- The Washington Times - Saturday, September 21, 2002

OSAKA, Japan (AP) OPEC's decision to hold crude output steady with prices at almost $30 per barrel got a chilly reception yesterday from major oil-consuming nations that worry their economies will suffer.
The West had called for the Organization of the Petroleum Exporting Countries to put more oil on the market and provide some relief from prices that have soared recently amid fears President Bush will wage war on Iraq to try to topple President Saddam Hussein, possibly causing supply disruptions in the Middle East.
But OPEC ministers, who say the market is now adequately supplied, decided in a meeting here Thursday to roll over their official production ceiling of 21.7 million barrels per day, which is being inflated by up to 2 million barrels a day as some members cheat by pumping over their stated limit.
The head of the International Energy Agency, a watchdog group that represents Western consuming nations, predicted yesterday that OPEC's decision will stir up volatility in the oil markets, and added it won't do anything to assist the global economy.
IEA Executive Chairman Robert Priddle said that OPEC's stance on production was "not helpful" and said the world economy might suffer from a "situation where the market isn't being liberally supplied but there is recovering economic demand."
Despite such concerns that the consumers have already been voicing, oil traders seemed largely unmoved by the outcome of the latest OPEC meeting.
Light sweet crude oil to be delivered in October fell 1 cent a barrel to close at 29.49 yesterday on the New York Mercantile Exchange.
OPEC ministers say supply is adequate, and they foresee only moderate economic growth that is unlikely to do much about demand in the near term. Many in OPEC believe oil prices have been lifted by $2 to $4 because of a "war premium" built on fears an American attack on Iraq not any imbalance between supply and demand.
"We won't act if prices are up based on political reasons," Qatari Oil Minister Abdullah bin Hamad Attiyah said yesterday in defense of OPEC's decision.
OPEC's most important player, Saudi Oil Minister Ali Naimi, said Thursday that oil is now priced at a good level for buyers and sellers alike, adding he would like to see crude average $25 per barrel, a "magic number" slightly below the current level but more expensive than oil has been most of this year.
Mr. Priddle, the OPEC ministers and other leading energy figures from around the world are in Osaka for a global conference between producing and consuming nations that opens today.
Members of OPEC are Algeria, Indonesia, Iran, Iraq, Libya, Kuwait, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times is switching its third-party commenting system from Disqus to Spot.IM. You will need to either create an account with Spot.im or if you wish to use your Disqus account look under the Conversation for the link "Have a Disqus Account?". Please read our Comment Policy before commenting.


Click to Read More and View Comments

Click to Hide