LET THE MARKET DECIDE FOR OIL PRICES, IRAN TOLD OPEC
LONDON 30 Dec. (IPS) Iran has told the Organisation of Petroleum Exporting Countries that it would object to any increase of the cartel’s overall output aimed at easing the nervous oil market.
Crude prices fell back 4 per cent on Monday as the Vienna-based Organisation indicated its readiness to increase its output according to the mechanism which calls for adjusting to the markets in case the prices for oil stay above or under a high of 28 or bellow 22 US Dollars during a consecutive period of 20 working days.
Nasir Shirkhani, an Iranian oil analyst in London said prices would remain uncertain until Washington spells out clearly what are its plans for Iraq in the one hand and on the other the oil strike in Venezuela, already in its first month continue.
In London, Brent crude ended down 50 cents at US$29.66 a barrel in a shortened session while the US light crude futures in New York lowered to US$31.40 a barrel after an early peak of US$33.65.
"Prices would keep going further up as strike continue in Venezuela and the D-Day for America attacking Baghdad, believed to be somewhere in the third quarter of January next, approaches", Mr. Shirkhani explained.
Hans Blix, the Swedish Head of United Nations Arms inspectors is expected to submit his report on the progress of inspections to the UN’s Security Council on 27 of January 2003
President George W. Bush ordered more US troops and weapons to the Persian Gulf in preparation for a possible war against Baghdad.
Prices slid as a senior delegate from a member of the 11-members Organisation told the British news agency Reuters that OPEC is sure to raise oil output quotas by at least 500,000 barrels per day (bpd) unless prices drop heavily in the next two weeks, which Mr. Shirkhani and other oil experts said is unlikely.
"The 500,000 barrels a day is sure. More than that is subject to ministerial consultations which are already under way" Reuters quoted the unidentified delegate.
OPEC, which controls two-thirds of world crude exports, has pledged to balance supply shortfall due to the strike in Venezuela, the cartel's third biggest producer.
So far ministers have said there are no signs of any real shortage.
OPEC’s basket jumped to US$31.06 Friday, the ninth day the reference price was above the target band. Unless prices drop sharply, the 20-day target for the mechanism could be triggered in mid-January.
Apprehending pressures from Washington on Saudi Arabia, world’s largest single oil supplier to make amend in case oil prices continue rising, Tehran has told OPEC members that they should not make statements that would cause a fall in the prices and let the market to decide.
OPEC has increased production by 1.3 million bpd to 23 million bpd, but analysts say the actual output is above 24 millions bpd.
Mr. Shirkhani said high oil prices would certainly have a negative impact on the economies of the world’s major industrial nations that are already at pain to recover.
Oil has raised more than US$5 in December and prices are now more than US$10 higher than at the start of 2002. ENDS OIL AND OPEC 301202