Opec split on output increasesgreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Opec split on output increases By Andrew Ward Published: October 15 2000 18:14GMT | Last Updated: October 16 2000 10:33GMT
A split emerged between oil producing countries on Sunday when Saudi Arabia spoke in favour of increasing output to help combat high crude prices, while other Gulf states warned against the measure.
Ali al-Naimi, Saudi oil minister, said the Organisation of Petroleum Exporting Countries might increase production before its next meeting on November 12 if prices stayed above the cartel's target price range of $22-$28 a barrel.
In London, Brent crude traded above $35 for the first time since the 1990 Gulf War last Thursday after anxiety about violence in the Middle East added to underlying concern about low stocks of crude and heating oil in the US.
"If there is demand, Opec and other producing countries are more than ready to give the market what it needs... If the price is above the limit we set then there is no doubt we will increase supply," Naimi said at a conference in the United Arab Emirates.
But neighbouring Opec members said prices had soared for "psychological" reasons relating to political unrest in the Middle East and that an increase in output was unnecessary.
On Sunday, the US government began pumping to oil companies the 30m barrels of crude ordered for release from emergency reserves to bolster stocks.
But some Opec members insisted that tightness in fuel supplies was not caused by shortage of crude but by lack of capacity in US refineries.
"The fear is us pumping more oil and triggering a big drop in prices. I am very afraid of the second quarter next year when a fall in demand will cause prices to fall sharply," said Abdullah bin Hamad al-Attiyah, Qatar's oil minister.
Meanwhile, Saudi Arabia further cooled fears that it might cut oil exports to the US and its allies in protest at Israel's military action against Palestinians.
Saudi Crown Prince Abdullah last week threatened "decisive measures" if Israeli attacks continued.
However, a member of the Saudi Royal family said an embargo against Israeli sympathisers was unlikely.
-- Martin Thompson (firstname.lastname@example.org), October 16, 2000
Everybody calls Iraq the wild card in oil. How about Iran? They get pretty testy at times too. With 76 million barrels of oil consumed around the world, and nearly half of it shipped out of the Red Sea, all Iran would have to do is cut off the narrow Straits of Hormuz for a few days, and you wouldn't see quick $50 oil. It would be $100, or more.
-- Wellesley (email@example.com), October 16, 2000.