Oil prices were caught in a tug-of-war on Friday, September 21, between concerns about the possible impact of US retaliation on supply, on the one hand, and demand on the other. Prices spiked up after a huge explosion at a French chemical plant and a shoot-out at Amsterdam airport, which fueled concerns, apparently unfounded, of another wave of terrorist attacks.
Local police said in both cases that the tensions did not appear to be linked to terrorist attacks and prices fell back close to opening levels. Brent North Sea crude for November delivery was changing hands for $25.79 a barrel, against $25.92 on Thursday evening. New York October-dated light sweet crude futures eased 21 cents to $26.52 a barrel in early trade.
The explosion at the AZF petrochemical plant in Toulouse, southwest France, resulted in several casualties, but was probably an accident, police told AFP in Toulouse. The blast came just hours after shots were fired outside the departure hall of Amsterdam's Schiphol airport, in an incident police said stemmed from a personal dispute.
The incidents left nerves frayed in a market already on alert for a deterioration of global security after the September 11 attacks on the United States. But concerns about the impact on demand for crude in the deteriorating economic climate have to a large degree overshadowed supply concerns in recent days.
Traders were also looking ahead to a scheduled meeting of the Organization of Petroleum Exporting Countries (OPEC) next week in Vienna for more clues on how the oil-exporting club would act in the wake of the terror attacks.
OPEC has pledged to pump enough crude to world markets to maintain the stability of the market, easing concerns that Arab oil-producing nations might become embroiled in a wider conflict if US retaliation is fierce. But analysts were not expecting an output hike next week.
"Given concerns over demand, OPEC would be nuts to raise production," said Doug Leggate, an oil expert at Commerzbank. "We may see a gesture, but I'm not sure if this is the right time."
The OPEC basket price of seven crudes worldwide rose to $24.51 on Thursday from $24.29 on Wednesday, the cartel's OPECNA agency reported from Vienna. ― (AFP, London)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
