Bill Richardson News

OPEC has seemingly bowed to U.S. pressure for cheaper oil by agreeing to higher output limits, immediately agreeing to turn up the taps by 1.45 million barrels daily, or seven percent. Iran, OPEC’s second largest producer, opted out of the deal, saying it feared a price plunge and complaining about interference from Washington. The action, which has been anticipated given the strong political pressures placed on the OPEC ministers, immediately sent petroleum prices into a tailspin, with Brent futures dropping $1.26 to $24.25 per barrel. OPEC won applause from the Clinton administration, which said there was now no need to release national emergency supplies to ease election year political pressure from consumers irate at high gasoline prices.

OPEC has seemingly bowed to U.S. pressure for cheaper oil by agreeing to higher output limits, immediately agreeing to turn up the taps by 1.45 million barrels daily, or seven percent. Iran, OPEC's second largest producer, opted out of the deal, saying it feared a price plunge and complaining about interference from Washington. The action, which has been anticipated given the strong political pressures placed on the OPEC ministers, immediately sent petroleum prices into a tailspin, with Brent futures dropping $1.26 to $24.25 per barrel. OPEC won applause from the Clinton administration, which said there was now no need to release national emergency supplies to ease election year political pressure from consumers irate at high gasoline prices.

Efforts by U.S. officials and oil firms to waive Jones Act shipping requirements and increase available oil tankers to the Northeast are so far dead in the water, the U.S. Department of Transportation said. "No one has made a credible case in the Executive branch or Congress to grant waivers or eviscerate the Jones Act," John Graykowski, acting administrator of the Maritime Administration told Reuters. The Jones Act -- which is overseen by the Department of Transportation's Maritime Administration department -- requires crude oil and refined products to sail in U.S. flagged ships when in U.S. waters. Amid tight tanker availabilities, oil firms have claimed difficulty in finding ships to transport oil released during October and November from the U.S.

U.S. oil prices rocketed almost two dollars Wednesday on word that Saudi Arabia would reduce February crude sales by five percent despite U.S. appeals to the OPEC cartel not to cut oil output too sharply, Reuters reported. February crude futures oil on the New York Mercantile Exchange (NYMEX) closed at $29.50, up $1.86 a barrel or some seven percent. This takes gains over the last eight trading sessions to more than $3.50 dollars a barrel. Saudi Arabia, which produced about 8.6 million barrels per day (bpd) or 11 percent of worldwide production in December has already said it will back a total OPEC output cut of 1.5 million bpd or around five percent when the cartel meets Jan. 17 in Vienna. U.S.

The incoming Bush administration warned on Friday that an oil production cut by OPEC next week would lead to higher energy prices for U.S. consumers. OPEC members will gather Jan. 17 in Vienna, where they are expected to agree to a roughly 1.5 million barrel-per-day reduction in the cartel's oil production levels. "Anything that lessens (oil) supply at a time of high demand means higher prices for American consumers," a Bush transition spokesman said. President-elect George Bush has made increasing domestic oil production a top priority. U.S. oil output is at its lowest level in half a century and foreign oil imports account for about 55 percent of domestic petroleum supplies. Low petroleum supplies have led to high prices for crude oil, gasoline and heating oil.

Oil cartel OPEC should reduce production by between 1.5 million and 2 million barrels per day (bpd) when it meets next week and shun U.S. calls for a smaller cut, Iraqi Oil Minister Amir Muhammed Rasheed told Reuters. "What we are trying in the meeting of 17th of January in Vienna is to reduce production so that we get back to the balance between supply and demand. And we think something like 1.5 to 2 million barrels a day would be a good figure," Rasheed said. "We are not in any way affecting the world economy or trying to create a recession; rather, we want to defend normal, fair prices," Rasheed said from Baghdad. The minister criticized U.S.

U.S. oil prices slid for the second straight day on March 9 as traders speculated on the size of a widely-expected supply cut by the OPEC producer cartel next week. On the New York Mercantile Exchange (NYMEX) crude oil for April delivery settled 38 cents lower at $28.01, little changed over the week. Traders turned cautious as a Saudi official said that though the oil producers' cartel was heading toward its second production cut this year when it meets next week, the magnitude of the cut remained undecided. Market estimates of the likely supply reduction range from 500,000 to a million barrels bpd out of the group's current 25.2 million bpd supply quotas. Despite the fall, traders said the market's outlook remains bullish as U.S.

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The Clinton administration said that oil prices have soared to "dangerously high" levels, and crude oil could be sold from the nation's emergency stockpile if already-tight supplies are disrupted by Y2K computer problems at the end of the year. Energy Secretary Bill Richardson sent to the White House contingency plans for selling oil from the Strategic Petroleum Reserve if necessary. The reserve, created after the 1970s Arab oil embargo, holds about 572 million barrels of oil in underground caverns. While the millennium computer bug problem is a major concern, Richardson also made it clear that the administration was closely monitoring current oil prices with an eye toward possible action if necessary.

It’s really quite amazing how one year and an additional $21 per barrel of crude can change people’s attitudes. It was less than 12 month ago that the price per barrel of oil hovered around the $9-10 mark, and international officials across the globe pleaded with leaders of OPEC to trim production in an effort to bolster pricing, which had lagged for two years running. Today, however, the tune is far different. A cold winter in the N.E. U.S., combined with per barrel pricing over $30 has consumers and local legislators screaming for action, with obvious good effect. The Clinton administration responded to growing worries that oil prices are out of control by announcing on Wednesday more supplies were headed to U.S. ports, but cautioned that gasoline prices may move higher.