(COMTEX) B: Iraq Offer Pushes Oil Futures Down
B: Iraq Offer Pushes Oil Futures Down
OSAKA, Japan, Sep 17, 2002 (AP Online via COMTEX) -- Iraq's offer to readmit
U.N. weapons inspectors pushed crude oil futures sharply lower Tuesday and
likely will take some of the pressure off OPEC to raise production this week.
Light sweet crude oil for October delivery was down by $1.32 to $28.35 a barrel
early in the Asian business day in computer trading run by the New York
Mercantile Exchange.
The United States and other large oil importers have been alarmed to see prices
hovering near $30 a barrel, which some fear could harm the chances for an
economic recovery, but OPEC has been divided about whether it should agree
during a meeting on Thursday in Osaka to pump more.
The key OPEC player, Saudi Arabia, the world's largest producer of crude, hasn't
committed itself.
Analysts say the price has been inflated by $2 to $4 per barrel on a "war
premium" that developed on the belief President Bush could mount an attack on
Iraq to try to remove President Saddam Hussein from power.
That poses a potential threat to oil supplies, particularly if it were to stir
turmoil in the Middle East, although some in OPEC have indicated the group would
step in to quickly make up for any shortfall.
Although Washington dismissed Iraq's offer on the weapons inspectors as a
"tactical step," it alters the short-term scenario for OPEC.
The OPEC producers want oil to remain in a target range of $22 to $28 per barrel
and some have been reluctant to boost output to erase the war premium, fearing
that could eventually push prices far lower than OPEC wants.
OPEC Secretary-General Alvaro Silva Calderon was unwilling to be drawn into any
predictions about how the market will react to Iraq's more conciliatory stance.
"It is very fresh news," Silva said Tuesday, reiterating his view that the crude
oil market is adequately supplied at present. "We will just have to wait and see
the final impact it will have on oil prices."
By DIRK BEVERIDGE
AP Business Writer
Copyright 2002 Associated Press, All rights reserved
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APO Priority=r
APO Category=1310
KEYWORD: OSAKA, Japan
SUBJECT CODE: 1310
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