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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Bilow who wrote (7250)	10/24/2001 2:47:24 AM
From: Nadine Carroll	Read Replies (1) \| Respond to of 281500

In other words, "Moslem" doesn't have anything to do with whether peace is permanent or not. Egypt signed a peace treaty with Israel years ago, isn't it still operative? Barely, and the Islamic Fundamentalists consider its existence another proof of the corruption of the Mubarak regime. So perhaps your explanations work for classic Sunni Muslims, but not for the Wahabbis.

To: Bilow who wrote (7250)	10/24/2001 2:49:35 AM
From: stockman_scott	Respond to of 281500

Oil Prices Could Gush if Conflict Escalates By M. Corey Goldman ABCNEWS.com Wednesday October 24 12:52 AM EDT Conflict overseas usually means higher oil and gas prices at home. Perhaps it was memories of the past that led so many to initially believe oil prices would skyrocket in the wake of last month's terror attacks. After all, trouble in and around the Middle East usually means in no uncertain terms that oil prices - and gas prices - are going up. On the contrary, however, oil and gasoline prices have actually declined since Sept. 11 on expectations that fewer planes flying, fewer factories operating and a general drop in economic activity has and will continue to lower demand. The reason, analysts say, is because of what they call in the business oversupply . With reduced demand for oil at home and with the Organization of the Petroleum Exporting Countries holding production steady, there is more oil flowing right now than anyone needs, ensuring that prices — at least for the moment — will likely remain low. "Supply is not declining to balance the weakness in demand," said Fadel Gheit, analyst with Fahnstock & Company in New York. "Oversupply has caused a rapid deterioration in price. Those that are buying it are putting it into storage and demanding a discount to cover their holding costs. That all trickles down to consumers in one form or another. According to the American Automobile Association, the national average for a gallon of regular gasoline is currently $1.31, down from $1.54 a month ago and $1.56 last year. And it's been no secret that at least some airline ticket prices have dropped dramatically — partly as enticements to get consumers to fly and partly because fuel costs are lower. Prices Could Spike At least that's how it is at the moment. But there are growing rumblings among analysts, economists and politicians that, with war raging in Central Asia and with tensions mounting in the oil-rich Middle East, both oil and gasoline prices could be significantly on the rise in the months ahead. "It is quite feasible that we could see prices rise if conditions overseas escalate in some form," said Steven Pfiefer, an analyst with Merrill Lynch. Pfeifer and several other analysts are predicting higher oil prices in similar fashion to what the U.S. experienced during the 1970s, when restrained production from OPEC (news - web sites) and military and political volatility in the Middle East led to skyrocketing oil prices and fuel costs. The difference in opinion over whether those risks will play out has led to a wide divergence in where experts see oil prices going in the months ahead. Some see crude oil falling to between $18 and $20 a barrel as global demand continues to slide, while others see it jumping as high as $28 and $30 a barrel. So what are some of the potential risks? One would be an attack of some kind on Saudi Arabia's capacity to ship oil. Saudi Arabia exports some 8 million barrels a day, more than double what the rest of the world combined is capable of producing. According to Fahnstock's Gheit, a "nightmare scenario" would be a successful attack on the country's major oil-shipping ports, reducing output to just 2 million barrels a day. Middle East Tensions Another scenario would be an expansion of the U.S.-led campaign to eradicate terrorism. President Bush (news - web sites) and other political leaders have suggested that the war against terrorism could move beyond Afghanistan (news - web sites)'s borders to other countries. If any of those other countries are OPEC members or allies of OPEC members, the current decision to keep output steady could abruptly change, analysts say. Yet another possibility involves flaring tensions within Israel. On Friday, Israeli tanks and troops entered parts of Palestinian-ruled Bethlehem after a surge of violence following the killing of an Israeli cabinet minister. Oil experts warn that further instability in the region could also potentially compromise OPEC's willingness to support the U.S.-led war effort, prompting them to tighten supply. Those potential risks and many more are what's prompting some groups in the United States to search for other alternatives. "Higher oil prices will come if the situation gets way out of control," Gheit said. "The bottom line is that when you have excess supply, it's a buyer's market. And right now it's a buyers market. But there is always a risk that things can change." Some Slick Alternatives One such alternative is Russia. In addition to its support for the U.S. military campaign in Afghanistan, Russia is now offering its oil fields as a secure alternative to dependence on the turbulent Persian Gulf. Russia and the countries of the former Soviet Union together produce about one-tenth of the world's oil. While analysts point out that Russia currently can't export enough oil to replace Middle Eastern sources in the event of a major disruption, construction of new pipelines could solve that. Another alternative is to develop existing oil resources within the United States. The U.S. Energy Department, which is currently forecasting "weaker underlying support for oil prices than previously projected," is expected to unveil a report next week outlining the benefits of developing and expanding domestic oil reserves, including bumping up the strategic reserve. Part of Bush's plan to expand domestic reserves includes the controversial development plan involving Alaska's Arctic National Wildlife Refuge (news - web sites). "If the war on terrorism spreads to the Middle East, we'll see oil prices rise again," said Pfiefer. "While it may take a little while to work through excess supply, we could see a significant drop in supply if events over there heat up."