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Archive for November 27th, 2006

Oil nears $60 on Saudi cut talk


Saudi oil minister discusses further production cuts at Dec. 14 OPEC meeting.

LONDON (Reuters) — Oil rose one percent towards $60 a barrel on Monday after Saudi Arabia’s oil minister said OPEC may cut output further when it meets on Dec. 14.

Surging gold also lifted oil as investment funds sought an alternative to the dollar, at a 20-month low against the euro.

U.S. crude rose to $59.86 by 4:21 a.m. ET, up 62 cents from the settlement Wednesday, the last day of trade in New York before the two-day Thanksgiving holiday.

London Brent crude gained seven cents to $60.10, adding to 68-cent gains on Friday.

Saudi Oil Minister Ali al-Naimi, OPEC’s most influential voice, held out the prospect of a further output cut when the group meets next month in Abuja.
At an emergency meeting in Doha in October, OPEC agreed to remove 1.2 million barrels per day from oversupplied markets — the first cut in two years. Since then, OPEC ministers have lined up in favor of a further reduction to underpin prices.

“We must look at the impact of the measures decided in Doha. If they are adequate, we will be satisfied, if they are not we will act again and the aim is to bring stability back to the market,” Naimi told reporters.

Production cuts during peak winter demand would achieve OPEC’s aim of drawing down high oil stocks, affecting not just the cost of oil but the price of the shares of major oil companies like BP (Charts), ExxonMobil (Charts), ConocoPhillips (down $0.20 to $64.29, Charts) and Royal Dutch Shell (Charts).
“The longer oil stays below $60 the more chance OPEC will cut,” said Tony Nunan, a risk manager at Mitsubishi Corp.

The dollar hit a 20-month low against the euro and a three-month low against the yen on Monday, amid worries over a slowdown in U.S. economic growth.
Oil has been stuck in a two-month trading rut of $58-$62 a barrel, showing few signs of resuming a climb back toward a record high of $78.40 a barrel hit in mid-July.

But increased tension in the Middle East could turn sentiment more bullish.

“So far Iraqi exports haven’t been affected, but if the unity government there falls apart it could be a mess,” said Nunan.

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“Three Democratic congressmen who are about to take important leadership posts said on Sunday they plan to pass popular legislation blocked by Republicans but would refrain from pushing some of the most controversial elements on the liberal agenda,” a Sunday Reuters story claims.

“The three, appearing on Fox News Sunday, are among the most liberal Democrats who will take over key committee chairmanships when Democrats regain control of the House of Representatives in January,” Reuters adds.

Rep. Barney Frank (D-MA), who will take over the House committee that oversees financial institutions, mentioned upping the minimum wage, providing cheaper drug coverage for seniors and providing affordable housing and college tuition aid as the focus of Democratic legislation. He did not, however, float more controversial plans pushed by party liberals including overturning the ban on gays from serving in the US military.

“Our first efforts are going to be to do those things that I think the mainstream of America wants,” Frank said. “Some things have become liberal because the right wingers who control the Republican party have abandoned them to us.”
FULL REUTERS STORY HERE.

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Excerpted from a transcript of CNN’s “Reliable Sources”:

KURTZ: If you’re sitting at home watching it on TV, you see mass kidnappings, suicide bombings, mosque bombings, death squads. When you’re there as a journalist, does the situation seem as chaotic to you as it does to a viewer?

ROBERTS: You know, Howie, I had a perception of Iraq going in, and it was the first time I’d been there in three-and-a-half years. I got out a couple of days after the Saddam statue fell, after the initial invasion. So it was quite a shock to go back and see the chaotic state that the country was in. And as — I guess you could say as realistic as my perceptions were about going in there, the reality on the ground far exceeded that.

The place is a mess. It’s an absolute mess. There is nowhere you can go in the Baghdad area as a Western journalist without an escort, where you could feel safe from being kidnapped, shot at, whatever. The amount of death that’s on the streets of Baghdad for U.S. forces and for the Iraqi people is at an astronomical level…

ROBERTS: Because television can’t — and even print — can’t fully capture the scope of what’s going on in Iraq. And to some degree, too, over the last three-and-a-half years, Howie, it’s become the daily traffic report, the daily drumbeat.
Read the full transcript here.

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