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The Wall Street Journal: Oil News Roundup: October 23, 2006 5:27 p.m.

October 23, 2006 5:27 p.m.

Crude-oil futures tumbled again, settling at less than $59 a barrel on the New York Mercantile Exchange, as doubts grew about OPEC’s ability to keep supplies low enough to support prices of $60 or more. Here is Monday’s roundup of oil and energy news:

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EXXON TO SELL GAS TO CHINA: Exxon Mobil said it has reached a preliminary agreement to sell natural gas from a project on Russia’s Sakhalin Island to China. But the U.S. energy giant still needs to make a deal with OAO Gazprom, the Russia’s state-controlled gas monopoly, to get the fuel to market. The $12.8 billion Sakhalin-1 project is starting to ship crude oil to Asian markets, but has held back large-scale gas development pending a deal on exports, which initially had been slated to start next year.

•OPEC Notifies Japan of Production Cut: Saudia Arabia gave Japanese refiners official notice of a cut in shipments, hard evidence that OPEC is serious about its threat of a production cut.

•Shell President Doubts Cuts: But John Hofmeister, president of Shell Oil Co., the U.S. unit of Royal Dutch Shell, said he doubted the OPEC cuts would last, Reuters reports, saying the current glut of global supply would dry up eventually.

•Shell to Buy Rest of Shell Canada: Shell also said it would buy the rest of Shell Canada it doesn’t already own.

•Merrill to Buy Petrie Parkman: Merrill Lynch agreed to buy Petrie Parkman & Co., a Denver energy-industry investment bank that had filed in September for an initial public offering.

•Petrol Profits Pinched: The oil industry’s profit party is still raging, just not as wildly as last year, the Associated Press reports in a walkup to this week’s Big Oil earnings reports.

•Oil Worker Threatened With ‘Sacrifice:’ A British oil worker held by Nigerian militants for nearly three weeks said his captors threatened to “sacrifice” him, the Telegraph reports.

•Cover Up Those Signs: The trouble with gasoline prices is that they’re so easy for consumers to understand, software engineer and blogger Tim Iacono says in a somewhat tongue-in-cheek commentary at Seeking Alpha. and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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