Monday, November 20, 2000
Iraq has set the stage for enough snags in its oil-for-food export program to keep overheated oil markets nervous about possible export disruptions until mid-January, oil traders and analysts said, Reuters reported. Yet weary of false alarms on Iraqi supply, traders say they will now need to see real evidence of a halt to Iraqi supplies before they believe it. "The market has already priced in a chance that Iraq will suspend oil exports. In order to drive the prices noticeably higher, we now need to see some specific actions," said Timothy Evans, analyst with IFR-Pegasus in New York. "We've been down this route before. The market has got a bit desensitized on Iraq. We're waiting for something to really happen," said Nauman Barakat of ABN Amro bank. Iraq is using the window between the U.S. election two weeks ago and January's presidential inauguration to win concessions on the four-year-old U.N oil-for-food program, analysts say. The next scheduled transition between six-month sales phases -- often a rocky time -- on December 5 already looks set to drag on as Iraq has asked that oil contracts sold in the current eighth phase be permitted to be sold into the middle of January. Both minor Iraqi requests like increased terminal charges at its Gulf port and major challenges to U.N. sanctions such as demands for Baghdad-controlled bank accounts could be used to justify slowing exports, said Raad Alkadiri, analyst with the Petroleum Finance Co. (PFC). This has instilled an 'Iraqi price premium' that will stop lofty U.S. oil prices falling far from $35 a barrel as long as a stretched global oil market remains uncertain about Iraq's five percent share of world exports. Many in the oil market believe that while sporadic interruptions to Iraqi exports will cut exports over the next two months there will not be a complete halt and if there is, it will be short-lived. Iraq has signed enough contracts over the current eighth phase of its program to keep exports going at 1.5 million barrels per day (bpd) until mid-January -- around 750,000 bpd below its recent export average. "While reduced export levels from December to mid-January seem probable, a full suspension of supplies seems far less likely" said a report from PFC said. Exports have already dropped from 2.7 million bpd just two weeks ago to 1.5 million bpd last week after Baghdad twice briefly suspended flows briefly into the Mediterranean on hitches in its request to be paid in euros rather than U.S. dollars. Yet signs are that Baghdad does not want to inflict apolitically charged halt to exports that would hurt its allies in the U.N Security Council such as France, as much as its chief opponent, the United States. "Baghdad risks losing the international goodwill that has been the basis for its diplomatic gains over the past few months," PFC report said. Despite regular threats from Baghdad to suspend exports, the longest stoppage of oil flow since the U.N. began to allow to export without an upper limit a year and a half ago, was for three weeks last November and December.


Hellenic Petroleum Profits Rise on Higher Exports

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J.F. Lehman Acquires Oldenburg's Heavy Equipment Group

J.F. Lehman & Company (JFLCO) informs it has signed a definitive agreement with Oldenburg Group Incorporated to acquire its Heavy Equipment Group, including both its defense and mining business units.

Wärtsilä Re-gasification system for Norwegian Ship Conversion

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