Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Hot Button Questions:- Money, Banks, & the Economy -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (596)	3/31/2004 7:18:35 PM
From: maceng2	Read Replies (1) \| Respond to of 1417

OPEC Cut Expected to Send Oil Prices Higher news.scotsman.com The world’s major oil producing nations agreed today to cut production by 4% despite surging prices – a move that analysts said could drive crude oil prices even higher. The Organisation of Petroleum Exporting Countries, which pumps about a third of the world’s oil, will reduce its output ceiling by one million barrels a day from tomorrow. A recent surge in oil prices had led some of the group’s 11 members to suggest postponing the cut, but Opec’s most influential oil minister, Saudi Arabia’s Ali Naimi, prevailed in his effort to press ahead. The rise in crude prices has seen petrol prices climb to record levels in the United States – 25p a litre. Kuwaiti Oil Minister Ahmad Fahad Al-Ahmad Al-Sabah had earlier suggested delaying the cut but was among those who confirmed the group’s decision to trim its target to 23.5 million barrels per day starting tomorrow. Ministers from Algeria, Nigeria, Libya and Qatar also confirmed the agreement, which the representatives reached in private talks ahead of a formal meeting at Opec’s headquarters in Vienna. Opec had agreed last month to make the cut on April 1, but recent discomfort with rising prices in the United States and other importing countries had led some Opec members to reconsider. “We made decision to apply the Algiers decision. We’re going to meet again in June ... and at that time we’re going to review the market,” Algerian Oil Minister Chakib Khelil said. Opec was forced to balance consumers’ desire for lower oil prices with its own fears that swelling inventories and a seasonal lull in spring demand could cause prices to plunge. Most Opec members are taking advantage of the current high prices by pumping as much oil as they can. Excluding Iraq, which doesn’t participate in the group’s quota agreements, Opec is already exceeding its target by an estimated 1.5 million barrels. If individual members have the discipline to reduce their actual output in line with their lower target, crude prices now could reach 40 US dollars (£21.75) a barrel, said Leo Drollas, chief economist of the London-based Centre for Global Energy Studies. That could damage the global economy and the long-term demand for oil, other analysts warned. In the United States, the high oil and petrol prices have become an issue in the presidential campaign. Democratic contender John Kerry said that as president he would stop pumping oil into the nation’s emergency stockpile until prices fell and would pressure Opec to provide more oil. A spokesman for President George Bush blamed high prices on the failure of Congress to approve Bush’s energy proposals in 2001, and the Bush campaign started an advert accusing Kerry of favouring higher petrol taxes.