Oil Prices Rising Again

Senate Holding Hearings Europe Declines To Follow U.S. Lead On Strategic Oil Reserves Gas Price Demonstrations Continue In Europe

LONDON, Sept. 26, 2000 AP (CBS) Oil prices are the subject as the Senate Energy and Natural Resources Committee convenes hearings Tuesday on Capitol Hill. Energy secretary Bill Richardson is scheduled to testify.

Oil prices crept higher in the world markets Tuesday, after losing nearly $3 a barrel since President Clinton's decision Friday to tap into Strategic Petroleum Reserve emergency crude stockpiles to stave off winter fuel shortages.

London Brent crude futures for November delivery were up 46 cents at $30.63 a barrel and U.S. benchmark light crude futures rose 37 cents to $31.94 a barrel in electronic trade.

Oil dealers are keeping a close eye on the European Union to see whether it might match the U.S. move and release its own emergency supplies.

But for now that possibility looks unlikely.

The European Commission said Tuesday there currently is no plan for the European Union to tap government reserves.

"As of now, there is no question of using strategic European stocks," a Commission spokesman said.

"For the moment the Commission hasn't any definitive position on the use to be made of the reserves," he said.

And Luxembourg's Prime Minister Jean-Claude Juncker said: "I would not give the recommendation to proceed...because reserves are reserves for real crisis."

The West's energy watchdog, the International Energy Agency said the IEA had not been approached by the EU about the possible use of emergency oil reserves.

"The European Union members are 15 of our members and if they were considering action no doubt they would want to coordinate with the broader IEA membership," IEA Executive Director Robert Priddle said.

He reiterated that the United States was the only country presently gearing up to release government stockpiles.

"I don't know of any country which intends to use stocks to match the American position. There are discussions but no decisions have been made."

Protests against high gasoline prices continue in Europe. Thousands of truckers from all over Germany clogged the streets of Berlin Tuesday, demanding relief from high gas prices. The government responded with an offer of low-interest government loans to mid-sized trucking companies, to help them weather the financial storm.

The loan offer was turned down by the truckers' association and the demonstrators.

"When you've got a sound business you don't need cheap credit," said 43-year-old Peter Kofahl, who runs a transportation company with eight buses and four trucks.

Other fuel protests continued elsewhere in Europe.

In Spain, Barcelona markets ran out of fresh fish while supplies in Valencia ran low after a week of fisherman's strikes and blockades to protest fuel costs. In Seville, farmers with tractors and trucks surrounded a regional fuel depot to stop fuel deliveries.

In Greece, motorists lined up at gas stations for the second day in a row, worried that a trucker strike there would lead to fuel shortages.

In the U.S., oil industry analysts say a harsh cold spell or any disruption to supplies could trigger a fresh rally in oil prices.

Jittery oil dealers also are watching Iraq for signs that Baghdad might disrupt some 2.3 million barrels per day (bpd) of oil exports to score political points in the run up to U.S. presidential elections in early November.

Once the Strategic Petroleum Reserve release gets under way in October, analysts said some relief, albeit psychological, would arrive -- with some predicting prices could slide to $25 before the end of the year.

Saudi Arabia, the world's largest crude exporter, voiced support for the U.S. decision to unlock reserves.

"The SPR release will stabilize the price of oil," Saudi Oil Minister Ali al-Naimi said on arrival in Caracas, Venezuela, where OPEC is gathering for a heads of state summit.

http://cbsnews.cbs.com/now/story/0,1597,236016-412,00.shtml

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