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The Wall Street Journal: Oil News Roundup: August 16, 2006 5:49 p.m.

THE WALL STREET JOURNAL ONLINE
August 16, 2006 5:49 p.m.

Crude-oil futures tumbled to less than $72 a barrel on the New York Mercantile Exchange, their lowest close since late June, after OPEC cut its outlook for global oil demand. Here is Wednesday’s roundup of energy-related news:

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QUESTIONING FORCE MAJEURE: The Associated Press reports that some analysts are questioning whether Exxon-Mobil and ConocoPhillips should be able to declare force majeure on oil shipments from Prudhoe Bay, which is operating at less than half its normal capacity due to corrosion in some key pipelines. Force majeure, which lets oil companies break contractual obligations to deliver oil, is typically based on natural disasters or war, these analysts note, and the oil field’s partial shutdown was the result of neither.

•OPEC Cuts Forecast: OPEC cut its forecast for oil demand for the rest of 2006, citing slower growth in the world’s developed economies.

•Another Prudhoe Setback: BP, the operator of the Prudhoe Bay field, suffered yet another operational setback, announcing plans to inspect a major pipeline in the field after two mishaps in recent days.

•More Leases in Alaska: The Interior Department is set to open a vast area of environmentally sensitive wetlands in Alaska to new oil drilling, even as opponents point to the problems at nearby Prudhoe Bay as a reason to keep the area off-limits, the AP reports.

•Venezuela to Boost China Sales: Venezuela plans to increase its oil sales to China to 200,000 barrels a day from the current 150,000 barrels per day by the end of the year, the country’s oil minister said.

•Alleged Kidnappers Arraigned: The Nigerian government arraigned four men before the Federal High Court for allegedly kidnapping oil workers and disrupting oil activities, the first such charges filed after months of disruption in the Niger Delta.

•Over a Barrel: In an oil-related publicity stunt, JetBlue Airways on Tuesday announced a special one-way fare for flights between Houston and New York: “For one week starting today, the price for a barrel of oil at each day’s market close [rounded down to the nearest dollar] will determine the new one-way fare,” the discount airline said in a press release. Yesterday’s one-way price: $73.

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