Saudis Signal No Change In Oil Production

OPEC Expected To Keep Output Steady; Oil Prices Drop Below $104 A Barrel

(AP)  Oil prices slipped below $104 a barrel Tuesday for the first time since early April as traders bet that Hurricane Ike would miss critical Gulf Coast oil installations and in Vienna, Saudi Arabia's oil minister signaled OPEC won't cut production.

Light, sweet crude for October delivery fell $2.44 to $103.90 in midday trading on the New York Mercantile Exchange, the lowest level since April 3. Prices rose 11 cents to settle at $106.34 in volatile trading Monday.

Crude's decline puts the contract within striking distance of the psychologically important $100 threshold, a level first reached on Feb. 19.

Ike roared ashore south of the Cuban capital of Havana early Tuesday after shifting course overnight on a track that could hit anywhere from northern Mexico to Corpus Christi, Texas - well south of major oil and natural gas installations in the Gulf of Mexico. The storm also weakened Monday from a Category 3 storm to a Category 1.

"All of the signals are that this hurricane will be a miss as far as infrastructure goes, so that should keep us moving toward $100 a barrel," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.

Still, forecasters warned that a low-pressure system could nudge the storm to the north, limiting the downward pressure on oil prices.

"There's still the possibility that Ike could be a real devil and if nothing else cause additional precautionary evacuations and shutdowns" of Gulf platforms and rigs, said Peter Beutel, energy analyst at Cameron Hanover, New Canaan, Conn.

Oil market traders were also keeping a close watch on an OPEC meeting in Vienna, Austria.

Oil ministers from the Organization of Petroleum Exporting Countries meet Tuesday to decide whether to hold production levels steady despite crude's steep decline in recent months. Prices have plunged about 30 percent since surging to a record $147.27 a barrel on July 11.

Iran and other hawkish members have been pushing the 13-member body to trim output in an effort to lift prices - or at least halt the decline. But Saudi Arabia, the cartel's largest member, and a number of other countries have been less vocal about possible cutbacks.

Early morning comments by Saudi Oil Minister Ali Naimi suggested the kingdom, which accounts for about a third of all OPEC output, prefers not to tighten the spigots for now.

"The market is fairly well balanced," Naimi told reporters after arriving in Vienna in the dawn hours of Tuesday. "I think things are in balance, in a healthy position."

Kuwait's oil minister, Mohammed Abdullah Al-Aleem, also said there is no need for OPEC to cut production.

Oil analyst and trader Stephen Schork, speaking by phone from Vienna, said he expects ministers will keep production constant for now.

Part of the reason, he said, would be to avoid sparking a politically motivated firestorm in the U.S., by far the world's largest oil consumer. U.S. gasoline prices have come down from their summer highs above $4 a gallon, but still remain nearly a dollar higher than they were a year ago.

"I don't think the Saudis or OPEC in general want to project themselves into the U.S. presidential election, which is what would happen if you saw a production cutback," he said.

In other Nymex trading, heating oil futures fell 7.86 cents to $2.935 a gallon, while gasoline prices dropped 9.10 cents to $2.6593 a gallon. Natural gas for October delivery tumbled 25.5 cents to $7.27 per 1,000 cubic feet.

In London, October Brent crude fell $2.11 to $101.33 a barrel on the ICE Futures exchange.

[closethippy1]

You gotta be f''n kidding me. Only 7 commentaries on this?
No wonder the powers that be like to take their time when it comes to doing their part for society.
If no one holds them accountable why stop the party?

[atheismwins]

Yay!!!!!

Now we don''t have to send tanks into Saudi Arabia! :)

[dausderau]

In Macon, GA, at 8:45am on September 09, 2008 gas at my local BP was $3.60 per gallon of regular but at 5:45pm the same day the price was up 0.15 cents per gallon to $3.75 per gallon of regular...where is the benefit to falling crude oil prices??? The gas companies and distibutors don''t hesitate to raise prices at the slighest hint of market ''blips''...

[closethippy1]

MY THOUGHTS EXACTLY:

I would like to know why is gas not falling when oil is 103.00 a barrel? Gas should be no more the 2.00 at that rate. When are our so called d... gov.going to stop all this price gouging? it just seems funny to me how it never goes down as fast bas it went up. WHEN IS ENOUGH GOING TO BE ENOUGH
Posted by buttermilk12 at 04:40 PM : Sep 09, 2008

I suppose Jr and his friends in the oil business will make the most of it while Monkey Boy is still president.
These b.astards have absolutely no sense of solidarity with their fellow citizens when it comes to making money.
They all behave like the animals they are and to hell with everyone else.
Isn''t this what triggers revolutions? We need to let these people know who the boss is in the US once and for all.

[buttermilk12]

I would like to know why is gas not falling when oil is 103.00 a barrel? Gas should be no more the 2.00 at that rate. When are our so called d... gov.going to stop all this price gouging? it just seems funny to me how it never goes down as fast bas it went up. WHEN IS ENOUGH GOING TO BE ENOUGH

[beehive21-2009]

Sure ,they hope to sell as much as possible,once,Bush,Cheney and Big Oil are gone the prices will plummet, its what happens when you let oil men run the White House.We are witnessing the selling of America via Bush and Cheney,no wonder he has heart attacks,he''s a crooked,greedy,person of ill repute.You that voted for them,shame on you.

[lewiston14]

OBTW go ahead and laugh it is coming, just a question of when

[lewiston14]

Well for the moment this is good news. The oil nations know the nations that buy their products are sinking fast something they can not ignore. If the US goes under money wise it will take most of the other nations with it. Something they can not afford. They know the world markets are sick of $150 oil and would rather just forget it. The price of oil oil only gets so high before its not even worth importing as the return becomes to small in value. Painfull for us or the world yes but also painfull for them. There is nothing stopping anyone from taking over those oil states as they have little or no protection. The next and last wars will be over oil until it dries up. I think they know that.