Monday, September 19, 2005

The Emperor's Clothes Will Be Here In a Few Hours.

WSJ: OPEC Ministers Consider Ways To Calm Jittery Energy Market.


Oil prices surged as a new storm, Rita, headed toward Texas and OPEC ministers meeting here all but admitted that they have no additional means to cool red-hot petroleum markets.

The looming new threat to oil facilities in the Gulf of Mexico eclipsed efforts by ministers of the Organization of Petroleum Exporting Countries to craft a reassuring message reiterating that they would produce more oil if needed. The market moves underscore how much the U.S., by far the world's largest oil consumer, depends on the gulf region, which is home to significant offshore oil and natural-gas pumping assets as well as key refineries along the coast.

The price of U.S. benchmark crude-oil futures for October delivery shot up $4.39 a barrel, or 7%, on the New York Mercantile Exchange, settling at $67.39. In London, benchmark Brent futures for November rose $3.80 to $65.61 a barrel.

Also on the Nymex, October heating oil climbed 19.80 cents, or 11%, to $2.0425 a gallon, while October gasoline surged 24.95 cents, or 14%, to close at $2.0490. October natural gas jumped $1.52, or 14%, to a record $12.66 per million British thermal units.

Saudi Arabia's oil minister, Ali Naimi, repeated once again his pledge to produce as much as 1.5 million barrels a day of extra oil if it is needed. Along with other OPEC ministers, Mr. Naimi also sought to find new ways to dress up this year-old message, which is intended to reassure consuming nations that OPEC was willing to produce more oil if buyers could be found.

One of the options being discussed was for the cartel to state that it has two million barrels a day of spare petroleum-pumping capacity, citing projects that OPEC officials say will come online later this year in the United Arab Emirates and Libya. The statement would say that this was immediately available on demand, regardless of the cartel's formal output ceiling of 28 million barrels a day. "The crude is available," Mr. Naimi told reporters. "If you want it, there it is."