7-Sep-2000 1:26:31 PM 07 Sep 2000 07:55:10 LONDON, Sept 7 (AFP) - Oil prices scaled new peaks on Thursday morning, soaring to 34.50 dollars a barrel, amid growing scepticism that OPEC will, or can, increase output enough to cool an overheating market. The price of North Sea Brent reference crude for October delivery spiked upwards from an opening value of 34.35 dollars, before easing back to 34.20 dollars by late morning. Oil prices have now more than tripled in the past 18 months, topping levels not seen since the 1990 Gulf war. The surge in prices has threatened inflation in industrialised and developing nations across the world, and prompted stern requests from Europe and the United States for the Organisation of Petroleum Exporting Countries (OPEC) to pump more crude to the market. Asian nations joined the chorus of concern on Thursday, when officials from the 21-nation APEC grouping warned that rising energy prices could trigger inflation and hamper the recovery of countries hurt in the 1997 regional economic crisis. Europe, suffering from widespread protests over soaring fuel prices, has already called on OPEC to take action. The United States added its voice late on Wednesday, calling for "reasonable" oil prices. "We have made clear to OPEC that we think there needs to be a balance between producing countries and consuming countries so that we can see oil at a fair price and meet the global demand," he added. But the 11 OPEC nations, due to discuss output quotas at a Vienna meeting on Sunday, may have neither the political will nor the industrial capacity to increase output sufficiently to cool the market, analysts said here Thursday. Top Venezuelan oil officials have said as much. Venezuelan oil minister and OPEC president Ali Rodriguez has warned that output increases alone would not bring prices down, while Hector Ciavaldini, president of state-run company Petroleos de Venezuela, said in New York that his government saw no need for increased OPEC production. "There is a balance in offer and demand and we are surprised that prices go high," Ciavaldini said. Analysts have noted that most OPEC countries are already producing at full capacity, and in any case feel strongly that they should bear no responsibility for prices. Only Saudi Arabia, Kuwait and the United Arab Emirates have spare capacity, and the other eight countries are expected to dig in for fear that production increases will bring down prices, and lose them revenue as well as market share. "I think OPEC can increase output, but whether they will is another matter, " said Philip Oxley, an oil market analyst with Credit Lyonnais Rouse. "Smaller countries which can''t produce much more are worried that they will lose out from an increase in output." "If they increase output by 500,00 barrels a day, it won''t do very much," he told AFP. "Even if they increase by one million barrels, it might not have much of an effect. We could see prices up to 40 dollars before too long, because I can''t see them doing anything drastic." Market watchers also warn that with winter looming and time lags likely to delay any quota increase, prices are set to remain high for months to come. Any output increase would take weeks to be transported to market, by which time the increased winter demand would already have kicked in. "Even if an increase is decided for the OPEC meeting, it will take time before it has impact on the prices," said Salomon Smith Barney analyst Peter Young. But not everyone believes oil prices will remain high through the long term. The Norwegian statistics bureau forecast on Thursday that the price of oil would fall to an average of 25.7 dollars a barrel this year, 21.0 dollars a barrel in 2001 and 18.5 dollars in 2002. _______________________________________________ Crashlist resources: http://website.lineone.net/~resource_base To change your options or unsubscribe go to: http://lists.wwpublish.com/mailman/listinfo/crashlist
