Saudis promise more oil

By Charlotte Denny and Paul Melly

LONDON: Saudi Arabia undermined the unified front Opec presented to the west at the Caracas summit on Thursday when it promised to pump as much crude as necessary to lower world oil prices.

The assurance from the world's largest oil producer that it would act came after Venezuela said on Wednesday that further attempts by western leaders to ease prices by dipping into strategic reserves would be met by cuts in Opec production quotas.

"The kingdom is willing and ready to offer the amount necessary to stabilise the world oil market," Crown Prince Abdullah said. "We are worried by the increase in oil prices which, if continued permanently, could lead to a negative impact on the world economy and the prospects for world economic growth."

His statement caused an immediate dip in world oil prices. Brent crude fell by 37 cents to $30.17 a barrel and US light crude fell 28 cents to $31.18.

Prince Abdullah repeated Opec's call for oil-importing countries to play their role in easing prices by reducing taxes on fuel. "We call upon consuming countries to share the sacrifice through the taxes that they impose on oil ... We are unfairly blamed for all the problems of the world economy."

Opec has increased production three times this year - to 3.2 million barrels a day - in response to diplomatic arm-twisting from industrialized countries, which are afraid that the 10-year peak in prices could spark inflation.

Last week the US announced that it would release 30m barrels from its emergency reserves over the next three months to shore up supplies, prompting the EU to consider similar action. However, some member countries say that such supplies should only be used for emergencies.

Oil prices have trebled in the last 18 months. This year's price rise has mainly been driven by fears of fuel shortages in the US, which consumes a fifth of world petroleum supplies.

Poor countries which have been hardest hit by the hike in world oil prices may get extra help from the International Monetary Fund, it emerged yesterday. The IMF warned last week that high oil prices could cut growth in poor countries by up to one percentage point.

The west's energy watchdog, the International Energy Agency (IEA), has called an emergency meeting of its governing board on October 4 to discuss the crisis in the world oil market. -Dawn/The Guardian News Service.

http://www.dawn.com/2000/09/30/int11.htm

-- Martin Thompson (mthom1927@aol.com), September 30, 2000

Answers

Where are we going to store all this extra oil. Oil storage is at a minimum since the oil companies discovered 'Just in time inventory'. I am sure there haven't been any new tankers built lately. Then as i have said before Refinery, Refinery.

-- Martin Thompson (mthom1927@aol.com), September 30, 2000.

More oil. More oil. More oil. Saudis promise more oil. Man, am I getting sick of hearing this story. It's like a broken record--over and over and over again. I wonder who they think they are impressing with this bilge.

-- Uncle Fred (dogboy45@bigfoot.com), September 30, 2000.

Often overlooked is the fact that the Saudis' spare capacity is in the boondocks, entailing long delivery distances overland before it can be loaded on tankers. Also, it is ALL the heaviest, sourest crude known (even worse garbage than that stored in our SPR). The refineries have to be magicians to be able to refine the stuff into the various fuels needed. This low quality product taxes them to the limit--and, as everyone knows, they are already taxed to the limit--to even get it out the door in the form of finished products. AND, IT SLOWS THEM DOWN CONSIDEABLY.

No, there's no quick, easy answer to the oil shortage problem. It is going to be with us for quite a while yet.

-- JackW (jpayne@webtv.net), September 30, 2000.

Promises, promises, promises; yet I read somewhere that Saudi deliveries to the U.S. are running well behind last year.

-- Nancy7 (nancy7@hotmail.com), September 30, 2000.

This is nuts! How about spending money on wind power, etc. I understand that constructing a wind farm is a whole lot cheaper and quicker than new tankers, refining capacity, piplines etc. And then there's solar. Seems to me the answers are already available and so is the $. We don't have to use oil for ALL our power. Am I missing something?

-- poconojo (jberman478@aol.com), September 30, 2000.

Wind farms, while theoretically feasible, only work well in areas of bald hills and high wind velocity. Unfortunately, there are too few of such suitable areas in the country to take care of the population concenrations required.

Solar, while appealing as an energy source ("Just let the sun heat our homes."), is, sadly, a 30-year foot-dragging technical development. It is hardly further along than it was during the 1970's when it was universally called for as an "easy" answer to the crisis in oil supply. It is tremendously expensive to construct adequate panels to take care of large areas, and, overall, it is still about as inefficient as the electric car (which requires a battery re-charge eveery 75 miles).

There has been some preliminary work on hybrid windmill--solar power, but this R & D work is in its infancy. And, even if successful, is at least 10 years down the road from practicality.

-- JackW (jpayne@webtv.net), September 30, 2000.

I have to agree. I have been off the grid
using solar for 12 years. I am completely
dependent on fossil fuels to make this
system work. The fuel crisis will affect
me also. The only ace that I have in the
hole is my bicycle :-'

-- spider (spider0@usa.net), September 30, 2000.

What I can't understand is why can't we make up for imported oil by exploiting our enormous natural gas reserves, which, I understand are big enough to last us a hundred years? This is, by far, the cleanest burning fosil fuel -- and, the quickest and easiest to get at -- and, even motor vehicles can be powered by it.

What am I missing?

-- RogerT (rogerT@c-zone.net), September 30, 2000.