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To: John Hunt who wrote (23988)12/8/1998 10:57:00 AM
From: Giraffe  Respond to of 117029
 
OIL: Saudi Arabia warns 'boom days are gone'

By Our Summaries Staff

Oil superpower Saudi Arabia has warned Gulf producers that the current market difficulties had given way to a crisis and the "boom days" of higher prices had gone forever. The message came as the price of Brent oil futures fell below $10 a barrel for the first time in the contract's history.

The annual meeting of the Gulf Co-operation Council, a gathering of the six Gulf Arab producers, heard Crown Prince Abdullah, the heir apparent to King Fahd, appeal for the industry to face up to the reality of the situation. "It is useful for us, governments and people, to remind ourselves that the boom days are gone and will not come back."

There was a call for the development of closer economic ties within the region, with Prince Abdullah suggesting a customs union to be set up within a year. The GCC countries have failed to agree on this step since 1983, although such an accord would auger well for a common market to be established. It would then be easier to negotiate deals with other trade blocs.

The 11-member Organisation of Petroleum Exporting Countries, of which Saudi Arabia is the dominant nation, failed in a meeting last month to agree any new actions to halt the continued slide in the price of oil despite two rounds of production cuts during 1998.

The prince said that oil producers should "not hesitate in taking any other measure dictated by (our) interest if the previous ones did not lead to the desired results.

"We must not stand idle while watching the main source of our revenues subjected to this big shake-up as a result of the imbalance that happened to the supply and demand in the oil market."

The strength of the appeal from Prince Abdullah, made in unusually frank terms, comes amid wide-spread pessimism in the oil market following the inconclusive OPEC gathering.

The GCC meeting, which began on Monday, continues in closed session today and a statement is expected to be issued on Wednesday.




To: John Hunt who wrote (23988)12/8/1998 8:53:00 PM
From: John Hunt  Read Replies (2) | Respond to of 117029
 
Global Intelligence Update Red Alert December 9, 1998

U.S./North Korean Confrontation Causing Rifts in Tokyo and Seoul

According to a December 5 report in the Japanese newspaper Sankei Shimbun, during their November 20 summit, U.S. President Bill Clinton told Japanese Prime Minister Keizo Obuchi that the U.S. is concerned about North Korea's possible nuclear weapons capability. According to an anonymous source cited by the newspaper, Clinton told Obuchi, "We have to consider military action against the DPRK's [North Korea's] threat," unless Pyongyang submits to inspection of its underground nuclear facilities. The paper claimed that recent high-level meetings between U.S. and Japanese officials have repeatedly featured U.S. warnings that Washington is prepared to launch air strikes if Pyongyang does not give in. Obuchi reportedly responded to Clinton that he hoped that North Korea would agree to inspections. He also reportedly stressed that Washington, Tokyo, and Seoul should cooperate in dealing with Pyongyang and that he hoped the U.S. would not unilaterally adopt a hard line on North Korea.

South Korean President Kim Dae Jung has also urged the U.S. to ease its confrontation with North Korea. On December 7 Kim reportedly told William Perry, the U.S. North Korea Policy Coordinator and Special Advisor to the President, "I hope that North Korean-US relations will be normalized... I think that now is the time to think about the issue of lifting economic sanctions on North Korea." Kim also suggested that the U.S. should agree to North Korea's demand for $300 million in compensation for opening its facilities to inspection, as part of what Kim called a "package deal" to settle all outstanding problems with North Korea.

The views expressed by Obuchi and Kim, ostensibly the United States' staunchest allies in the region, are in this case clearly at odds with the current U.S. policy on North Korea. Kim is devoted to achieving peaceful coexistence with the North, an extremely unpopular position among his many opponents in politics and the South Korean military. Kim is attempting to finesse intertwined domestic and foreign policy dilemmas, and does not welcome the U.S.'s single issue, black-and-white agenda. Obuchi is also dealing with clashing foreign and domestic policy issues, attempting to take a strong stand against North Korean missile development and to expand the role of the Japanese Self Defense forces, while wriggling free of U.S. economic, political, and military leadership. Yet while the Japanese and South Korean leaders are apparently leery of a U.S. confrontation with North Korea, it would appear that elements within their governments are not.

Japan's government television network reported on December 8 that North Korea has begun building three underground facilities that could be used to launch nuclear-armed missiles. According to NHK television, the information on the underground launch sites in northern North Korea came from U.S. spy satellites. The report was apparently leaked from the Japanese Defense Agency to the Japanese media, although the Agency's Director General, Hosei Norota, denied any knowledge of the report.

Also on December 8, at a unification-related meeting, the South Korean Defense Ministry issued a report entitled "Recent North Korean military Movement," detailing Pyongyang's war preparations. The report alleged that North Korea has more than 8,200 underground sites, covering a combined length of 5,000,047 kilometers. According to the report, North Korea has 180 armament factories located underground, conducts regular war mobilization exercises, and has sufficient food and war materiel stored to conduct a war for at least three months without any additional supplies. The report also claims that 60 percent of North Korean troops have been deployed south of the Pyongyang-Wonsan line, and that defensive positions have been set up along North Korea's coasts.

Simultaneous reports appearing in both South Korea and Japan, both at odds with their governments' policies of constructive engagement with North Korea and supportive of U.S. warnings, cannot but suggest U.S. involvement. That is particularly the case in Japan, where sensitive U.S. satellite imagery or reports generated from that imagery apparently fell into the hands of the Japanese media. If this report is true, the information was most likely deliberately leaked by Japanese intelligence, who in turn received it from U.S. intelligence agencies. While the leak could have occurred without U.S. knowledge or approval, the impact of the report suggests an attempt by the U.S., possibly in conjunction with Japanese intelligence, to garner support for U.S. policy on North Korea.

However, while the U.S. is evidently attempting to win support for its desire to use military force against North Korea, it is doing so a the risk of undermining Kim and Obuchi, not only on this issue but fundamentally. Obuchi is attempting to balance rising Japanese nationalism and anti-Americanism, while solving Japan's economic crisis and taking on a leadership role in Asia. Obuchi is also attempting to lift many of the constraints on Japan's military, against opposition from within and outside Japan. A U.S. military conflict with North Korea, with a high potential to rapidly escalate, threatens to throw Japan into an unpopular support role for an equally unpopular heightened U.S. military presence. In South Korea, where former dissident Kim is battling the entrenched interests of his former persecutors to forge a new policy toward the North, U.S. policy is empowering that opposition.

And the fact that the U.S. is strong-arming what should be U.S. allies in the region into untenable positions is not the most critical aspect of this brewing crisis. The biggest problem for the U.S., as with its policy on Iraq, is that Washington is building a crisis and framing a response with no concept of an end-game. North Korea has already weathered years of sanctions. Pyongyang is unlikely to throw open the country to inspections at the mere threat of violence. At the same time, North Korea is, if anything, more impervious to U.S. cruise missile attacks than is Iraq. Invading North Korea would be a bloody nightmare. To top it all off, North Korea promises an even harsher response to U.S. actions from China and Russia, with which it shares borders.

Still, Washington and its allies are banging the drum. Unless Washington takes a moment to consider just how it plans to extract the U.S. from what promises to be a protracted and pointless conflict with North Korea -- one that promises to make Washington's Iraq policy look productive -- Clinton will soon be forced to back his words with actions, or let the DPRK call his bluff. Neither option is attractive.

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Slick & Madeline Allbright are going to get us into World War III. Anyone think this pair has a clue between them? :-((