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FINANCE The News Mixico City, December 9, 1999.

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OPEC BITING INTO WORLD OIL RESERVES By RICHARD MABLY

Reuters

LONDON -- World oil inventories now are being drawn down so rapidly that consumers in the West might even be hit by retail supply outages this winter, the International Energy Agency (IEA) warned on Wednesday.

Stockpiles already depleted by the Organization of Petroleum Exporting Countries' (OPEC) supply curbs are being drawn down more quickly than expected by Iraq's decision to suspend exports because of a wrangle at the United Nations over a new resolution on sanctions.

"Without Iraqi output in December we run the danger of seeing some spot outages to consumers in the supply of heating oil or gasoline this winter," said David Knapp, the head of the oil markets division at the West's Paris-based oil watchdog.

Iraq previously was supplying 2.3 million barrels a day (bpd) to the 75 million bpd world market and says it will only resume sales under the original conditions of the U.N.'s oil-for-food exchange. The U.N. is likely to vote on a new sanctions resolution later this week.

Robert Priddle, the IEA's executive director, said in Washington on Tuesday that the agency was projecting a five million bpd shortfall in global oil supplies during December.

Priddle told reporters that if the millennium computer bug were to disrupt deliveries at the end of the year the agency was prepared to order the Organization for Economic Cooperation and Development (OECD) governments which it represents to tap their strategic reserves.

In its monthly Oil Market Report on Wednesday, the IEA said commercial inventories among industrialized nations fell 440,000 barrels a day in October after an unusually large 1.56 million bpd draw in September.

"This is a thirsty oil market waiting for more oil which will have to come from OPEC," said the IEA.

OPEC has maintained unusually tight compliance with the export limits it put in place in March and according to latest IEA data reduced supply further in November.

Cartel output fell 700,000 bpd to 25.8 million bpd during the month, partly because of Iraq's absence, and compliance with supply curbs rose to 89 percent of targeted levels.

OPEC officials in public insist they have no plans to change output policy before next April, when their year-long agreement expires.

However, OPEC insiders say big producers like Saudi Arabia are worried about stoking inflationary pressures in the West and don't want to see the market get out of hand. The IEA said this year's recovery in oil prices has yet to make any major impact on commercial upstream activity, leaving OPEC as the only source of extra supply to meet rising demand.

"Oil supply from outside OPEC is increasing much less rapidly than demand," it said. "Little of the production that was shut in or lost due to lack of workovers and other upstream investment during last year's price collapse has reappeared." The IEA said OECD industry stocks by the end of October stood 15 million barrels below the end of October 1997 and within 100 million barrels of their lows in October 1996.

"Continued rapid declines in November may indeed have brought OECD industry stocks almost to the 1996 level," it added.

Oil prices, at 25 dollars a barrel for benchmark Brent blend on Wednesday, were last as high in 1996 when oil companies chose to save money by slicing inventories.

Analysts have warned that 30 dollars a barrel for Brent, a threefold rise from February's lows, could be on the cards.

The IEA said North America, the world's largest oil consuming region, bore the brunt of the October stockdraw.

Inventories in the United States dipped 755,000 bpd in October and 1.25 million bpd through most of November.

"The U.S. stockdraw in December could approach two million bpd," it added.

-- Bill P (porterwn@one.net), December 09, 1999

Answers

It'll be Saddam's fault I can't get gas to go to work next year. Not y2k. What a relief!

-- Scaredy Cat (Afraidtosay@myhouse.com), December 09, 1999.

Good grab! This now points to shortages down stream for the chem industries. Shortages! is the anwere I've been giving to people who ask if y2k will have any effect on their lives. And its interesting that they agree readly on this. But repeat what the news media has said over and over again that y2k will not bring down civilization, but they agree we are going to have shortages. Has any one followed the commodities market? justthinkin

-- justthinkin com (y2k@maybeok.com), December 09, 1999.

We wouldn't have "spot shortages" if the price of gas were not so cheap people purchased and used SUVs. If the price is raised the SUVs will be forced to the side of the road where they belong and there will be plenty of gas for everyone.

-- Paula (chowbabe@pacbell.net), December 09, 1999.

Paula..what is wrong with SUV's?? Depending on the SUV, they can get the same gas milage as medium sized cars. Most SUV's use highly efficient V6 engines (many use 4 cyls in their base models), with a few gas guzzling V8's out there. Even the V8's if driven well aren't as bad on gas like they used to be.

I'll be getting a Land Rover Defender this next year if the market doesn't nose dive.....if it does I'll get a Nissan X-terra :)

LONG LIVE THE SUV!!!! The real gas eaters are the piece of crap are the oversized trucks like Suburbans, Excursions, and crap like that.

-- C. Hill (pinionsmachine@hotmail.com), December 09, 1999.

Also, I'm sure we will bend over (forward) for Iraq so we can get gas, because I don't believe the US goverment wants to add to the Y2K situation at this point. It would be funny to see Iraq tell Clinton to go xxxx himself when they try to re-negotiate though...hehe

-- C. Hill (pinionsmachine@hotmail.com), December 09, 1999.

I might not be so biased against SUVs if they all did not seem to have that "defect" in their turn signal. I hardly ever see an SUV use one. Perhaps there is a defect in the electrical system. And perhaps the SUV drivers don't care to repair them...after all, you'd better get out of the way because HERE COMES the SOCCER MOM who's NOT GOING TO TAKE ANY MORE GARBAGE from ANYONE!!

-- coprolith (coprolith@fakemail.com), December 09, 1999.

Jesus..for one thing...the "soccer mom" is more likely to drive a mini-van than an SUV. Secondly, I think the superiority complex in the forum must be at an all time high.

Just because someone drives an SUV doesn't mean they are some "yuppie scum". Some people just prefer that type of vehicle. It also doesnt mean that they are a bad driver. This reminds me of when some genius in this forum tried to tell me that Volvo drivers are ALL BAD DRIVERS, and that they buy Volvos because they suck at driving, and expect to cause an accident.

I could say that people who buy little piece of shit econobox cars are just cheap skate, penny pinching, money trolls, who would rather drive a Hyundai just so they can be some kind of social/economic martyr.............but I won't :)

-- C. Hill (pinionsmachine@hotmail.com), December 09, 1999.

It's a free country, drive what ever hell kind of car you want. We truly are turning into a socialistic country and we've got a population of people that thinks everyone should be the same. Heh, let's not stop at SUV's, let burn down all those big ass houses that consume an enormous amount of electricity and natural gas everyday. No one needs to live in big houses. We'll build ticky-tacky apartment buildings for everyone to live in, then everyone will be the same. Let's shut down all those polluting factories, whose needs TP anyway, it's just a luxury item. Get rid of all those wine vineyards and plant real food for the masses. No more cattle and chicken slaughter houses, they consume what we should be eating. And Paula, you won't be able to go shopping anymore and pick out your favorite luxury items to munch on, I think you waste too much gas and time shopping. It's time we all quit being so selfish.

-- Bardou (Bardou@baloney.com), December 09, 1999.

Living on an old logging road in the backwoods, I appreciate the necessity of a working 4 wheel drive vehicle (truck.) Without one in snowy winter or muddy spring, I would not be able to reach the main road or clear the mountain pass into town. For many who work on ranches or back in the forest, four wheeled drive or a heavy duty truck and winch can mean the difference between life or death in flood or fire conditions.

I am often madder n' hell at the majority (read urban/suburban) population who make laws suited to their lifestyles that result in impractical or life-endangering conditions in mine. We are not and cannot be homogenous. Some of us actually need those heavy duty, high traction vehicles way up off the ground. They are no luxury to us.

-- marsh (armstrng@sisqtel.net), December 09, 1999.

Good call marsh...and its not just the suburban people either, a good all wheel or 4 wheel drive vehicle is good for anyone who lives where there may be lots of rain, snow, or even the need to go offroad now and again....

anyway...it is true, people should not be judged by the vehicle they drive, or anything else they own...not to mention the fact that it is not our jobs to judge each other anyway, since each of us has faults of our own.

yeah yeah, I still do it sometimes, and so does everyone else, but at least be aware that you are doing it, and maybe re-think before making a comment. We are, after all, only human.

-- C. Hill (pinionsmachine@hotmail.com), December 09, 1999.

>> Living on an old logging road in the backwoods, I appreciate the necessity of a working 4 wheel drive vehicle (truck.) <<

In case anyone is interested...

The SUV has progressively become far less of a Jeep and far more of a luxury vehicle. It is grabbing market share that once belonged to station wagons and family sedans. The basic reason for this turn of events is that station wagons and family sedans had to meet fleet emission standards mandated by law during the (late 70s? early 80s?). The same law that created those standards for cars created a loophole for light trucks.

The automakers didn't really suss onto this loophole until Chrysler minivans became popular. They were classed as light trucks. After that, more and more vehicles began to be built on a light truck chassis, but aimed at the car market not the truck market. The SUV is merely the logical extension of this trend.

REAL pickup trucks, such as Marsha drives, are the reason why the loophole was created. SUVs were created for the loophole, not the other way around. They are gussied-up station wagons built on a truck chassis. Everything above the chassis is pure passenger car.

As for the motives and values of the people who buy SUVs...no doubt they are pure. They just aren't *my* motives or values, and I have a hard time connecting to them.

-- Brian McLaughlin (brianm@ims.com), December 09, 1999.

This SUV thing reminds me a lot of the programming that got us into the Y2k crisis. The gas shortage in the 1970's inspired the production of small cars and the ethic of conservation of a non- renewable resource, gas. During the last 10 years when gas has been rediculously cheap, people have forgotten and have been racing to have the biggest and "best" irregardless of gas consumption. This was also when computer memory was also becoming cheap and plentiful. Where programs were once elegant, giving the most powerful program for the least code, they became wasteful. One little thing, four digit years, was forgotten. Unfortunately, the human mind is still geared to maximizing the present situation and has not evolved enough to keep in mind long term goals. This may be a fatal flaw. Y2k will probably remind us of long term consequences in a very unforgettable way!!

My family farms 20 acres as our moonlighting jobs. We have a 20 year old pick-up which gets horrendous gas mileage. We use it only for things where nothing else will do. For our commute cars we use 13 and 16 year old Toyota Corollas. We keep vehicles going for as long as possible because of resources consumed in production of new ones. Besides, it's very nice to not have to make car payments!

We vote on what we want by what we buy and carmakers are oh so happy to oblige by building them bigger and bigger. We should put responsibility for long term consequences into our car buying decisions.

-- Evelyn (equus@barn.now), December 09, 1999.

I don't think I'm superior to anyone, nor do I think there should be anyone in authority telling people what they should and shouldn't drive. On the other hand, it still remains a mystery in my mind why SUV drivers tend to be far more agressive and totally inconsiderate of the smaller peons around them. Where I live, it would also seem that they have largely forgotten how to use turn signals and how to yield the right of way to pedestrians and cars alike...

So flame away...go ahead, pretend to know what I think. I really don't care because we'll never meet anyway.

-- coprolith (coprolith@fakemail.com), December 09, 1999.

Y2K........Y2K..........Y2K.........Y2K

-- richard shockwave (vission@aol.com), December 09, 1999.

I saw CHEMTRAILS comin from an SUV--Ripley.

-- Feelthy Steenkan (amicured@last.not), December 09, 1999.

sorry people, I was feeling REALLY cranky today. no i do not think all SUVs or their drivers are evil. my bad. nevertheless the point that vehicles of higher fuel efficiency might become more popular is well taken...

-- coprolith (coprolith@fakemail.com), December 09, 1999.