World 'faces oil crisis'greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Tuesday, 12 September, 2000, 10:09 GMT 11:09 UK
World 'faces oil crisis'
Oil prices continued hovering around 10-year highs on Tuesday after the president of the Organisation of Petroleum Exporting Countries said the world was in danger of facing a serious oil crisis.
We said before we intend to bring the price down and we will bring it down Saudi oil minister Ali al-Naimi Crude oil futures gained 14 cents in after-hours ACCESS trading in New York to reach $35.28 a barrel, having already climbed by more than $1.50 on Monday.
In London, Brent crude oil futures were up 51 cents at $34.13 a barrel at 1000 GMT, having hit a decade high of $34.60 last week.
The fresh price rises followed comments by Ali Rodriguez, who is also Venezuela's oil minister, who said on Monday: "We are approaching a crisis of great proportions because oil production capacity is reaching its limit".
He was speaking after an Opec conference at which the organisation had agreed to raise oil production by 800,000 barrels a day from 1 October.
He claimed there were many factors behind the current high price of oil, such as refinery bottlenecks, transport restrictions, high taxes in oil importing countries and speculation on the financial markets.
Saudi Arabia, he said, was one of the few countries left with spare capacity and it could act as a "tuning producer" to try to settle the crude oil price at Opec's $25 a barrel target.
The price of oil initially eased from its recent highs after Opec announced the production increase, but later on Monday it climbed again, as the markets were unconvinced that the increase would be enough.
Analysts said the higher price reflected disappointment at the "modest" level of the 800,000 barrel a day production rise.
They said strong demand over the winter months combined with a continuing squeeze on supply would keep prices firm in the short-term at least.
Opec ministers say they might increase output again when they meet on 12 November.
"We always have that choice," Saudi Arabian oil minister Ali al-Naimi said.
He also said: "We are not happy. We said before we intend to bring the price down and we will bring it down."
Given the difficulty Opec is having in getting the price to drop and stay down, the ministers may decide they need to act much sooner.
-- Martin Thompson (email@example.com), September 12, 2000
This fallacy that OPEC is so critical to world oil supply is belied by the fact that the major non-member producers--Norway, Mexico, Canada, and Russia--cannot produce enough oil for their own countries now. This is attested to the high prices of fuel in their own countries. OPEC now controls 30% of the world's oil supply, that's all.
They are way overestimated as the force that they actually are.
-- Wellesley (firstname.lastname@example.org), September 12, 2000.
Didn't Russia recently say no more exports, we've got to provide for the home folks first?
-- Uncle Fred (email@example.com), September 12, 2000.
I find that I'm paying less and less attention to what OPEC says about oil lately, and more and more to what countries like Russia and Canada have to say.
-- Loner (firstname.lastname@example.org), September 12, 2000.
I find the fact that the oil market didn't pull back today, after a $1.50 runnup yesterday, alarming. Today it should have pulled back a bit on profit taking.
-- Wayward (email@example.com), September 12, 2000.