PETROLEUM prices firmed yesterday as the market took the view that
Iraq's resumption of oil sales would be delayed.
That would give a divided Opec (the Organisation of the Petroleum
Exporting Countries) a breathing space to try to agree on how it would
prevent a glut.
London September futures for the benchmark Brent Blend of crude oil
traded up to $16.84 per barrel. This was up 15 cents on the day and
almost a dollar stronger than a week ago.
Last Monday prices tumbled on a belief that the United Nations would
soon ease the embargo on Iraqi oil which it imposed when Iraq invaded
Kuwait in 1990.
Prices recovered when Opec announced it would hold an emergency
meeting but this later had to be put off as Saudi Arabia and Iran feuded
publicly.
Iran said Saudi Arabia's quota was too high. The Saudis blamed weak
prices on quota violation by Iran. Neither wants to concede market share
before Iraq returns to the market.
Opec president Jean Ping of Gabon flew home from a tour of the Gulf
yesterday after trying to find ''a minimum consensus'' that would enable
him to set a new date for Opec talks.
The next scheduled session is on September 25. Opec delegates said
this meeting could, if judged necessary, be advanced to late August or
early September.
Diplomats suggest that there may be no quick result in Iraq's talks on
the oil embargo with the United Nations. They say Iraq may stall on
current negotiations to sell a small volume under supervision in the
hope that the embargo might soon be lifted entirely, if it complies with
UN weapons inspectors.
The Middle East Economic Survey (Mees), an authoritative oil
newsletter, said yesterday that current Opec production was around
24,600,000 barrels daily. This is already one million above the current
official ceiling.
Mees saw a danger that prices might collapse if Iraq sells oil and the
rest of Opec still cannot agree quotas that all the members accept.
Besides Iran and Saudi Arabia being at loggerheads, Kuwait is refusing
to accept an assigned quota which it calls unfair.
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