Oil prices persisted close to 10-year high points on Tuesday, prompting fresh calls for action from OPEC to cool down a market that has already threatened Europe with social and industrial unrest and inflation.
A day after setting a new decade-long record of 32.80 dollars a barrel in London, the price of a barrel of North Sea Brent had eased slightly, but the benchmark crude was still fetching 32.50 dollars in afternoon trading.
Such prices have not been seen since oil markets were rattled by Iraq's invasion of Kuwait in 1990, and have led to urgent calls on the Organization of Petroleum Exporting Countries (OPEC) to come up with something exceptional at a ministerial-level meeting this Sunday.
The European Commission said the steep cost of oil was "unacceptable" and added that it was working on an action plan to counter the recent market moves.
The oil price "is at an unacceptable level not only for the importer countries ... but also for the entire world economy", said a spokesman for the energy commissioner, Loyola de Palacio.
France's embattled transport minister, Jean-Claude Gayssot added that European countries and the European Central Bank "should express its determination to hold talks with the OPEC countries and tell them 'you cannot do just anything'."
But analysts now hold that even if the 11 nations in OPEC send calming signals at their Vienna summit and start to pump more oil, the damage to industrial economies has already been done.
US reserves have dwindled dramatically, threatening shortages, and prices will take a lot of coaxing down, they say.
"We had expected for a while that OPEC would raise its production, but it is not going to be enough," said Peter Young, an analyst with the Royal Bank of Scotland. "I think there is a risk of shortgage of fuel for this winter."
Oil prices have surged upwards ever since OPEC decided last year to slash output to rescue prices from record low points of less than 10 dollars a barrel.
But while low oil prices then threatened the economies of major exporters, high prices now have started to filter through in inflationary worries in industrial countries, not to mention the social and industrial unrest staged by workers and motorists angry at skyrocketing fuel prices.
France has borne the brunt of the protests, with the most obvious manifestations of discontent emerging during last week's blockade by fishermen that gridlocked cross-Channel ferry traffic for more than 24 hours.
Fuming truckers, farmers and taxi drivers have picked up where the fishermen left off, holding much of the country's oil depots under siege, and forcing the authorities to introduce rationing.
But the knock-on effects of high fuel prices have also been felt further afield. Spain has promised a package of measures to help its agriculture sector face up to rising prices, while Belgium's main freight drivers federation was planning a weekend protest to demand financial compensation to offset high fuel prices.
In Britain, the issue of high petrol prices in a nation of avid motorists has emerged as a nagging political headache for the government.
Euro-zone monetary chiefs meanwhile are expressing ever greater concern about oil-fuelled inflation. Last week's interest rate increase by 25 basis points to 4.5 percent was imposed to try to damp down rising consumer prices which the European Central Bank said were "largely influenced by oil prices".—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)
