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Here is a summary of what our key contacts are saying on the oil market: SPR: We still expect the Administration to announce an SPR fill plan very soon. The original date has been postponed because work has been seriously disrupted up here due to anthrax scares. We expect them to start with royalty oil, which means that companies drilling in Federal lands in the USG can pay some of their taxes in oil instead of money (like they did in 1999). But DOE sources believe that this (approx 100kb/d) will not be enough for proponents of the plan, and they will want to expand the SPR fill to include purchases either through the spot market or through off-market contracts with key oil producing states. IRAQ: Sources believe that the US will try again for "targeted sanctions" when the oil for food program comes up for renewal in early December. Like last time, there will be Iraqi disruptions, and also like last time, the US will likely give up after making a symbolic stand. Bottom line -- we expect around 4-6 weeks of Iraqi oil export disruptions.

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Oil Update from Washington