Opec defies western pressure
Heather Stewart
Friday September 20, 2002
The Guardian
guardian.co.uk
Oil prices rose to near $30 a barrel yesterday after Opec defied
political pressure from the west to turn up production.
The oil producers' cartel, meeting in Japan, announced it would
wait and see before taking action to bring down soaring prices,
despite the sharp spike caused by military tension in the Middle
East.
"Prices are OK for producers and consumers," said the Saudi oil
minister, Ali al-Naimi, announcing that Opec had opted to leave
production quotas unchanged. "We had to take account of many
uncertainties, including Iraq."
Traders disappointed at Opec's failure to act had pushed up the
price of Brent crude by 15 cents to $28.47 a barrel by
mid-afternoon - about 50 cents short of the one-year highs hit
last week before Saddam Hussein's offer to readmit UN
inspectors.
Fears that military action in the Middle East could disrupt
supplies has sent the oil price soaring as Washington has
ratcheted up its rhetoric on "regime change" in Iraq.
With the higher cost of oil increasing the burden on the global
economy, Brussels expressed disappointment yesterday that
Opec had opted not to increase supplies.
"As we consider that the normal price is $20 a barrel, it is clear
that the [European] commission would rather have a production
rise which allows a fall in prices," said Gilles Gantelet,
spokesman for energy commissioner Loyala de Palacio.
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