Oil Slips But Holds Over $53 [$53.53/bbl]

Reuters ^ | March 8, 2005

[RWR8189]

LONDON (Reuters) - Oil prices eased on Tuesday as U.S. crude stocks looked set to rise for the fourth week in a row, but held above $53 on growing signals that OPEC was unlikely to boost output to tackle soaring energy bills.

U.S. light crude traded down 57 cents at $53.32 a barrel as dealers snapped up profits after Monday's $53.89 close, the highest in four months.

London's Brent crude fell 67 cents to $51.42 a barrel.

Iran's Oil Minister Bijan Zanganeh was the latest to say the cartel had little room for maneuver ahead of a March 16 meeting to discuss production in the Iranian city of Isfahan.

"The most OPEC can do in Isfahan is roll over production for a short period and to have another extraordinary meeting," Bijan Zanganeh told a news conference in Tehran on Tuesday.

Venezuela, Qatar and Algeria have all come out against raising output, and OPEC president Sheikh Ahmad al-Fahd al-Sabah of Kuwait said on Sunday that although prices were high, the market was well-supplied.

A foreign affairs adviser to Saudi Crown Prince Abdullah said on Monday prices should come down somewhat from current levels, but added that expecting a significant drop was unrealistic.

"Everybody realizes that at this level OPEC can't really do anything, they are still afraid that the market isn't really that tight," said Tony Nunan, a manager at Mitsubishi Corp. in Tokyo.

The group is usually reluctant to raise output ahead of the second quarter because the end of the northern hemisphere winter spells a slowdown in demand, while the summer driving season has yet to kick off.

Nigeria has called on other producers to help cut "excessive" prices. OPEC is already producing some 630,000 barrels per day (bpd) above its 27 million bpd limit, a Reuters survey showed.

INVENTORY BACKING

Claims by some OPEC members that the market's supply-demand balance is healthy are likely to get backing from U.S. data this week, which is expected to show a 1.7-million-barrel increase in crude inventories.

The U.S. Energy Information Administration releases its weekly inventory report at 10:30 a.m. EST on Wednesday.

If the forecasts from a Reuters poll of nine analysts are on target, it would mark the fourth consecutive week that crude stocks have risen and would put total U.S. commercial inventories at more than 300 million barrels.

U.S. gasoline stocks, which have risen sharply in the Gulf Coast over the past month while the other four regions of the country have remained in normal ranges, are expected to show a small draw of 300,000 barrels, the first in six weeks.

[RWR8189]

3/08/05 Session Contract Detail for April 2005

	Last				53.53
	Open High				53.87
	Open Low				53.87
	High				53.88
	Low				53.26
	Settle				53.89
	Change				-0.36
	Open Interest				211646
	Volume				0
	Last Updated				3/08/05 06:40:46

[em2vn]

This is such a great monetary scheme for the oil companies and the oil producing nations.
OPEC sets a per barrel increase, then kicks back a portion of the increase to the oil companies. The oil companies are able to pass along a large postion of the announced price increase to the consumers. Each party realizes greatly increased revenue while the consumer pays for the party.
Each quarter the oil companies announce record profits with the increasing cost of crude.If they were simply paying for an increased cost of crude they wouldn't be showing record increases.
Royal Dutch Shell and BP are having a great time putting their hands into the pockets of American consumers while OPEC has much extra cash to fund Islamic terrorists.
IMHO

[Redbob]

The only good news here is that we're paying them in "dollars" worth far less than they were just a couple years ago.

[Schwaeky]

The loss in strength in the dollar is all why prices are going so high.. Production is higher now than it was in the months after 9/11.. If we're going to sell our souls to free trade, keep the dollar strong for our domestic/service economy.... I'm sick and tired of paying $30 to fill up a car that used to be filled up on $14-15.

weakening the dollar was the worst single mistake Bush has made thus far....

[RWR8189]

It was less of Bush weakening the dollar, and more of taking steps to keep it from being artificially high, as we did in the late 90s.

[RWR8189]

It was less of Bush weakening the dollar, and more of taking steps to keep it from being artificially high, as we did in the late 90s.

[G32]

It's a tradeoff. Weaker dollar=less offshoring and more export potential.

Oil's the won place we get smacked for it. Time to build nuclear for as much electricity as possible.