Oil stable as investors shrug at OPEC crude restraint bid
The price of oil remained stable on Monday October 22 as investors kept a close eye on efforts by producers of crude to forge some form of pact to put a floor under the market.
The price of a barrel of Brent North Sea crude for December delivery fell by $.17 to $21.18. New York's light sweet crude November contract closed Friday at $21.83 dollars, $.52.
Market players are watching closely efforts by the Organization of Petroleum Exporting Countries (OPEC) to produce some form of initiative to rescue prices, which have fallen more than 20 percent since last month's terrorist attacks on the United States.
OPEC wants rival exporters outside the 11-nation club to fall in line with measures of restraint to help prices, but the non-OPEC countries such as Norway and Russia have shown few signs of enthusiasm for such an idea.
Russia's oil chief Igor Yusufov said on Monday after talks with Hugo Chavez, president of OPEC member Venezuela, that Moscow had no plans for a cutback. "For the moment we are working to maintain the price range, and there is no question of reducing production," Yusufov said.
The London-based Center for Global Energy Studies (CGES) said attempts to persuade rival exporters to help, as they did when prices were as low as $10 a barrel in 1999, "seem unlikely to succeed."
In its monthly report, the center said this meant OPEC had few options to take effective action, and oil prices were likely to settle into a new, lower range as a result. The center said demand in industrialized countries had "collapsed" with total consumption in the fourth quarter of this year expected to be one million barrels per day lower than previously forecast before the events of September 11. It said OPEC faced an unenviable dilemma.
"It needs to cut output further if it is to keep oil prices within its target price range, but in doing so it will lose market share and further delay the global economic recovery that is needed to boost oil demand growth," the CGES said.
"Oil prices, however, have already fallen to a level that threatens the economies of oil producing countries -- especially Saudi Arabia, which requires an OPEC basket price of at least $20 a barrel to meet current expenditure. The OPEC basket price stood at $18.91 a barrel on Friday. — (AFP, London)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)