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Strategies & Market Trends : Natural Resource Stocks -- Ignore unavailable to you. Want to Upgrade?

To: isopatch who wrote (11533)	5/24/2004 2:33:43 AM
From: elmatador	Read Replies (1) \| Respond to of 108765

How can cartel that exists to control production to boost prices be persuaded to increase production to cut prices?] G8 calls on Opec to boost oil output By Anna Fifield and Christopher Swann in New York and Kevin,Morrison and Javier Blas in Amsterdam Financial Times; May 24, 2004 Finance ministers from the leading developed countries yesterday warned of the damage that high oil prices could inflict on the world economy. They urged oil producers "to provide adequate supplies to ensure that world oil prices return to levels consistent with lasting global economic prosperity and stability". The warning was issued in a statement after the meeting in New York of finance ministers from the Group of Eight leading economies. It came as Saudi Arabia courted a split within the Organisation of Petroleum Exporting Countries by proposing to push ahead with a plan to increase its own output to near full capacity of about 10m barrels a day, in the teeth of opposition from many cartel's members. ELMAT's NOTE: That's in line with the help they promised to the Bush campaign. Hey, it is not only the Bureau of Labor Statistics and Greenspan that are requested to help! Analysts said yesterday the Saudi move would temporarily cool oil prices but warned that oil was unlikely to fall by a significant margin from its current level of about $40 a barrel. With many Opec members already producing at full capacity, most of the world's spare capacity is in Saudi Arabia. Its plan to open the taps leaves the world without any cushion of unused capacity should supplies be interrupted because of an accident or terrorism. Rafael Ramirez, Venezuela's energy minister, warned yesterday: "The history of cheap oil may have ended." ELMAT's NOTE: If this is really the case then 3) is going to happen see: Message 20143603 While producers insist consumers need to curb the near-record growth in demand, oil-consuming countries have stepped up their rhetoric in recent weeks on the potentially detrimental impact of oil prices on the global recovery. Speaking at the G8 meeting last night, John Snow, US treasury secretary, said: "It is vital that oil producers provide adequate supplies to ensure that prices are at levels that foster strong global economic growth. " ELMAT's NOTE: What was mada of the rhethoric that the market is have to decide the prices of goods and services? Although most Opec members are already producing at full capacity, the finance ministers urged the cartel to increase output. "Lower oil prices would be of benefit to the whole world economy," they said. Nicholas Sarkozy, French finance minister, pledged to bring diplomatic pressure on the cartel. "We decided that each of us would make contact with those [countries] with which they are most easily in touch to try to obtain an increase in production", he said in New York. "Is there a risk [to the economy]? . . . it's undeniable." In a bid to talk down oil prices, Ali Al-Naimi, Saudi oil minister, told an International Energy Agency meeting in Amsterdam that the Opec cartel should increase its quota by between 2.3m and 2.5m barrels a day from the current ceiling of 23.5m b/d. Saudi Arabia first suggested a rise of 1.5mb/d last week, only to propose 2mb/d on Friday and yesterday come up with the third figure. Although Opec members had been close to agreeing on Saudi's original proposal, unity broke down on Friday when Mr Naimi said 1.5m b/d was not enough. It will be formally discussed on June 3.