The president of the Organization of Petroleum Exporting Countries (OPEC) said on Wednesday, September 12, that the cartel would seek to guarantee a stable oil market and meet demand in the wake of the attacks in the United States.
"The member countries of OPEC are for the stabilization of the oil market. The organization is working to satisfy all demand on the market," Algeria's Chakib Khelil was quoted as saying by the APS agency.
He also asserted that the grouping would stick to maintaining a target price of $25 per barrel. The price of oil fell on Wednesday, but traders were on alert for any US retaliation amid concerns that Gulf Arab producer nations might become embroiled in a wider conflict.
The price of Brent North Sea crude for October delivery fell 84 US cents a barrel to $28.22 in late trade in London. Brent crude prices had spiked above $31 on Tuesday in the aftermath of the devastating attacks on the US World Trade Center and the Pentagon. The US oil market was not open when news broke about the attacks.
The Organization of Petroleum Exporting Countries (OPEC) was quick to pledge that it would guarantee sufficient oil supplies to stabilize oil prices. "All member countries remain committed to continuing their policy of strengthening market stability and ensuring that sufficient supplies are available to satisfy market needs," OPEC General Secretary Ali Rodriguez said in a statement issued in Vienna.
He categorically denied suggestions that some of the organization's members could use oil as a weapon, OPEC's news agency, OPECNA, reported. But that was the concern lurking at the back of the minds of traders on Wednesday. Previous crises that pit Western oil importers against Arab crude producers have resulted in sharp spikes in the oil price, as witnessed in 1973-4, 1990 and again last autumn.
"What happens next on this market is just going to be what happens with what the Americans decide to do," said a trader with ABN Amro, Terry Wilson. Prudential Bache broker Christopher Bellew played down concerns about any disruption to crude supplies.
Bellew said that there was a question mark hanging over the impact of the attacks on the global economy and demand for oil. "The consensus of opinion is that there is at the moment no threat to oil supplies," he told AFP.
"But there is a strong likelihood of this action deepening and hastening the economic recession and therefore leading to lower demand for oil in fact. In the longer term it may be somewhat bearish for oil if the recession is going to deepen and demand for oil is going to be reduced."
Lawrence Eagles, an oil expert with the GNI brokerage, said that the spike in crude prices on Tuesday had been a knee-jerk reaction to the news, but not an illogical one. "The scale of the disaster was such that everyone expected a response from the US," he wrote in a research note.
"It was a logical conclusion that this could perhaps be against Palestinian terrorists, which may bring about the ire of the rest of the Arab world, or against a country that is known to sponsor terrorism," Eagles said. "It was therefore logical to assume that, however small the probability, there is a chance that the security of oil supplies may be affected by the attack." ― (AFP, Algiers, London)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
