11/12 21:19 Oil Rises to 1-Month High as OPEC Plans No Change in Output By Rajat Bhattacharya

Singapore, Nov. 13 (Bloomberg) -- Crude oil rose to a one- month high after OPEC said it won't raise production targets again this year, arguing it's pumping enough oil to meet winter demand and may need to cut output in January.

Production by members of the Organization of Petroleum Exporting Countries, which pump 40 percent of the world's oil, is now at a 21-year high. OPEC said oil prices have remained above $30 a barrel since August because of high fuel taxes in consuming countries and a lack of refinery capacity in the U.S., not a shortage of oil.

Crude oil rose as much as 1.4 percent, or 48 cents, to $34.50 a barrel in after-hours electronic trading on New York Mercantile Exchange, up about one-third this year.

OPEC is ``guarding its own interest by deciding not to boost output further this year,'' said Cheng Khoo, an energy analyst at UBS Warburg LLC in Hong Kong. ``OPEC has been producing more oil than is needed by the market and they are concerned prices will fall early next year'' when winter ends.

OPEC members have increased output by a total 3.7 million barrels a day this year, which has put world production in excess of demand by 1.8 million barrels a day in the third quarter, according to the International Energy Agency. The IEA monitors oil markets for 25 industrialized nations.

Asian nations assert rising energy prices will dampen economic recovery.

Australian Foreign Minister Alexander Downer said the Asia- Pacific Economic Cooperation group meeting in Brunei had called on OPEC to make another output boost to lower prices, Agence France- Presse reported.

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-- Martin Thompson (mthom1927@aol.com), November 12, 2000

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Nando Times

Boost in oil output won't come before next year, OPEC says

By CLAR NI CHONGHAILE, Associated Press

VIENNA, Austria (November 13, 2000 7:34 a.m. EST http://www.nandotimes.com) - OPEC leaders said Monday the oil cartel would not raise output again this year, a decision likely to upset consumer nations where high prices are pushing up winter heating bills.

Ministers from the Organization of Petroleum Exporting Countries, which produces 40 percent of the world's crude oil, said Sunday they would not increase output now. Some hinted the next output change could come at their next meeting Jan. 17.

Prices and output were both discussed during an informal meeting of the group in Vienna on Sunday. Delegates met formally Monday to rubber-stamp Sunday's decisions.

Crude prices, already hovering near their Persian Gulf War highs, jumped in early trading Monday on the news. December light, sweet crude futures were up about 45 cents to $34.47 in Singapore trading Monday.

In his opening remarks Monday, OPEC President Ali Rodriguez said that high prices were being fueled by speculation, high taxes in consumer nations and refining bottlenecks.

Consumers may be concerned about ever-higher heating oil bills this winter, but OPEC members are more worried about shriveling oil prices in the spring when demand for heating oil shrinks.

Delegates also decided Sunday to name Rodriguez as the cartel's new secretary-general, replacing Rilwanu Lukman of Nigeria. Some analysts saw the selection as bullish for prices, describing Rodriguez as a price hawk.

"It may mean a redirection of OPEC toward old-style OPEC," said Leonidas P. Drollas of the London-based Centre for Global Energy Studies. He defined that direction as, "Prices need to be high, consumers must pay, oil is a precious commodity."

After Sunday's talks, Kuwaiti Oil Minister Sheik Saud Nasser al-Sabah said the cartel would not increase output before January.

Such an outcome could run afoul of an informal OPEC agreement aimed at keeping prices between $22 a barrel and $28.

Under the deal, agreed to earlier this year, OPEC members pledged that if average prices for crude remain above $28 for 20 consecutive days, they would hike daily production by 500,000 barrels.

They last did that just 13 days ago, but prices are still above the upper limit - and likely to stay there long enough to require another production increase under the agreement.

Some ministers supported the price agreement, but others said it was more a guideline than a hard and fast rule.

They argue the market needs more time to digest the 3.7 million barrels a day in hikes already agreed to this year.

"We have said that we want to assess the impact of these increments on the market - it takes time to determine the effects," Saudi Oil Minister Ali Naimi said.

Some analysts say OPEC simply cannot pump any more.

"I think they are stuck. They don't have options," said Jareer Elass, managing director of Oil Navigator. "They are using pressure of falling demand and refining restrictions as the reason why they cannot act aggressively now."

-- Rachel Gibson (rgibson@hotmail.com), November 13, 2000.