EU ministers to discuss release of emergency oil

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EU ministers to discuss release of emergency oil By Dan Bilefsky in Brussels and Andrew Ward in London Published: September 25 2000 21:23GMT | Last Updated: September 25 2000 21:47GMT

European Union finance ministers will discuss the possibility of member states releasing oil from their emergency reserves when they meet in Brussels on Friday.

The move would be aimed at further weakening crude oil prices, which fell sharply yesterday. They briefly dipped below $30 a barrel for the first time for a month following Friday's decision by President Bill Clinton to release 30m barrels from US strategic reserves.

Oil-consuming countries are anxious to drive prices well below $30 to head off threats to economic growth and to blunt political protests against high fuel prices that have spread across Europe.

November Brent crude, London's benchmark futures contract, finished yesterday at $30.24, around 12 per cent lower than last week's 10-year high.

In New York, November crude had $1.11 shaved off Friday's close as it fell to $31.57 a barrel.

The release of European oil reserves would represent the first concerted effort by EU states to use oil resources to bring prices down. It would also provide political cover to the Clinton administration, which has been accused of trying to ease oil prices to assist Vice-President Al Gore, the Democratic presidential candidate, in his campaign.

The International Energy Agency yesterday said it thought no countries other than the US were prepared to release reserves. Japan said it did not see the need for any co-ordinated international action on oil reserves.

But a spokesman for France, which holds the rotating EU presidency, said ministers would discuss how energy policy could be better co-ordinated - including the possibility of releasing oil reserves.

"European oil reserves are not that large, but co-ordinated policy could potentially help bring prices down," he said.

Under EU law member states have to maintain 90-days' reserves in three major product categories, covering automotive, air transport and fuel for heating.

Although member states are examining the possibility of using reserves, ministers have emphasised that putting pressure on oil-producing countries to increase output remains a priority. "Having a common strategy toward Opec is the most effective EU weapon," a French spokesman said.

This echoed a statement from ministers and central bank governors at the G7 summit in Prague this weekend, which pinned the blame for the trebling of the oil price in 15 months firmly on Opec.

Talks of better European co-ordination came as demonstrations against rising oil prices continued to cause gridlock in several EU states.

In Madrid, 300 truckers and taxi drivers took part in a three-hour slowdown called by the Platform for Fuel Consumers, which groups 21 associations of farmers, fishermen and transport workers. In Greece, nervous motorists lined up at petrol stations as deliveries came to halt following a truckers' strike.

http://markets.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3R3F7MKDC&live=true&tagid=ZZZHS5ZD20C&subheading=europe%20equities

-- Martin Thompson (mthom1927@aol.com), September 26, 2000


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