Kind of slow on Y2K and Leap year stories today. The oil situation will be the next big story of the future. The oil companies practice JIT inventory just like every other business. There is no stored fuel out there anymore.

Crude oil rises as Venezuela says OPEC may not boost output Filed: 03/01/2000

By Stephen Voss c.2000 Bloomberg News

New York, Feb. 29 (Bloomberg)  Crude oil rose close to a nine-year high after Venezuelan energy minister Ali Rodriguez said OPEC may not boost output in the second quarter because demand is expected to decline.

While Rodriguez, representing OPEC's third-biggest producer, talked of delaying output increases, he also said that production would rise if New York prices stayed above $30 a barrel. Prices have almost tripled over the past 14 months after the producer group led oil exporters to an output-cutting agreement that's scheduled to expire at the end of March.

"It doesn't appear there will be any increase in production for the short term," said John Kilduff, senior vice president of energy risk management at Fimat USA Inc. in New York. "Without a concrete announcement of an increase in production," you have to protect yourself by buying oil, he said.

Crude oil for April delivery rose as much as 50 cents, or 1.7 percent, to $30.63 a barrel on the New York Mercantile Exchange. Oil reached a nine-year high of $30.83 during trading on Friday.

In London, Brent crude oil for April delivery rose as much as 43 cents, or 1.6 percent, to $27.84 a barrel on the International Petroleum Exchange.

The Venezuelan oil minister was speaking to reporters today in London, where he will meet with his counterparts from Saudi Arabia and non-OPEC Mexico later this week. Those three ministers were the architects of the production cuts last year that trimmed world supply by about 5 million barrels a day, or 7 percent.

"I can't get a handle on what Venezuela is up to, people are certainly confused by Venezuelan comments over the past few days," said Tom Bentz, an analyst and broker at Paribas Futures Inc. in New York. "I think it's by design. They seem to still be holding prices up here."

Saudi Arabia, the world's largest producer, indicated on Saturday that it may support increasing output when the Organization of Petroleum Exporting Countries meets on March 27.

Producers have been urged repeatedly by officials from consuming countries, particularly U.S. Energy Secretary Bill Richardson, to boost supply and avoid the risk that high energy prices might curb global economic growth. U.S. retail gasoline rose to a record $1.421 a gallon this week, the Department of Energy said yesterday.

While Bentz and other analysts still expect an eventual increase in OPEC oil supply, no one is certain of the timing or amount.

Traders were also awaiting a weekly report on U.S. oil inventories from the American Petroleum Institute, due after floor trading ends today. Seven analysts surveyed by Bloomberg News expected the report to show that distillate fuel inventories, which include heating oil, fell by between 100,000 barrels and 900,000 barrels from 103.74 million last week.

Crude oil inventories were expected to be 400,000 barrels lower to 500,000 barrels higher, while gasoline inventories were forecast to be 600,000 barrels lower to 300,000 barrels higher.

http://www.bakersfield.com/oil/i--1260223087.asp

-- Martin Thompson (mthom1927@aol.com), March 01, 2000