 of the price is attributable to hedge funds, that have entered the market in record numbers. Some funds are seeking a sanctuary from a falling dollar by investing in oil futures - whose prices go up as the greenback falls.

"Opec's real dilemma is trying to get people to understand the difference between a cut that meets market requirements or a cut in supply that makes the market have to scramble for barrels," Mr Rothman said.

(Excerpt) Read more at news.ft.com ...


TOPICS: Business/Economy; Crime/Corruption; Foreign Affairs; Front Page News; Government
KEYWORDS: economy; election; energy; georgesoros; hedgefunds; oil; oilprices; opec; soros
Mr. Rothman believes $5-$7 of the price is attributable to hedge funds, that have entered the market in record numbers. Some funds are seeking a sanctuary from a falling dollar by investing in oil futures - whose prices go up as the greenback falls.

1 posted on 03/30/2004 9:43:20 PM PST by windchime
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To: windchime
With OPEC making cuts in production during a period of rising demand, A War for Oil doesn't seem like such an outlandish idea.
2 posted on 03/30/2004 9:49:44 PM PST by Plutarch
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To: windchime
In the US monopolys are illegal and are subject to federal action. As the world's sole super power, why in the hell do we tolerate such $hit?
3 posted on 03/30/2004 9:52:51 PM PST by Ursus arctos horribilis ("It is better to die on your feet than to live on your knees!" Emiliano Zapata 1879-1919)
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To: Ursus arctos horribilis
There's not much doubt who they want to see win the election.
4 posted on 03/30/2004 9:54:09 PM PST by Let's Roll (Kerry) is a self-confessed unindicted war criminal or... a traitor to his country in a time of war)
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To: Let's Roll
BTTT
5 posted on 03/30/2004 9:55:04 PM PST by Let's Roll (Kerry is a self-confessed unindicted war criminal or ... a traitor to his country in a time of war)
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To: Plutarch
Not too outlandish to me either.
6 posted on 03/30/2004 10:18:53 PM PST by windchime (Podesta about Bush: "He's got four years to try to undo all the stuff we've done." (TIME-1/22/01))
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To: Ursus arctos horribilis
Hedge Funds operate off-shore.  The usual suspects:

Google - Oil + George Soros

OIL was -> Re: Why George Soros went wrong  by Daniel Watkins    21 August 2000 10:53 UTC

Excerpt

from August 21,  2000 

i DO believe GS has been talking about this to their private client group and the partners, their denial notwithstanding. the big Q in my mind is this, fwiw: the oil companies do not want to become an issue, again, in the campaign if they can help it. i suspect they will do everything they can to keep prices at the pump tame until after early november and, of course, that will be just fine with the democrats who want to keep the failed energy policy of clinton/gore quiet until after the voting. so, the Q: will they be able to do it ? 

on one hand you have rubin's GS, who has a stake in a public "no problem" posture. on the other hand, they know better and are so informing their big customers.

GS = George Soros        rubin's GS = Robert Rubin - Citibank

The Invisible Robert Rubin

Will George Soros Panic the Market?

Iraq Revenue Watch: Monitoring Iraq Reconstruction Funds, ...   Soros initiated group

Balkan Repository Project - The Secret Financial Network Behind 'Wizard', George Soros  Marc Rich connection

Google + Marc Rich + Soros' Quantum Fund

Google + Marc Rich + George Soros + Oil

What Marc Rich Did James Higgins - NY Post - February 13, 2001

Investigating Marc Rich and his deals with Nigeria's Oil

The double life of Marc Rich  2-12-01 MSNBC

 


7 posted on 03/30/2004 10:22:47 PM PST by windchime (Podesta about Bush: "He's got four years to try to undo all the stuff we've done." (TIME-1/22/01))
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To: NormsRevenge; Peach; PhiKapMom
Ping to oil news.
8 posted on 03/30/2004 10:29:20 PM PST by windchime (Podesta about Bush: "He's got four years to try to undo all the stuff we've done." (TIME-1/22/01))
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Comment #9 Removed by Moderator

To: windchime
Thanks for the ping, that's the name that came to mind as I read the comment about hedge funds.

Soros.
10 posted on 03/30/2004 10:38:53 PM PST by NormsRevenge (Semper Fi Mac ... Support Our Troops! ... Kerry thread archive @ / ~normsrevenge ... Beat BoXer!!!)
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To: NormsRevenge
Yep, and X42's pardonee.
11 posted on 03/30/2004 10:50:00 PM PST by windchime (Podesta about Bush: "He's got four years to try to undo all the stuff we've done." (TIME-1/22/01))
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To: windchime
Our nation has no shortage of enemies these days, operating openly and without regard for the harm they have and could still inflict on the innocent.

And for what?
12 posted on 03/30/2004 10:59:03 PM PST by NormsRevenge (Semper Fi Mac ... Support Our Troops! ... Kerry thread archive @ / ~normsrevenge ... Beat BoXer!!!)
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To: windchime
Isn't Opec part of the axis of evil? We should ask them what they like better, their oil or our cruise missiles.
13 posted on 03/30/2004 11:18:45 PM PST by taxesareforever
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To: Ursus arctos horribilis
The Saudi swine should be made "an offer they can't refuse."
14 posted on 03/31/2004 12:15:33 AM PST by sheik yerbouty
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