Posted on 05/10/2004 5:59:08 AM PDT by RWR8189
LONDON (Reuters) - World oil prices tumbled from 13-year peaks at $40 Monday after leading world exporter Saudi Arabia said OPEC should raise supply to stop high prices hurting world economic growth.
The Saudi remarks reassured markets after a sabotage pipeline attack at the weekend struck Iraq's crude exports, reinforcing fears over Middle East supply security.
U.S. light crude slumped $1.30 a barrel to $38.63, after striking the $40 mark Friday for the first time since October 1990 in the run up to the first Gulf War. London's Brent crude was down $1.35 at $35.65 a barrel.
Prices slid after Saudi Arabian Oil Minister Ali al-Naimi said OPEC should raise its production target by at least 1.5 million barrels per day (bpd), just over six percent, from an existing 23.5 million bpd when it meets on June 3.
"We ... do not want to see prices rise to the level that they negatively affect the growth of the international economy or the demand for oil," said Naimi. "It is apparent that demand, especially that of Asia, has and will continue to increase in the second half of this year."
OPEC cut its ceiling by one million barrels daily, or four percent from April 1, to head off a fall in prices when demand ebbs after the northern winter.
The curbs -- combined with concern over Middle East security, low U.S. fuel supplies and strong Chinese demand -- have fueled oil's rally, alarming importing nations about the possible impact on economic growth.
High prices have deterred OPEC from enforcing the cutbacks in full, and the group is producing around two million bpd above its formal limits.
Fellow Gulf members the UAE and Iran over the weekend also said OPEC could raise official quotas to cool the price surge, which has added $7 a barrel, or 22 percent, to the cost of crude since the turn of the year.
Algerian Energy Minister Chakib Khelil said oil prices will not fall much even if OPEC agrees to raise supply as most members are already pumping at capacity and Middle East tensions would keep markets on edge.
"It doesn't matter whether we increase or not, it's not going to have an impact on prices," Khelil said.
ECONOMIC WORRIES The Bush administration, worried about rising gasoline costs in a U.S. election year, has led calls for OPEC to increase supplies.
Oil importing nations are increasingly worried about the impact on economic growth, although analysts say that the world is far less exposed to a rise in energy costs than in the oil shocks of the seventies.
"In 1973, oil prices quadrupled in a matter of months. In 1979, they doubled in less than a year. The current price increases remain, thus far, relatively moderate," said Frederic Lasserre of Societe Generale bank.
The Saudi comments outweighed the impact of a weekend assault on a southern Iraqi pipeline that sliced into exports from Iraq's main Gulf oil export terminal
The attack came just two weeks after U.S.-led forces foiled suicide boat attacks on tankers at the terminal, casting further doubt on Iraq's ability to sustain crude supplies to world markets.
The extent of damage from Saturday's sabotage attack was unclear, with Iraqi and U.S. assessments at odds.
Iraqi oil officials said exports were still flowing from Basra at a reduced rate of 1.2 million barrels per day (bpd) compared with 1.6 million bpd before the attack as the terminal was being fed by another pipeline system.
The U.S. Army Corps of Engineers said Iraq had halted oil exports from its offshore southern terminals.
Last week's shooting of foreign workers at a petrochemicals plant in Saudi Arabia, fueled fears of a larger attack on the kingdom's tightly-guarded facilities.
Fellow Gulf producer Kuwait has beefed up security at six ports after U.S. warnings to oil-rich Gulf states of possible sea borne attacks by booby-trapped boats or jet-skis.
Preferably right over the eco-weenies themselves, forget their objections :)
Do you have to modify the vehicle's engine to accept cooking oil or corn oil?
I'm not qualifed to answer that question but did note that they are modifying the oil w/ methanol. I assume the reason for that would be to increase the viscosity. These are diesel engines & diesel is a light oil, lots lighter than cooking oil.
IOW we want to maximize profits. Not that I blame them, that's good ole fashioned capitalism. A lot of freepers forget that when it comes to their oil.
You, too, can burn used french-fry oil....and they will pay YOU to take it.(or you can get it free)
But, ya' gotta' have a diesel.
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