Crude prices slip after earlier rally on supply

Crude prices slip after earlier rally on supply

New York (Platts)--30Nov2004


January crude futures on NYMEX and the IPE eased Tuesday afternoon after
rallying on word that Norway's Statoil expected a 200,000 b/d North Sea supply
outage to last several days. Prices slipped after Marathon said it planned to
restart later Tuesday about 37,000 b/d of 80,000 b/d shut-in, third-party
crude output through its UK North Sea Brae platform, shuttered Saturday
following a gas leak on the Brae Alpha platform. At 2:24 p.m. EST (1924 GMT),
NYMEX January crude futures were trading at $48.95/bbl, down 81 cts on the
day, after having reached an intra-day high of $50.40/bbl. IPE January Brent
was trading at $45.25/bbl, down 50 cts, while NYMEX January Brent was trading
at $45.20/bbl, down 50 cts, in Dublin. Crude prices slipped despite remarks by
OPEC officials about plans for 2005 production. OPEC acting Secretary General
Maizar Rahman said he believed there was currently around 1-mil b/d of excess
supply in the market.

OPEC President Purnomo Yusgiantoro said the cartel's 10 members bound by
quotas were pumping 28.5-mil b/d, about 1.5-mil b/d above their combined
ceiling of 27-mil b/d. OPEC fears a demand slump in Q2 2005, a factor
ministers plan to keep in mind Dec 10 in Cairo when meeting to decide on
output policy, Purnomo said. And Edmund Daukoru, Nigeria's presidential
adviser on petroleum and energy, said OPEC will review all issues "carefully"
when it meets in Cairo. In other Nigeria upstream news, ChevronTexaco said it
would not be able to resume 140,000 b/d of shut-in production in the western
Delta Region until 2005, citing security concerns and ongoing violence there.

In Iraq, loadings from the Basra Oil Terminal rebounded to 1.848-mil b/d,
following a slump to 750,000 b/d in the week to Nov 28. Tuesday's earlier
crude rally followed higher crude prices Monday on news of a weekend crude
spill on the Delaware River near Philadelphia. That prompted concerns several
area refineries faced production cutbacks, but that has not yet materialized.

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