Dubai (Platts)--24Sep2007

A rise in tanker rates for this week's fixtures could be a signal that
additional OPEC crude may hit markets sooner than the November 1 date agreed
by the producers' club for their 500,000 b/d production increase, PFC Energy
said in a weekend report.

     The Washington-based analysts said continued draws at Cushing, Oklahoma,
the NYMEX delivery point, and Gulf of Mexico weather conditions would limit
any downside potential for WTI crude oil futures this week and the US marker
is likely to continue trading at a $2 premium to Brent, PFC said.

     "PFC Energy expects WTI to trade in a $78-83/barrel range next week, with
rhetorical exchanges regarding Iran's continued nuclear program adding to
fundamental support for markets," said PFC in its weekend briefing.

     "While an increase in VLCC rates in this week's fixtures likely signals
that additional OPEC crude may hit markets somewhat sooner than last week's
agreement to raise production from November 1 would imply, short-term issues
coupled with significant inflows of new speculative funds into commodities
markets should provide for substantial price support over the next two weeks."
A tanker chartering report by Beamer Seascope dated September 20 said there
had been 40 VLCC fixtures completed during the week compared to 13 the week
before, bringing the total in October to 47. Ship owners have also been
encouraged by the sharp decline in the 30 day ship availability index from
last week's 106 to a current 73, it said.

     PFC said that aside from concerns over near-term crude considerations,
the US Federal Reserve's recent rate cut is evidence that the Fed has decided
to focus on shoring up the economy and not the dollar.

     "Worse, no statement from either the Fed or the Treasury in the past few
days has attempted to counter that view, arousing the further suspicion that
the US authorities would welcome a weaker dollar--because it would give a
boost to exports (the only truly bright spot in the economy right now) and
help to narrow the trade deficit," said PFC.

     One of the consequences of these moves and the depreciation of the US
dollar against the euro has been the flow of large amounts of new money into
oil contracts and commodities generally as a hedge against the weaker dollar
and inflation.

     OPEC has stayed quiet as to how it intends to counter the recent rise in
oil prices to record highs with no word that an emergency meeting is being
considered though some sources have referred to possible consultations by the
12-nation group if prices stay above $80/barrel for a protracted period of
time.
      
     HIGH PRICES MITIGATE IMPACT OF WEAK DOLLAR 

     However, the Saudi newspaper al-Riyadh, in an article on Saturday, quoted
informed OPEC sources as saying that there were no plans for consultations and
that the run-up in oil futures prices to record highs had served to mitigate
the impact of the weaker dollar on the revenues of producing nations.

     Al-Riyadh quoted its unnamed sources a saying that the depreciating
dollar was eroding the earnings of oil producers so high oil prices would help
to counteract the negative impact of the weaker greenback. This would ensure
that producers are able to invest the estimated $130 billion needed to fund
140 energy projects that will help to meet the world's future energy needs,
the paper quoted its sources as saying.

     The same sources were quoted as saying that the bull run on oil markets
was not caused by a scarcity of crude oil but was due to a host of factors
including speculation, Gulf of Mexico outages as well as a fall in US stock
levels.

     OPEC ministers agreed at a meeting in Vienna on September 11 to increase
their production target by 500,000 b/d from November 1.

     Iran's acting minister Gholamhossein Nozari said at a post-OPEC news
conference in Tehran that Saudi Arabia had pushed for an immediate increase
but had to agree a compromise because some members saw no need for an
immediate hike in production.

     A Platts survey of OPEC production showed that all 12 members produced a
combined 30.46 million b/d in August while the 10 members bound by production
restraint--excluding Iraq and Angola--produced 26.79 million b/d, in excess of
their 25.8 million b/d target in place since February.

     The September accord formalized roughly l of excess production with the
500,000 b/d increase coming on top of that starting November 1.
      
     UAE TO SHUT IN ROUGHLY 600,000 B/D 

     OPEC producer the UAE, meanwhile, confirmed Sunday that it would shut
down approximately 600,000 b/d of production during maintenance work on its
Upper Zakum, Lower Zakum and Umm Shaif offshore fields starting November.

     The loss represents over a quarter of the UAE's total crude oil
production of 2.59 million b/d as estimated in the Platts survey.

     The Abu Dhabi National Oil Company (ADNOC) said in a statement that the
maintenance program had been planned well in advance and ADNOC had worked
closely with its clients to ensure there is minimum disruption to its
activities.

     "ADNOC's commitments to its term clients are all met by advancing the
majority of liftings and some deferments that have been rescheduled by mutual
agreement," the company said in a statement.

     Industry sources say the Abu Dhabi has been ramping up production ahead
of the planned shutdown.

For tanker freight and fixture rates, request a free trial to Platts Clean
Tankerwire and/or to Platts Dirty Tankerwire at
http://www.platts.com/Request%20More%20Information/index.xml?story