Business News

Oil dealers on Mid-East alert

12.10.2000

LONDON - Oil prices rose yesterday as nerves jangled over rising Middle East tensions and consumers shivered through an early cold spell in the United States northeast.

The benchmark Brent blend crude-oil futures - for November delivery - closed $US1.10 higher at $US31.85 but were short of a 10-year high of $US34.98 touched in September.

Dealers took fright at a statement from Saudi Arabia - late on Tuesday - that warned that Riyadh and other Arab states would not stand idle if Israel acted against Lebanon and Syria.

A source familiar with Saudi thinking said, however, that Riyadh would not retaliate by considering an embargo on oil supplies.

"This is not even being talked about. It is not being considered. It is out of the question," the source said.

"Using the oil weapon would be using a weapon against ourselves," he said of Arab oil producers.

"We would lose status in the world order and our economies would be hurt."

In October 1973, Saudi Arabia's King Faisal sanctioned the Arab oil embargo to punish the West for its support of the Arab-Israeli war.

- REUTERS

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-- Martin Thompson (mthom1927@aol.com), October 11, 2000