BELARUS NEWS AND ANALYSIS

DATE:

09/01/2007

Russia may reduce oil output as it seeks surrender from Belarus; Oil price plunges to 18-month low in New York

By Finfacts Team

Russian President Vladimir Putin said on Tuesday that his country, which is the world's second biggest oil exporter may cut output, signalling his determination to to force Belarus to submit to its terms in a trade dispute that has halted pipeline exports to Europe.

As cutoff of Russian oil supplies to the European Union continued for a second day, Putin asked his government to discuss possible production cuts by Russian oil firms.

The European Union criticised the second flare-up in recent weeks between Russia and Belarus, across whose territory Druzhba pipeline carries over a million barrels of oil per day.

Russian officials are reported to have left a Belarussian delegation to Moscow in limbo.

Putin is reported to have told top government officials "to discuss with Russian companies the possibility of reducing oil output in connection with the problems arising from transit through Belarus".

"It is not acceptable for suppliers or transit countries to take measures without consultation. Of course this is a matter for concern," EU Commission President Jose Manuel Barroso said on a visit to Berlin. (Monday's report on standoff)

Meanwhile, the price of crude oil plunged to the lowest price since 2005, trading near $54 a barrel as mild weather in the U.S. reduced heating fuel demand and caused inventories to risel.

The temperature high in New York City today is expected to be 45 degrees Fahrenheit (7 Celsius) today, compared with a normal high of 38 degrees, according to Meteorlogix LLC. The city had its third- warmest December temperatures on record. A US Energy Department report tomorrow will probably show US inventories of distillates, including heating oil and diesel, rose for a fourth week.

The price of crude oil for February delivery plunged as much as $2.21, or 3.9 percent, to $53.88 a barrel on the New York Mercantile Exchange, the lowest intraday price since June 13th, 2005. The contract traded at $54.25 at 2:15 p.m. in Dublin. Brent crude fell as much as $1.38, or 2.5 percent, to $53.36 on the ICE Futures exchange, its lowest since the same date.

Source:

http://www.finfacts.com/irelandbusinessnews/publish/article_10008616.shtml

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