- Title: RUSSIA/USA: OIL PRICES FALL AS YUKOS THREAT RECEDES
- Date: 28th July 2004
- Summary: (U4) MOSCOW, RUSSIA (JULY 29, 2004) (REUTERS) 1. SLV OF ALPHA BANK TRADING FLOOR 0.04 2. SV/CU BROKERS SITTING IN FRONT OF TRADING SCREENS/ COMPUTERS (3 SHOTS) 0.16 3. MCU/SV BROKERS AT THEIR DESKS (2 SHOTS) 0.29 4. CLOSE UP OF A TRADING SCREEN 0.33 (U4) GRAPHICS (JULY 29, 2004) (REUTERS) 5. YUKOS SHARE PRICE RISING 0.39 (U4) MOSCOW, RUSSIA (JULY 29 2004) (REUTERS) 6. MCU (English) OLEG MARTYNENKO, HEAD OF ALPHA BANK SHARE SALES TO RUSSIAN PORTFOLIO CLIENTS SAYING: "Oh, YUKOS is not a stock anymore, it is just an index of Russian politics, it is moved by rumours, assumptions, not by facts and fundamentals. It weighs heavily on other shares as well, so we have very wild fluctuations of 10, 15, 20 per cent a day and we have a couple of very important news coming every day which is moving the price either down or up. It is very difficult for investors to make serious investments in days like this, this is why we mostly see speculators in the market." 1.19 (U4) NEW YORK CITY, NEW YORK, UNITED STATES (JULY 28, 2004) (REUTERS) 7. VARIOUS OF NEW YORK MERCANTILE EXCHANGE (3 SHOTS) 1.30 (U4) CHICAGO, ILLINOIS, UNITED STATES (JULY 28, 2004) (REUTERS) 8. MCU (English) PHIL FLYNN, ALARON TRADING SAYING: "I think if this YUKOS situation continues to deteriorate or continues to stay uncertain I think the prices will continue to stay above forty dollars a barrel for the foreseeable future. Whether or not we get to fifty dollars will depend on whether or not anything else goes wrong. We can't afford for anything else to go wrong." 1.53 (U4) GRAPHICS (JULY 29, 2004) (REUTERS) 9. LIGHT CRUDE FUTURES PRICE GOING DOWN 2.00 (U4) NEFTEYUGANSK, WESTERN SIBERIA, RUSSIA (RECENT - JULY 26, 2004) (REUTERS) 10. VARIOUS OF OIL DRILLS AT YUKOS MAIN OPERATING UNIT, YUGANSK (4 SHOTS) 2.28 11. FLAME FROM BURNING OF EXCESS OIL FIELD GAS (2 SHOTS) 2.40 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 12th August 2004 13:00
- Keywords:
- Location: MOSCOW, AND NEFTEYUGANSK, RUSSIA; CHICAGO, ILLINOIS, NEW YORK CITY, NEW YORK, UNITED STATES
- City:
- Country: USA
- Reuters ID: LVACEQEEBP6VT85MQP4QMP7P6X0L
- Story Text: Oil prices fall as YUKOS threat recedes.
Russia's justice ministry recalled a ban on the sale
of assets by oil firm YUKOS's main production subsidiaries,
YUKOS said on Thursday (July 29, 2004), prompting its shares to
surge.
"The Ministry of Justice has officially recalled the
ban on property alienation it had previously imposed on
Yuganskneftegas, Samaraneftegas and Tomskneft," YUKOS
spokesman Yevgeny Fokin said in an e-mail to reporters.
The news came after a justice ministry spokesman said
bailiffs who served writs barring property sales by the
embattled company's operating units were not seeking to
halt their oil production.
Shares in YUKOS surged more than 20 percent on the
news, and oil prices fell back from record peaks reached on
concern over further pressure on oil supply.
The shares erased Wednesday's losses suffered after
YUKOS, which pumps 1.7 million barrels per day, or a fifth
of Russia's oil, said it believed the writs may apply under
Russian law to oil sales from its three main units.
At 1100 GMT, YUKOS's rouble-denominated shares were up
25 percent at 104.00 roubles. Trading was reinstated at the
opening after the shares were suspended late on Wednesday,
when they fell by over 20 percent to their lowest since May
2001.
At Moscow's Alpha Bank share trading unit, brokers
said the YUKOS stock faced constant fluctuations due to
daily developments in the company's tussle with the Russian
authorities.
Alpha Bank's Oleg Martynenko said in the current
circumstances, the YUKOS stock was of interest only to
market speculators and shunned by serious investors.
"Oh, YUKOS is not a stock anymore, it is just an index
of Russian politics, it is moved by rumours, assumptions,
not by facts and fundamentals. It weighs heavily on other
shares as well, so we have very wild fluctuations of 10,
15, 20 per cent a day and we have a couple of very
important news coming every day which is moving the price
either down or up. It is very difficult for investors to
make serious investments in days like this, this is why we
mostly see speculators in the market," said Martynenko, who
heads Alpha Bank's share sales to Russian portfolio
clients.
High oil prices kept investors on edge for most of
the Wednesday session in New York, after U.S. light crude
for September delivery rose to a 21-year high of $43.05 a
barrel, topping peaks hit in early June. September crude
oil settled at $42.90 a barrel, up $1.06, on the New York
Mercantile Exchange.
The price jump followed news that bailiffs ordered
YUKOS to stop sales, threatening further strain on tight
international supplies.
"I think if this YUKOS situation continues to
deteriorate or continues to stay uncertain I think the
prices will continue to stay above 40 dollars a barrel for
the foreseeable future," predicts Phil Flynn of Alaron
Trading. "Whether or not we get to 50 dollars will depend
on whether or not anything else goes wrong. We can't
afford for anything else to go wrong."
However, world oil prices fell on Thursday from record
peaks after Russia's justice ministry said it was not
seeking to halt production from the oil giant.
U.S. light crude lost 40 cents to $42.50 a barrel in
early trading after climbing to a peak of $43.05 on
Wednesday, the highest in the contract's 21-year history.
In London, Brent crude oil fell 33 cents to $39.20
after scaling a 14-year high of $39.68 the day before.
But YUKOS troubles are still far from over.
YUKOS CEO Steven Theede has said a freeze on bank
accounts could soon affect rail shipments of oil, which
account for up to a quarter of the company's total sales.
Analysts generally predict any disruption will be
minimal.
Traders argued, however, that the market would stay well
supported by concerns that world supplies are already
dangerously stretched by strong global demand growth.
Producers' cartel the Organisation of the Petroleum
Exporting Countries is pumping at more than 95 percent of
capacity, the highest for a quarter of a century.
U.S. government data on Wednesday showed record demand
for crude oil as refineries pumped at 97 percent of
capacity, absorbing almost all of a record influx of
imported crude.
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