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To: patron_anejo_por_favor who wrote (28563)	10/16/2000 11:25:01 AM
From: LLCF	Read Replies (2) \| Respond to of 436258

All is well with oil supplies: Oil Will Flow, Saudis Pledge Compiled by Our Staff From Dispatches ABU DHABI, United Arab Emirates - Saudi Arabia, the world's largest oil producer, assured consumer nations Sunday that the current Arab-Israeli crisis would not disrupt oil supplies from the Middle East. ''Gulf oil producers want to send a message to the world that there will be no problem with the security of oil supplies,'' Saudi Arabia's oil minister, Ali Naimi, said upon arriving in the Gulf emirate of Abu Dhabi for an oil conference. He said Saudi Arabia would increase output by itself if its fellow members of the Organization of Petroleum Exporting Countries failed to take such a step. But he said OPEC preferred to act in unison. No country in the Middle East, which has more than one-third of the world's oil reserves, has yet said it plans to disrupt supplies because of the crisis, and oil officials in the Gulf have reported no change in export levels. Still, at a time of limited spare output capacity, any renewed tension in the region poses a risk to supply that could keep prices high, analysts say. Few traders and analysts fear a repeat of the 1973 Arab oil embargo against the West after the Middle East war that year, which more than tripled world oil prices. But oil prices touched a high of $36.06 a barrel last week before falling back slightly, and there is concern that supplies could be at risk if Arab producers seek to retaliate against Israel and the West by cutting exports. Saudi Arabia, the world's top oil exporter and producer, has an extra capacity of some 2 million barrels a day. Besides the United Arab Emirates, which has additional capacity of 500,000 barrels, all other OPEC producers are believed to be pumping at maximum levels. Mr. Naimi said that if prices remained above $28 a barrel, the oil cartel could decide to raise production before its next meeting in November. Qatar, which is also an OPEC member, supported Saudi Arabia's assurance over oil supplies. ''The price hike last week was based on psychological fears and not based on fundamentals,'' Qatar's oil minister, Abdullah Attiyah, said. Mr. Naimi agreed that such high prices were not justified by fundamentals. ''We believe that supply is more than demand today,'' he said, but added, ''If there is demand, OPEC and other producing countries are more than ready to give the market what it needs.'' He said, however, that he was ''seriously concerned'' that oil prices could collapse in the second quarter of next year because of the current 2 million-barrel-a-day increase in global inventories. ''Eventually, inventories are going to rise, and we may have to reverse our action,'' he said. The United States has called on OPEC to increase supplies to reduce oil prices, which have hovered near 10-year highs for much of the past six months and threaten to derail world economic growth. DAK