Kuwait's Al-Shall Economic Consultants warned OPEC states Saturday of "adverse consequences" from oil prices which have hit the highest level since Iraq invaded the emirate in 1990.
"The most serious consequence is a major obstruction for the current world economic growth. It will also open the door for the search of substitute energy sources," the specialists said in a weekly economic report.
Crude oil prices shot up to 36 dollars a barrel in New York Friday before closing at 35.92 dollars, as friction between Iraq and Kuwait drew a warning from the United States.
Light sweet crude was up nearly two dollars from Thursday's close of 34.07. Earlier in the day in London a barrel of North Sea Brent crude added 1.69 dollars to reach 33.98. Al-Shall warned that differences have started to appear between OPEC members with huge crude reserves which push for a reasonable price and those with limited reserves wanting to see prices go even higher.
It also doubted that huge oil revenues will be used to forge real economic reforms in oil-exporting countries. Al-Shall said another main challenge facing OPEC was the need to work out an effective mechanism to eliminate sharp price swings.
It however praised as "wise" a decision taken by OPEC members on September 10 to hike output by 800,000 barrels per day (bpd), saying it responds to pressures by consuming countries to raise production to help bring prices down. Kuwait's Oil Minister Sheikh Saud Nasser al-Sabah said Friday the output increase was a correct decision and it would achieve balance in the market.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com )