Posted on 03/30/2004 9:43:19 PM PST by windchime
Most of the Organisation of Petroleum Exporting countries on Tuesday favoured a cut of 1m barrels a day in oil output, despite increased concern in consuming countries that high crude prices threaten the world economy.
Saudi Arabia, the world's biggest exporter of oil and Opec's most influential member, on Tuesday confirmed it wanted the group to reduce output to stem the rise in oil inventories in consuming countries and hinder a fall in prices as demand declines this spring.
Ali Naimi, Saudi Arabia's energy minister, said on Tuesday:"More oil now will make a glut in the market and force prices to collapse, something we don't want. "Throwing more oil on the market because of high prices where they are today, would be destructive."
Saudi Arabia - backed by Venezuela, Libya, probably Iran and many of the smaller Opec members, wants the group to implement its decision of last month to cut its quota by 1m b/d to 23.5m b/d.
As of Tuesday, only Kuwait and the United Arab Emirates appeared to be in favour of postponing the cuts.
But even if Saudi Arabia gets its way, as appears likely, it will face the delicate task of convincing consumers that they will not be left starved for oil.
Washington officials have already begun pressing producers not to make the cuts. Meanwhile, investment banks have begun to predict that oil will this year have an increasing impact on the world's economic recovery.
Goldman Sachs estimates that growth in the Group of Seven industrial countries will be 0.3 per cent lower in the next 9-12 months because of the rise in oil prices. In the US, the bank believes the fading effect of the tax cuts will bring the pinch to real incomes to the fore.
Michael Rothman, analyst at Merrill Lynch, said Opec was only partly responsible for the rise in oil prices, which on Tuesday was trading up 85 cents at $36.30 on Mymex, while London Brent crude climbed to $32.49 up by 75 cents.
Mr Rothman believes $5-$7 of the price is attributable to hedge funds, that have entered the market in record numbers. Some funds are seeking a sanctuary from a falling dollar by investing in oil futures - whose prices go up as the greenback falls.
"Opec's real dilemma is trying to get people to understand the difference between a cut that meets market requirements or a cut in supply that makes the market have to scramble for barrels," Mr Rothman said.
(Excerpt) Read more at news.ft.com ...
from August 21, 2000OIL was -> Re: Why George Soros went wrong by Daniel Watkins 21 August 2000 10:53 UTC
Excerpt
i DO believe GS has been talking about this to their private client group and the partners, their denial notwithstanding. the big Q in my mind is this, fwiw: the oil companies do not want to become an issue, again, in the campaign if they can help it. i suspect they will do everything they can to keep prices at the pump tame until after early november and, of course, that will be just fine with the democrats who want to keep the failed energy policy of clinton/gore quiet until after the voting. so, the Q: will they be able to do it ? on one hand you have rubin's GS, who has a stake in a public "no problem" posture. on the other hand, they know better and are so informing their big customers. GS = George Soros rubin's GS = Robert Rubin - Citibank Iraq Revenue Watch: Monitoring Iraq Reconstruction Funds, ... Soros initiated group Balkan Repository Project - The Secret Financial Network Behind 'Wizard', George Soros Marc Rich connection Google + Marc Rich + Soros' Quantum Fund Google + Marc Rich + George Soros + Oil Investigating Marc Rich and his deals with Nigeria's Oil The double life of Marc Rich 2-12-01 MSNBC
What Marc Rich Did James Higgins - NY Post - February 13, 2001
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