No sign of oil ban . . . yet

OIL & GAS

SHARPLY higher oil prices shed a little ground yesterday amid signs that Middle East tension would not spark a retaliatory Arab export ban against Israels Western supporters.

But dealers were not willing to sell decisively ahead of a weekend, for fear that violence could boil over again in the heartland of world petroleum during the break in business.

Traders scrambling to lock in supplies of petroleum pushed Brent crude 48 cents higher to $35.07 a barrel after a suspected bomb blast rocked the British embassy in Yemen.

That was just 23 cents off a fresh ten-year peak struck on Thursday amid fresh Israeli-Palestinian violence and a suicide bombing of a US warship in the southern Yemeni port of Aden.

Brent later eased to $33.90, for a fall of 69 cents, on word that Saudi Arabia would not consider suspending oil exports to punish US support for Israel. US light crudes were 36 cents off at $35.70 a barrel.

Market jitters eased after Saudi sources said the worlds biggest oil producer would not consider cutting oil exports to punish US support for Israel.

The sources said the kingdom had not raised the issue with the United States, which Arabs have long criticised for what they see as Washingtons unquestioning backing of Israel.

In addition, an industry official said Iraq planned no change to its policy of maintaining oil exports.

The source had been asked whether Middle East tension would result in Baghdad stopping its 2.2 million barrels per day of exports worth some five per cent of internationally traded crude.

Dealers have been deeply concerned over the possible implications that the Middle East turmoil holds for flows of petroleum to the worlds economies from a region holding the bulk of crude oil reserves.

"The word from Washington is containment. But containment is just not happening," said Peter Gignoux, head of the energy desk at Salomon Smith Barney.

"This is a terrible collection of circumstances."

http://www.thescotsman.co.uk/business.cfm?id=TS00163664&d=Business&c=business&s=0&keyword=the

-- Martin Thompson (mthom1927@aol.com), October 14, 2000

Answers

I think it's too early to rule out Iraq's cutting off its oil exports. Thier hatred of Isreal is so intense, it must gall them to think that a Jew could become Vice President of the United States. I'm still looking for an October Surprise from them.

-- Uncle Fred (dogboy45@bigfoot.com), October 14, 2000.