World Faces Possible `Energy Crisis,' OPEC President Says : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Mon, 11 Sep 2000, 4:19pm EDT World Faces Possible `Energy Crisis,' OPEC President Says By Sean Evers, Alison Flint, Alex Lawler, Joshua Schneyer and Stephen Voss

Vienna, Sept. 11 (Bloomberg) -- The world will face higher oil prices and restricted supplies if oil production capacity isn't increased and refineries don't make more petroleum products, the president of OPEC said.

``The world is facing a possible energy crisis, and OPEC alone simply doesn't have the power to control it,'' said Ali Rodriguez, president of the Organization of Petroleum Exporting Countries and Venezuela's oil minister.

OPEC announced yesterday it would boost output quotas by 800,000 barrels over its current ceiling of 25.4 million barrels a day, in order to lower prices that have rallied 37 percent to a 10- year high and threatened world economic growth.

Crude oil for October delivery on the New York Mercantile Exchange rose to $35.85 a barrel, a 10-year high, on speculation that OPEC's output rise won't be enough to replenish inventories and meet growing demand.

``There isn't a big risk in the short term, but we could see $40 oil if there's a cold winter,'' Rodriguez told reporters in Vienna at the end of a meeting of OPEC ministers.

It is ``our intention to bring the oil price down to close to $25 a barrel,'' Ali al-Naimi, Saudi Arabia's oil minister, told reporters in a separate press conference. ``More oil is coming and it will be 800,000 barrels of new oil,'' he said.

Saudi Arabia, OPEC's biggest producer, said the oil exporters will increase output by 800,000 barrels a day over August production, contrary to earlier statements, which indicated the increase would be over the organization's quota level.

-- Martin Thompso (, September 11, 2000


I am beginning to believe more and more in the refinery bottleneck theory -- it makes sense.

-- RogerT (, September 11, 2000.

It seems to me, also, that the OPEC president is talking sense.

-- Loner (loner@bgfoot.coom), September 11, 2000.

The big question to me is when will Wall Street wake up to what's going on. The big rise in oil stock prices ought to be telling them something.

-- Wayward (, September 11, 2000.

If Wall Street continues to sleep, do an end run, buy heating oil call options. May 1 it was going at $66.85 for the six-months-out call option contract, today, $90.43. On natural gas, $332.00 on May 1, $466.10 today. Both had only moderate strike prices.

There's a lot of money to be made off this crises--as long as Wall Street continues its slumber.

-- JackW (, September 11, 2000.

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