Venezuela hits back at Europe, US over oil price ..........CARACAS (August 24) : Oil exporter Venezuela, currently president of the Opec cartel, hit back at pressure from Europe and the United States on Wednesday, blaming consumer governments for world oil prices that are simmering around their highest level in a decade.

..........The European Union, in co-ordination with the United States, called on Venezuela on Tuesday to "moderate its stance" and help bring prices back to "reasonable levels" to avert the risk of inflation or recession in the industrialised world. ..........Hector Ciavaldini, president of Venezuela's state oil company Petroleos de Venezuela, made a spirited response in a television interview, blaming the EU and the US for creating high prices at the pump through market speculation, high taxes and costly environmental regulations. .........."The pressure should be on consuming countries to reduce the taxes which cause high prices and reduce the speculation ... which means that prices rise and fall according to financial positions on the exchanges," he said in an interview on Globovision television station.

.........."Prices are high not because of a shortage of barrels in the market. They are the result of new environmental norms... and the high price of gasoline which is pulling crude prices up," he added. ..........US benchmark crude oil West Texas Intermediate was hovering just below $33 a barrel on Wednesday, revisiting the highs of the 1991 Gulf War, as the nation's crude supplies slipped dangerously near 24-year lows. ..........Europe and the United States have called on the oil cartel, which contains the only producers with spare production capacity, to raise supply to world markets when it meets on Sept. 10 at its Vienna headquarters. ..........NO MORE BARRELS NEEDED: Ciavaldini said the oil market was balanced and did not require any more barrels from Opec. .........."If we put more crude on the market, inventories are going to rise and at the end of the day we will be in the same position as in past years when high stocks caused a price crash," he said. ..........Ciavaldini is one of the most powerful figures in the government of Hugo Chavez, a radical nationalist who is planning to host next month the cartel's first heads of state summit in 25 years. ..........Opec is still smarting from a price slump in 1998 and early 1999, which created a severe recession in producing countries and prompted the cartel to make drastic export curbs.

..........Earlier this week, Ciavaldini argued that oil prices were not actually as high as some people believe. ..........In the dollars of 1975, Venezuela's current oil export price of $28-$29 per barrel was equivalent to $6.70 per barrel, he said. Moreover, if the 1975 oil price was projected forward to the present, including adjustment for inflation, it would be equivalent to $75 per barrel. .........."Between $75, which is the price which would give us the same purchasing power as 1975, and $30 per barrel there is a big gap where humanity must decide on a just level," he said in a radio interview Monday.

..........European governments tax motor fuel at about 200-300 percent, which means that they make more money from sales at the pump than the oil producing countries.-Reuters ..........Copyright 2000 Reuters (Published under arrangements with Reuters)

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-- Martin Thompson (mthom1927@aol.com), August 24, 2000