Posted on 03/15/2004 5:50:58 PM PST by Tumbleweed_Connection
FEARS are mounting that Opec is preparing to cut the supply of crude oil, a move that would send US petrol prices surging to new highs and threaten America’s economic recovery. The price of a barrel of crude gained a dollar in London and New York as futures traders reacted to signals that the oil cartel is determined to implement a million barrel per day cut by April 1. Worries that a terrorist attack might disrupt Middle East oil supplies increased tensions, helping the New York futures price to rise above $37 per barrel. Fearing the emergence of a supply glut, the oil cartel agreed in February to reduce its quota by a million barrels per day by April 1 and at the same time to eliminate overproduction by its members, then running at 1.5 million barrels per day. While there have been few signs of production cuts, the oil price has surprised by its strength, buoyed by an unexpected surge in demand from China. Meanwhile, Opec’s hawks are pushing the cartel to raise its price band above the $22-$28 range. Hugo Chavez, the Venezuelan President, has called for a $25-$32 price range and a Nigerian government oil official said on Sunday, “We’re seeing a new equilibrium emerging over the past few months . . . therefore we need to move the band.” The aggressive mood reflects anxieties among Opec producers about the fall in the value of the dollar which has eroded the spending power of the oil-dependent Opec economies. The dollar’s decline over the past two years has cut 20 per cent from the value of every dollar of oil revenue. Analysts reckon that loss of earnings has kept Saudi Arabia, the leading producer and traditionally a promoter of oil price stability, from using its power to bring prices down. Opec’s reference crude price, currently at $32 per barrel, has remained above the $22-$28 price band for several months with no reaction from the cartel. Instead, Opec members insist that production cuts are on the agenda at a meeting of oil ministers scheduled for March 31. They point to the restoration of Iraqi oil production and a traditional demand lull at the end of winter. “They are taking advantage of the situation to make money,” commented Adam Sieminski, an oil analyst at Deutsche Bank. “The danger of doing this is the longer you have oil prices at the top of the range, the greater the risk of a price collapse.” There is growing concern among some analysts that Opec is getting it wrong and could stifle economic recovery before it is fully established. The Centre for Global Energy Studies has stated that we are witnessing a rare period of acceleration caused by extraordinary growth in demand for energy from China at a time of low US crude oil stocks. “Opec and others are misreading the market and risk choking off a period of strong demand growth, throwing the oil industry into disarray in the process, in order to avoid an unlikely price collapse,” the CGES said in a recent report.
/sarcasm?
It's more important for homosexuals to marry, don't you know?
The environmental whack-offs control the Democrat Party.
If there was a billion barrels of oil in one old growth tree, the whackos would rather see $10 a gallon gas than hurt one branch of that tree.
It's truly pathetic how Americans let the crazies rule the roost.
It's just grand to murder 50 million unborn innocent Americans and then have to import workers from the third world.
Yes, the crazies run the operation.
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