London: Tight Refinery Capacity Props Up Crude Despite OPEC Intervention Energy24

October 31, 2000

IPE Brent rallied on Tuesday despite Monday's OPEC announcement to boost production by 500,000 bpd.

Brent for December delivery opened on $31.09 five cents up on Monday night's close and analysts said the markets were concerned by remarks made by US Energy Secretary Bill Richardson who claimed he was still unsure if all American homes could be heated this winter.

But according to Lawrence Eagles, a senior energy analyst with GNI Research, product prices will still be tight in the short term but should ease with a number of US refineries coming back on stream after maintenance

But tomorrow, the US Congress is due to pass a vote effectively blaming Yasser Arafat for the recent upsurge in violence in the Middle East. The vote has already angered Saudi Arabia and it is believed a number of US companies could lose energy contracts with the kingdom. Analysts say prices could climb as a result of the friction and bad feeling caused.

Further down the line however, the beleagured consumer could be relieved from higher prices after Mexico, a prominent non-OPEC supplier promised a further 100,000 bpd

But it was the product market that saw most activity with increasing signs of more refinery activity pushing product prices. A number of US refineries, including Co Operative, Sunoco and a 179,000 bpd refinery at Marcus Hook in the US came back on stream after a month's maintenance.

GNI Research says increased refinery should help product availability, but could also squeeze demand for crude, especially sweet crudes like Brent and WTI.

http://denver.petroleumplace.com/egatecom/scream/2000/10/31/eng-Energy24/eng-Energy24_104427_28_6911921668798.html

-- Martin Thompson (mthom1927@aol.com), October 31, 2000