19-September-2000

Oil's ten-year high no help to ailing euro OIL prices resumed their upward climb yesterday, hitting new ten-year highs in the process and dealing a further blow to the beleagured euro.

Oil rose to $34.90 for a barrel of Brent crude on the London spot market as dealers reacted to renewed Middle East tensions.

Iraqi President Saddam Hussein had stepped onto the volatile world oil stage, warning fellow OPEC member states against pressure mounted by ``superpowers'' on producers to knock down runaway prices.

The warning came after Baghdad renewed allegations that Gulf neighbour Kuwait was stealing its oil but traders remain just as concerned about lowly levels of heating oil inventories.

High oil prices were blamed for another fall in the euro yesterday, which hit new lows against the US dollar. With oil priced in dollars eurozone countries are judged to be doubly vulnerable to rising oil costs.

The only good news came when OPEC powerhouse Saudi Arabia indicated that production would rise if the crisis continues. ``If prices stay as high as they are, there is no doubt that OPEC will reach an agreement to increase production. There is no doubt it will happen,'' the Saudi source told Reuters news agency.

OPEC would lift output by at least the 500,000 barrels a day agreed under an informal pact to boost supplies if the price of a basket of OPEC crudes stays above $28 for 20 consecutive working days, the source added.

US Defence Secretary William Cohen said in Singapore on Sunday that the United States was watching Iraq closely and would not allow President Saddam Hussein to become a threat again.

Iraq's most influential paper, Babel, said the United States was planning a new military attack against Iraq.

As OPEC weighed its production policy options, angry truckers and farmers in Europe stepped up their protests, blockading ports and petrol depots.

http://www.independent.ie/2000/262/b14e.shtml

-- Martin Thompson (mthom1927@aol.com), September 19, 2000