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Puck
The Texan
Joined: 05 Jan 2004
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 Wed Aug 11, 2004 12:03 pm Saudi Says Can Pump More Crude; Prices Fall |
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Saudi Says Can Pump More Crude; Prices Fall
Wednesday, August 11, 2004
Top world oil exporter Saudi Arabia vowed Wednesday to raise supplies to meet any extra energy demand, and worldwide crude prices eased a bit from record highs.
Saudi Oil Minister Ali al-Naimi (search), in a statement carried by the state press agency SPA, said the kingdom had pumped 9.3 million barrels per day (bpd) of crude during the past three months in a bid to cool world oil prices and added the country could immediately tap spare production capacity of more than 1.3 million bpd if needed.
He said that in addition to the 9.3 million of crude, Saudi was also pumping 700,000 bpd of light condensates and gas liquids. Those extra volumes are not counted under OPEC quota restrictions.
Naimi's statement said demand for Saudi crude in September would be "more than 9.3 million barrels daily and it will be met in full with no exclusions or reductions."
Crude oil for September delivery fell 80 cents to $43.67 a barrel on the New York Mercantile Exchange (search). Prices had reached an all-time high of $45.04 a barrel on Tuesday, the latest in a string of all-time highs that have been hit as markets fret about tight global supplies even as demand remains strong.
Investors were awaiting the release later Wednesday of weekly U.S. oil stock data, while also tracking the likely course of Tropical Storm Bonnie as it headed toward the Florida coast, a key production area.
The harsh weather system has already prompted at least five U.S. oil companies to suspend work at their offshore wells, prompting prices to spike higher before the Iraqi news tugged them back down.
Iraq's Southern Oil Co. has resumed pumping to two key southern export terminals after reaching a deal with a Shiite militia that had threatened to blow up the pipelines unless the company stopped production.
About 1.8 million barrels per day, or 90 percent of Iraq's exports, move through the southern port of Basra, and any prolonged shutdown in the flow of Iraq's main money earner roils energy markets.
The militia deal did ease supply fears but observers stressed that plenty of other equally potent concerns remain.
Russia's largest exporter Yukos (search) continues to skirt bankruptcy; South American producer Venezuela holds a referendum Aug. 15 on President Hugo Chavez' rule that could hit supplies there; and simmering unrest in Nigeria � Africa's largest supplier � has also stoked concern.
"You have Venezuela, you have Nigeria, you have Iraq, you have Yukos, back and forth," said Esa Ramasamy, the editorial manager for oil in Asia at Platts, the energy market analysts.
"And every day in this world you have one refinery than is going down: they all contribute to the bullish factor," Singapore-based Ramasamy said Wednesday.
The U.S. crude stock data due out later Wednesday were expected mostly to show a modest decline compared with last week.
A Dow Jones Newswires survey said six of 10 analysts surveyed expect crude stocks to show a decline of 900,000 barrels to 2.5 million barrels. But some analysts cautioned that a projected decline in refinery operations combined with strong imports could boost stockpiles.
Reuters and the Associated Press contributed to this report.
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