War fears fuel oil price

OIL & GAS

OIL prices gyrated above $30 as Middle East violence raged and hardliners urged Arabs to consider cutting energy lifelines to Israels Western allies.

Benchmark Brent crude was 16 cents firmer at $30.90 a barrel. US light crude for November was 36 cents higher at $33.27. Second month December was 35 cents better at $32.25.

The market, already worried by low US petroleum stockpiles at the onset of winter, remains nervous over Palestinian-Israeli killings and the potential for wider Middle East conflict.

"The situation clearly justifies a premium on the price of oil," said Lawrence Eagles of brokers GNI.

Arab leftist and hardline Islamic groups meeting in Cairo urged Arab leaders to cut diplomatic relations with Israel and use their "oil weapon" to support the Palestinian uprising.

Many are urging oil-rich Muslim states to allocate some of their oil revenues to support the Palestinian uprising.

However Kuwaiti foreign minister Sheikh Sabah al-Ahmad Sabah said it would not be in Arabs interests to stop oil exports, adding such a move would hurt Arabs more than others.

With prices levels deemed negative for world economic growth, eyes are now focusing on the Organisation of the Petroleum Exporting Countries (OPEC) and a policy-making meeting it holds on November 12. Some in OPEC have said the cartel could boost output in late October by choosing to let an informally-agreed price mechanism operate automatically rather than wait for the November meeting.

The mechanism agreed in March stipulates an output hike of half a million bpd if prices for an OPEC basket of crudes held above the upper limit of a 22-28 band for 20 business days.

On Thursday, the basket price stood at 30.52 a barrel and the 20 days would expire on October 27 if prices stay high.

The prospect of unusually cold weather in the northern hemisphere winter and a possible interruption in Iraqi crude exports at the end of the current phase of its UN humanitarian oil for food exchange could push prices higher.

http://www.thescotsman.co.uk/business.cfm?id=TS00169006&d=Business&c=Business&s=0&keyword=the

-- Martin Thompson (mthom1927@aol.com), October 20, 2000

Answers

The term "oil weapon" seems to popping up a lot recently.

-- Martin Thompson (mthom1927@aol.com), October 20, 2000.

So many of these oil stories are beginning to sound the same - day after day, week after week, month after month. Only deviation is different words to describe.

I wish something different would happen.

-- Loner (loner@bigfoot.com), October 20, 2000.

I try not to just post oil stories, but there are more of them than anything else.

-- Martin Thompson (mthom1927@aol.com), October 21, 2000.

I'm not complaining about the oil stories, Martin. I read them all, hoping that, between the lines, something truly new will develop. It's just that the tired sameness of these stories haven't revealed anything exciting. Yet. Keep posting them. I'll keep reading them. And, I'll keep hoping for that discovery, which will, inevitably, happen.

-- Loner (loner@bigfoot.com), October 21, 2000.

I agree 100 percent. I skip over probably 90 percent looking for something that is new. It is amazing how many different slants there are on one new event. I kind of look at it as putting together a puzzle. a piece here a piece there.

-- Martin Thompson (mthom1927@aol.com), October 21, 2000.

Keep posting them, Martin. I, too, am looking for different stories, or at least for a different slant. The oil stories do appear to have strong similarities, worldwide.

-- Rachel Gibson (rgibson@hotmail.com), October 21, 2000.