www.channelnewsasia.com First created : 21 January 2003 2051 hrs (SST) 1251 hrs (GMT) Last modified : 21 January 2003 2303 hrs (SST) 1503 hrs (GMT)

The Organization of Petroleum Exporting Countries may have to agree to a further production hike when it convenes on March 11 as markets have not responded to a decision by the cartel to boost output, said OPEC President Abdullah bin Hamad al-Attiyah on Tuesday.

"All options are open," he replied when asked if the Organization of Petroleum Exporting Countries could take further action to curb prices at a ministerial meeting in Vienna March 11.Advertisement

On Monday, oil prices climbed above US$30 a barrel in London, apparently indifferent to OPEC's decision in mid-January to increase production by 1.5 million barrels a day from next month.

The cartel's decision to raise production was a move taken to shore up market confidence in the face of international political tension.

"The problem is that the market is not receiving that," Mr Abdullah, who is also Qatar's energy and industry minister, told reporters following the inauguration outside Doha of a new petrochemical plant.

"The market is under a lot of political and psychological motivations, such as Venezuela and Iraq," he added.

Industry analysts have warned that war in Iraq and continuing labour unrest in Venezuela could deprive the global oil market of some five million barrels a day.

www.middle-east-online.com First Published 2003-01-21, Last Updated 2003-01-21 12:10:25

The oil market is under a lot of political and psychological motivations

OPEC President believes oil market will stabilize in coming months as oil prices climbing over $30/barrel.

DOHA - World oil markets have yet to respond to an OPEC decision to boost output and the cartel could therefore agree to a further production hike when it convenes March 11, OPEC President Abdullah bin Hamad al-Attiyah said Tuesday.

"All options are open," Attiyah said when asked if the Organization of Petroleum Exporting Countries could take further action to curb prices at a ministerial meeting in Vienna March 11.

Oil prices climbed above 30 dollars a barrel in London on Monday, apparently indifferent to OPEC's decision in mid-January to increase production by 1.5 million barrels a day from next month - a move taken to shore up market confidence in the face of international political tension.

"The problem is that the market is not receiving that," Attiyah, who is also Qatar's energy and industry minister, told reporters following the inauguration outside Doha of a new petrochemical plant.

"The market is under a lot of political and psychological motivations, such as Venezuela and Iraq."

Industry analysts have warned that war in Iraq and continuing labor unrest in Venezuela could deprive the global oil market of some five million barrels a day.

Attiyah, who stressed that OPEC is "watching the market very carefully," nonetheless added: "We believe it will stabilize in the coming months."

news.bbc.co.uk Tuesday, 21 January, 2003, 11:53 GMT

Worries over cuts in oil supplies boost the price

The price of oil touched two-year highs on Tuesday, as the build-up of troops in the Gulf tested the nerves of oil traders.

With the prospect of a war in Iraq becoming ever more likely, trading remained volatile as fears of an oil shortage pushed up prices.

The US Secretary of State, Colin Powell, told the United Nations Security Council that it should not be scared into "impotence" when it came to dealing with Iraq.

The markets are still very edgy with both Venezuela and Iraq remaining the key issues

Simon Games-Thomas Oil analyst

In London, Brent crude edged up 37 cents to $31.02 a barrel, while US light crude rose 44 cents to $34.35, its highest since December 2000.

A seven-week-old general strike in Venezuela has also limited oil exports and helped boost the price.

"The markets are still very edgy with both Venezuela and Iraq remaining the key issues," said independent oil analyst Simon Games-Thomas.

"Prices appear destined to trade higher given the current set of drivers and $35 beckons inexorably in the short term," Mr Games-Thomas added.

Shredded nerves

The shooting of contractors working for the US military in Kuwait, resulting in one fatality, also added to the pressure.

A report from Hans Blix could affect prices

Oil traders are concerned that any war in Iraq would limit supplies, despite the resolve of the oil cartel, Opec, to maintain the flow.

Just over a week ago, Opec agreed to increase official production after an emergency meeting in Vienna.

"Opec is trying to send a very strong message that it will do its utmost to stabilise demand and supply," said the cartel's president Abdullah bin Hamad al-Attiyah.

The release of a major report by Chief UN weapons inspector Hans Blix next Monday will provide further direction for the oil price.

The evaluation of the report on 29 January could provide more clues as to the likelihood of a war.

Tension builds

Both the US and the UK are planning a major deployment of forces in the Gulf.

On Tuesday, the US announced it would send nearly 37,000 more personnel to the area in preparation for possible military action.

Meanwhile, the nationwide strike in Venezuela - designed to bring about the resignation of President Hugo Chavez - is strangling oil supplies.

As the world's fifth-largest exporter, Venezuela accounts for 13% of US petroleum imports.

A shortfall in supplies has cut US commercial crude stockpiles to 26-year lows.

news.ft.com By Gordon Smith in London Published: January 21 2003 12:18 | Last Updated: January 21 2003 12:18

Crude futures rose sharply in London on Tuesday as concerns over the stability of the Middle East rose after a US citizen was shot dead in Kuwait in a suspected terrorist attack and US and UK troop deployments to the region increased war fears.

The IPE March Brent contract rose 50 cents to $31.21 while the US crude hit a two-year high of $34.50 in electronic trade. On Monday US markets were closed for Martin Luther King day.

Earlier the US confirmed a civilian contractor working on a US military base in Kuwait had been shot dead and another wounded in what it said was a terrorist attack.

The killing came as tension in the Gulf mounted after the British government announced it was committing 30,000 troops to the region. The news came ahead of the interim report from Hans Blix, the UN's chief weapons inspector, to the UN security council next week.

Oil traders remain concerned that any conflict in the Gulf will coincide with the ongoing strike in Venezuela and restrict supplies even further.

The Venezuelan strike, in its 51st day, showed no signs of ending as the battle between supporters of the Chavez government and the strikers intensified.

On Sunday president Hugo Chavez said he was "winning the war on oil" and that oil output had risen to 1.2m barrels per day. But striking workers claimed the actual output was at only half of the president's claimed levels.

The strike has slashed Venezuelan output by about 80 per cent from its pre-strike levels of between 2.5m and 3m barrels per day.

The gold spot price drifted lower ahead of the reopening of trade in the US. The precious metal fixed at $355.20 in morning trade on the London Metal Exchange, down from the previous session's fix of $355.85.

Gold remained close to recent highs however as worries about possible war in the Gulf persisted and the dollar, which traditionally has an inverse relationship with gold, traded just above multi-year lows against other leading currencies.

www.canada.com Tuesday, January 21, 2003 CREDIT: ADRIAN WYLD, CANADIAN PRESS

Oilsands producer Suncor Energy is expected to release strong fourth quarter and year-end profits today as rising oil and natural gas prices fatten the bottom line for the entire oilpatch.

Suncor's results will launch the start of earnings season in the energy sector.

And buoyed by both sky-high oil and strong natural gas prices, profits are expected to nearly double over last year.

The simple answer to the soaring profits expected in the oilpatch lies in commodity prices.

Because of concerns about a war in Iraq and the turmoil in Venezuela, oil hovers at $34 U.S. a barrel, nearly double the $18 a barrel it traded at this time last year.

"That really describes the year in a nutshell," Greg Stringham, vice-president of markets for the Canadian Association of Petroleum Producers, said yesterday.