World Tribune.com
Blanchard

Oil prices highest since Gulf War

Special to World Tribune.com
MIDDLE EAST NEWSLINE
Wednesday, September 20, 2000

LONDON — Oil prices have reached a new high.

In London, the price of benchmark Brent North Sea crude oil climbed to $34.65 a barrel. Monday's price was the highest since the 1990 Gulf War. At the time, oil prices topped $40 a barrel.

In the United States, oil prices reached $37 a barrel.

The oil prices have intensified protests around Europe. Truckers in Sweden, Spain and Finland blocked roads to fuel depots, harbors and rail terminals. On Tuesday, Israeli truckers joined the protest.

OPEC officials in Vienna said cartel members could decide to increase production by an additional 500,000 barrels per day during their next meeting in October.

Still, oil analysts expect the price of oil to remain high into early next year. The Center for Global Energy Studies said OPEC's decision to raise production by 800,000 barrels per day came too late to lower prices.

"The timing and size of the required output cut will be determined by the severity of the winter, but the need to reduce output will be unavoidable," the center, chaired by former Saudi Oil Minister Zaki Yamani, said.

The Nicosia-based Middle East Economic Survey said OPEC oil production in August increased by 820,000 barrels per day from the output during the previous month. The biggest increase came from Saudi Arabia and Iraq.

The move increased oil output by the 11-member group to 28.92 million barrels per day. Iraq increased oil production by 560,000 barrels per day while Riyad boosted output by 400,000 barrels.

"The rise in output was almost entirely attributable to Saudi Arabia and Iraq, while most of the other countries maintained their production at or near capacity levels, as in July," the survey said.

For his part, Iraqi President Saddam Hussein said Western leaders have been alarmed by rising demand for oil. "The amount of oil they need has started to alarm them to an extent that they do not want to say how much," Saddam was reported by Iraqi newspapers as saying. "That means there is concern over the amount of oil existing in the world."

Only Iran was reported to have decreased oil production. The survey said it did not know why Iran reduced production from 3.72 million barrels per day in July to 3.54 million in August.

The survey said the OPEC decision on Sept. 10 to increase production by 800,000 barrels per day would not be fulfilled. The output hike is likely to be in the vicinity of 600,000 as most of the cartel's members cannot increase capacity.

Wednesday, September 20, 2000


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