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To: seminole who wrote (74925)	9/27/2000 11:11:06 PM
From: Tomas	Read Replies (1) \| Respond to of 95453

Opec senses west can afford oil at Dollars 30 a barrel: Oil ministers may talk of lower prices, but finance ministers want the cash. Financial Times, September 28 Robert Corzine and Andy Webb-Vidal report from the Opec summit in Caracas: The cacophony of 11 national anthems played against the clatter of helicopters provided the musical background to the opening yesterday of only the second summit of the Organisation of Petroleum Exporting Countries. But it was the bright blue skies above Caracas that provided the lyrics of the unofficial theme song of the summit - "Happy days are here again, the skies above are clear again". For Opec's finance ministers, this year has seen nothing but happy days. Average oil prices for the bellwether Brent blend are running at more than Dollars 28 a barrel, a full Dollars 10 above the long-term average for the 1990s. This year total Opec oil export revenues are expected to to be almost Dollars 250bn, compared with Dollars 155bn last year and Dollars 110bn in 1998, the year in which the dark clouds of the last oil price collapse descended over the cartel. The over-arching political focus of the summit has been the crisis-like atmosphere in the industrialised world that has accompanied the latest oil price surge, and the underlying question of whether Opec is once again on a collision course with the west. But there is also a formidable battle of political wills taking place within the group between finance ministers and their oil and energy counterparts, more than a few of whom are privately alarmed at the sheer irrational exuberance that has characterised world oil markets this year but has done so much to replenish Opec coffers. The caution of the oil ministers was exemplified by Ali Rodriguez, Venezuela's oil minister and current Opec president, who earlier estimated that speculative froth represented as much as Dollars 8 of the last oil price surge to around Dollars 37 a barrel. But even though Opec oil ministers have generally adopted a cautionary and conciliatory tone of late, there are more than a few signs that their finance minister brethren may not entirely share such sentiments. "The people in the finance ministries are happy," said one senior oil official from a big Gulf Arab producer. "But people are so short-sighted, especially Opec people. Oil prices are simply too high." Compare that, however, with the view of the deputy finance minister from the same country: "They (Opec finance ministers) are happy when they receive their money and very unhappy when they don't." On the surface such a simplistic attitude might seem out of place in the high stakes game of setting global oil prices. But the finance ministers are not without more solid economic, political and even moral support. With much of the industrialised world still recording robust economic growth and personal incomes in key oil consuming countries such as the US continuing to rise, there is a sense within some Opec delegations that the industrialised world can afford oil prices around Dollars 30 a barrel or even more. Opec oil ministers say they would prefer to see average prices in the Dollars 22-Dollars 28 band. But their inability so far to manoeuvre prices into that range and keep them there has weakened their credibility, and strengthened the view that the cartel should simply maximise its current earnings, a view made all the more compelling by the shaky financial state of many Opec states. ...