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To: bill who wrote (1968)	11/16/2001 6:13:55 AM
From: David Alon	Read Replies (1) \| Respond to of 11633

Warning on oil price as Russia-Opec dispute grows By David Buchan in Vienna and Andrew Jack in Moscow Published: November 15 2001 20:11 \| Last Updated: November 16 2001 06:56 Kuwait warned oil prices could tumble to as little as $10 a barrel as an acrimonious dispute between the Organisation of Petroleum Exporting Countries and Russia over production cuts on Thursday pushed prices to their lowest levels since mid-1999. The price of crude fell in New York to $17.90 a barrel after Adel Khalid al-Sabeeh, Kuwait's oil minister, said he would "not be surprised if the oil price dropped to $10." That would "be a hard hit for all of us, and even harder for those with a higher cost of production," he said. Opec producers in the Middle East can pump oil more cheaply than non-Opec countries, including Russia, which is a particular target for the Opec action. He was speaking a day after Opec ministers in Vienna said they were ready to take another 1.5m barrels a day of their own oil off the glutted world market but only "subject to a firm commitment" by non-Opec producers to show solidarity by cutting 500,000 b/d of their own output. Kuwait, with Saudi Arabia and Iran, is a prime mover behind Opec's brinkmanship towards non-Opec producers. But Russia, the main target of Opec's stand, refused to budge on Thursday night. Mikhail Kasyanov, the Russian prime minister, said during a visit to Spain that his country would not agree to any significant extra reduction in oil exports because it would jeopardise its policy of fair oil prices and steady supplies to Europe. "We are not going to at any time reduce production on a big scale; it's impossible," Mr Kasyanov said. Ali Naimi, Saudi Arabia's oil minister, claimed Opec was not pursuing a war over price or market share, but rather launching "an appeal to all major oil producers to manage a market at a reasonable level." This was necessary he said, because of the "abnormal conditions" created by the September 11 terrorist attacks' impact on the world economy and oil markets. Oil analysts said that while Opec might be deliberately engaging in a price war in the terms of undercutting non-Opec producers, or dumping Opec oil on the market, its action amounted to the same tactic. The cartel evidently calculates, or hopes, lower prices would cause non-Opec producers to crack first, and to agree to the production cuts Opec is demanding of them. Opec ministers said their Vienna declaration made it clear that Opec, which has already reduced its quotas by 3.5m b/d this year, would not go on cutting alone. Robert Priddle, head of the International Energy Agency in Paris, said on Thursday a "sustained collapse" of oil prices was unlikely because of "lingering risks" to supply. Following September 11, oil price jumped to $31, but prices then fell as the US confined its campaign to Afghanistan. news.ft.com