| Opecs surprise output cut Original Source Link: (May no longer be active) http://www.forbes.com/home_asia/newswire/2003/09/24/rtr1090275.htmlhttp://www.forbes.com/home_asia/newswire/2003/09/24/rtr1090275.html
NYMEX oil up sharply on OPEC cut despite stock build Reuters, 09.24.03, 11:05 AM ET
NEW YORK (Reuters) - NYMEX crude oil futures remained sharply higher midmorning Tuesday as OPEC's surprise output cut overshadowed an expected stock build in U.S. crude inventories last week.
At 10:55 a.m. EDT, NYMEX November crude was up 79 cents at $27.92 a barrel, near an early peak of $28.10 and well above it four-month low of $26.65 set just Friday.
In London, IPE November Brent crude 88 cents higher at $26.40 a barrel, near a session high of $26.57.
Meeting in Vienna, the oil cartel decided to cut output by 900,000 barrels per day (bpd) on Nov 1.
Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah said ministers had agreed to cut supply limits for 10 OPEC members, excluding Iraq, to 24.5 million bpd.
"OPEC will cut by 900,000 bpd from Nov 1," al-Sabah told two news agencies after a closed ministerial session.
The unexpected OPEC move is seen raising energy bills for consuming countries ahead of winter.
"Obviously it was a surprise, though the volume isn't impressive, being about the amount Iraq is producing," said Mike Fitzpatrick, analyst at Fimat USA. "If we get the expected build in inventories, it could blunt the reaction."
In the U.S., the U.S. Energy Information Administration (EIA) said U.S. crude stocks rose by 1.5 million barrels to 280.8 million barrels for the week to Sept 19.
Crude oil imports remained hefty at near record levels, having logged at 10.3 million bpd, down 460,000 bpd. In the week before, imports hit a record 10.8 million bpd.
It also reported that distillate stocks fell by 100,000 to 131.2 million barrels, though the bulk of those stocks, heating oil, rose by 1.3 million barrels to 53.3 million barrels.
Gasoline stocks increased by 1.5 million barrels to 196.8 million barrels.
"They're (the data) certainly being overwhelmed by the OPEC decision, " said Marshall Steeves, analyst at Refco Group in New York.
A Reuters survey of analysts on Monday showed they were expecting crude oil stocks to rise by 1.25 million barrels, distillates inventories to increase by 1.75 million barrels and gasoline supplies to rise by 1.5 million barrels.
Before Wednesday's meeting in Vienna, OPEC ministers had said they did not expect any immediate action to tighten oil supplies.
But there had been concern about recent builds in U.S. inventories and expectations of growing production from non-OPEC producers, especially Russia, as Iraq struggles to bring its production back to prewar levels.
In the refined products market, NYMEX October heating oil futures were up 2.67 cents at 73.50 cents a gallon, trading between 72.80 and 73.50 cents.
NYMEX October gasoline futures were up 2.05 cents at 83.00 cents a gallon, moving from 81.70 to 83.50 cents.
Copyright 2003, Reuters News Service
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