Energy Insight News for Friday, November 16, 2001
Terrorism elevates energy policy importance

Even with a high-powered electron microscope, it is hard to see any silver
lining in the clouds surrounding the events of Sept. 11. The attacks on the
U.S. did, however, spotlight the country's need for more domestic oil and
gas reserves and a uniform national energy policy.

Initially, the Bush/Cheney energy plan was bumped down on the White House
and Capitol Hill's list of legislative priorities. But that plan, in
different formulations, has begun to resurface, propelled by a new sense of
urgency that could turn into a crisis if retaliatory American military
action destabilizes an already unstable Middle East, bringing about another
oil shock.

The war against terrorism could still push energy off the political agenda
because lawmakers have no time to focus on it. But commodity indices could
end up benefiting should policy makers decide to pursue U.S. energy
independence, even though it remains unclear, as yet, how that might
ultimately play out.

American independents have always had an ambiguous attitude toward the
Organization of Petroleum Exporting Countries (OPEC). For decades, the
cartel has kept global oil prices, for the most part, high, which obviously
has helped U.S. producers.

"Independents have a great love-hate relationship with OPEC. When they are
doing what they are doing now-that is, keeping the price at a range which
makes sense for them economically-it generally works out pretty well for us
as well, because it's a price that keeps oil in the $20-something range,"
said Lee Fuller, vice president of government relations for the Independent
Petroleum Association of America (IPAA), the industry's Washington-based
trade group. "And that's about where it needs to be to have a healthy
domestic industry. But when they (OPEC members) start getting into the fight
that they got into for market share in 1998 or 1999, then they have the
capability to really drive the price down." Read the entire story at
http://www.energyinsight.com. 
Also, catch the latest news headlines on Energy Insight Executive, updated
twice daily.
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Market Brief    Thursday, November 15           	
Stocks  Close   Change  % Change	
DJIA    9,872.39        48.8    0.50%	
DJ 15 Util.     289.76  (3.9)   -1.34%	
NASDAQ  1,900.57        (2.62)  -0.14%	
S&P 500 1,142.24        1.0     0.09%	
                        	
Market Vols     Close   Change  % Change	
AMEX (000)      171,605 8,536.0         5.23%	
NASDAQ (000)    2,020,360       (155,735.0)     -7.16%	
NYSE (000)      1,463,225       48,591.0        3.43%	
                        	
Commodities     Close   Change  % Change	
Crude Oil (Dec) 17.72   (2.02)  -10.23%	
Heating Oil (Dec)       0.5155  (0.046) -8.14%	
Nat. Gas (Henry)        2.565   (0.111) -4.15%	
Propane (Dec)   31.50   (2.75)  -8.03%	
Palo Verde (Dec)        26.25   (1.00)  -3.67%	
COB (Dec)       31.50   (1.50)  -4.55%	
PJM (Dec)       27.50   (0.10)  -0.36%	
                        	
Dollar US $     Close   Change  % Change	
Australia $     1.929   0.004   0.21%	
Canada $        1.59    (0.005) -0.31%	
Germany Dmark   2.22    0.005   0.23%	
Euro    0.8819  (0.000) -0.06%	
Japan ?en     122.4   0.800   0.66%	
Mexico NP       9.21    0.020   0.22%	
UK Pound        0.6985  0.0052  0.75%	
                        	
Foreign Indices Close   Change  % Change	
Arg MerVal      227.33  5.85    2.64%	
Austr All Ord.  3,276.00        7.00    0.21%	
Braz Bovespa    12825.62        0.00    0.00%	
Can TSE 300     7262.90 (86.55) -1.18%	
Germany DAX     5006.33 52.80   1.07%	
HK HangSeng     11239.39        289.35  2.64%	
Japan Nikkei 225        10489.89        403.13  4.00%	
Mexico IPC      5778.65 26.93   0.47%	
UK FTSE 100     5,238.20        (2.50)  -0.05%	
                        	
Source:  Yahoo! & TradingDay.com                        	
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Executive News
Kuwait says OPEC's target price band too high
Kuwait believes OPEC's average target price of $25/barrel for OPEC's crude
basket, mid-range of a $22-$28 price band, is too high given the state of
the world economy, Kuwaiti oil minister Adel al-Subih said Thursday. 

"We as Kuwait...would be satisfied with the lower half of the band," Subih
said, adding that Kuwait had proposed lowering the band to $20-$25/barrel.
"I think OPEC will reconsider the price band at a later stage." Subih said
Kuwait had also suggested that the price band mechanism become "a target
rather than a mechanism." 

Under the mechanism, OPEC could cut or increase production by 500,000
barrels per day if prices strayed from the band for a determined period of
time, but this has been allowed to lapse since the recent slide in prices
and the economic uncertainty following the Sept. 11 attacks in the U.S.
Subih said Kuwait had based next year's budget on a price of $15/barrel for
Kuwaiti crude. 

"I see there will be very hard times to come in the form of very low prices
and then things will square out," Subih said when asked how long it would be
before non-OPEC agreed to cooperate. But he stressed OPEC's move did not
constitute a price war. "We are not talking about a price war. That would
mean dumping oil. We have huge excess capacity and that we do not intend to
do," Subih said. 

He added OPEC was making an "offer that is hard to refuse" in offering to
cut 10 barrels in return for one from non-OPEC producers. "There is no time
frame but I would say before January, we will have something developing.
Already there are positive signals from non-OPEC producers." Subih said OPEC
had been forced to act because independent producers had failed to respond
to calls for voluntarily output cuts on three occasions this year when OPEC
had slashed output by 3.5 million barrels per day. 

Caterpillar and FuelCell Energy agree to jointly distribute fuel cell
technology
Caterpillar Inc. and FuelCell Energy, Inc. have signed an agreement to
distribute fuel cell products for industrial and commercial use. Under the
agreement, Caterpillar will distribute FuelCell Energy products through
selected Caterpillar dealers in the United States. Both companies will also
pursue an alliance to jointly develop fuel cell systems, including highly
efficient hybrid products integrating Caterpillar's turbine engine
technology. "We view this agreement with Caterpillar as a significant
milestone for FuelCell Energy, because it will strengthen our market
opportunities and enhance our distribution channels," said Jerry Leitman,
FuelCell Energy's president and chief executive officer, in a statement.
"Both companies stand to benefit from this strategic relationship as we work
together to provide efficient fuel cell energy to distributed power
generation markets--particularly in California and the northeastern United
States."

To subscribe to our Executive News Service, which is updated twice daily,
log on to http://www.energyinsight.com, or contact Platt's Direct Response
Team at 1-800-424-2908 (if outside the United States call 1-720-548-5700).
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