www.theage.com.au Sunday 2 February 2003, 10:30AM

OPEC President Abdullah bin Hamad al-Attiyah said the rise in crude oil prices was linked to regional political developments and that the cartel could do nothing to contain them.

"The rise is due to political developments in the region and psychological factors on the market, and OPEC can do nothing to contain it," said Attiyah, Qatar's energy and industry minister, on the sidelines of an energy and environment conference in Abu Dhabi.

Attiyah said the cartel raised its oil production ceiling to 24.5 million barrels per day (bpd), in accord with a decision taken on January 12, in a bid to ensure adequate supplies of oil and restore balanced market conditions.

The production ceiling was previously 23 million bpd, and the decision was taken to compensate for the drop in oil exports from Venezuela, paralysed by an enduring strike in its oil sector.

Attiyah warned oil prices could nose dive if a US-led war against Iraq breaks out, but added that if Venezuelan production came back to its former levels it would contribute to price stability.

He noted that during the 1980-1988 Iran-Iraq war and 1991 Gulf war "prices rose to $US40 ($A68.05) per barrel before dropping quickly to $US10 ($A17.01), even $US7 ($A11.91)."

Attiyah said last week that the cartel could cut production following a planned meeting in March because of an expected production surplus.

On Friday, New York's light sweet crude March-dated futures were priced $US33.51 ($A57.01) a barrel, well above the $US22 ($A37.43) to $US28 ($A47.64) per barrel OPEC price band.

In London, the price of benchmark Brent North Sea crude oil for March delivery was $US31.06 ($A52.84) per barrel.

abcnews.go.com Feb. 1 — By Peg Mackey

ABU DHABI (Reuters) - OPEC power Saudi Arabia said on Saturday there was no shortage of oil in world markets and it would work to ensure the producers' group fulfills its new higher production ceiling of 24.5 million barrels per day (bpd).

"We have responded to the demands of our customers...there is no shortage of crude supply," Saudi Arabia's oil minister, Ali al-Naimi, told reporters ahead of an energy and environment conference.

"I can assure we will make sure, as Saudi Arabia, that 24.5 million bpd is delivered," he said. OPEC agreed last month to raise its output ceiling by 1.5 million bpd to 24.5 million bpd in a bid to cover a supply shortfall created by strike-bound OPEC member Venezuela.

The oil minister of Saudi Arabia, the world's largest oil exporter, declined to say how much oil the kingdom was pumping.

But he said Riyadh would be prepared, if needed, to make use of its still substantial spare capacity which he pegged at 2-2.5 million bpd. "Saudi Arabia has stated many, many times its responsibility to the oil market," he said. "We will supply any shortage up to our capacity whatever the cause."

The kingdom's new OPEC quota from February is set at 7.963 million bpd, but industry sources say the kingdom is expected to pump 8.5-9.0 million bpd.

Naimi has made clear that Riyadh is capable if necessary of ramping up flows to 10 million bpd within weeks.

He said OPEC stood ready to make up for any supply shortages without the release of world's emergency reserves.

"There is confidence in the producing countries to make up any shortfall without having to draw on strategic reserves," Naimi said.

The Saudi oil minister said global stockpiles are now running on the low side, particularly in the United States, due to the two-month strike in Venezuela. But he said inventories would start to fill up soon.

"With Venezuela returning and supplies steaming to the U.S., we will see a gradual build in inventory," Naimi said.

The state of global inventories will dominate discussions at the cartel's March 11 meeting, he said.

Naimi estimated there would be a demand decline in the second quarter of the year of about 2.5 million bpd.

sg.biz.yahoo.com Saturday February 1, 9:20 PM

ABU DHABI (Dow Jones)--The president of the Organization of Petroleum Exporting Countries said Saturday the there is no current need to further increase the overall oil production of the group because there is enough supply in the oil market.

Abdullah bin Hamad al-Attiayh, who is also Qatar's Oil Minister, said the high oil prices are currently inflated by psychological and political factors related to tensions over oil producers Iraq and Venezuela and not because of shortage of oil supply.

OPEC on Saturday started to implement a decision taken last month to increase production 1.5 million barrels a day to cool off runaway oil prices in a bid to bring them back into a target range of $22-$28 a barrel.

ADVERTISEMENTAl-Attiyah said OPEC's oil ministers remain in constant contact discussing the oil market situation and would hold an emergency meeting for the group whenever they see there is a necessity to do so.

He also welcomed the increasing oil production of Venezuela as a factor which will bring more stability to the oil market.

However, he said that he's concerned that the current high prices may collapse to unfavorable levels if Venezuela production increased to around 2.6 million b/d in the next few weeks, adding this increased output is actually combining with OPEC's latest production increase of 1.5 million b/d which begins Saturday.

OPEC Pres -3: Sees Possible Oil Glut In 2Q

Al-Attiyah said Venezuela is currently producing around 1.00 million b/d and is expected to boost its output to between 1.5-1.6 million b/d in the next few weeks.

A seasonal drop in oil demand of around 2.00 million b/d is expected in the second quarter and al-Attiyah said that as much as 4.00 million b/d of extra crude oil could flood the market, as Venezuela keeps increasing production.

Venezuela's production has been crippled by a nationwide strike since Dec. 2 - which has recently started to ease.

Speaking to reporters on the sidelines of an energy conference scheduled to open Sunday, Al-Attiyah denied analysts' speculation that oil prices would spike to as high as $60-$100 a barrel if a war on Iraq breaks out.

"There is no historical evidence to support this," he said, citing that oil prices never exceeded $40 a barrel during the Iran-Iraq war in the 1980s and the Gulf War in 1991.

Al-Attiyah said the he hasn't talked with the Paris-based International Energy Agency about the prospect of opening up oil reserves of consuming countries to calm the market in the event a war breaks out.

He said OPEC will consider various options at its regular meeting on March 11, including any shortage of supply or a potential oversupply in the international market.

-By Simeon Kerr and Abudlla Fardan; Dow Jones Newswires; 00973 530758; abdullah.fardan@dowjones.com

onebusiness.nzoom.com

Oil prices edged lower on Friday after three days of gains as dealers marked time ahead of US Secretary of State Colin Powell's bid to convince UN powers next week of the need to use military force to disarm Iraq.

US light crude held gains of more than $2 on the week, while London Brent fell 11 cents to $US31.10.

Low global oil stocks and reduced oil exports from strike-torn Venezuela have combined with war fears to boost oil prices more than 30% since late November.

Analysts see little relief from oil prices, near two-year highs, as the White House positions itself for war against key exporter Iraq, which hold's the world's second largest oil reserves behind Saudi Arabia.

US Secretary of State Colin Powell is due to present evidence Wednesday to the UN Security Council to show that Baghdad is pursuing programs to build biological, chemical or even nuclear weapons in violation of sanctions.

www.dailytimes.com.pk Staff Report

KARACHI: The Oil Companies Advisory Committee (OCAC) raised retail prices of different petroleum products by between 0.98 and 4.39 percent and the price of MS87-RON by Rs 0.32 to Rs 32.96 per litre for the next fortnight, according to a press release issued Friday.

“In the backdrop of the Iraq crisis and a strike that has disrupted crude exports from Venezuela, prices of crude oil and products have undergone a sharp increase,” the press release said. FOB price of Arabian light crude oil during the last fortnight reached a peak of $39.60 per barrel and registered an increase of 6.1 percent when compared to the first fortnight of January 2003, the press release said. The increase in the Arabian Light FOB crude oil price for the month of February 2003 is $2.28 per barrel or 8.6 percent in comparison to the price in December 2002.

“FOB prices of both crude oil and products are at their highest levels since July 2001,” the press release said. “Average exchange rate during the fortnight improved by Rs 0.14 due to the strengthening of the rupee vis-à-vis the US dollar.”

According to the OCAC press release, Arab Gulf FOB prices of Naphtha increased 2.01 percent to $264.81 per tonne from $259.60 per tonne during the first fortnight of January. The price of Arab Gulf kerosene oil increased 4.31 percent to $32.21 per barrel from $30.88 per barrel over the same period.

Product Existing Revised increase Rs/Litre Rs/Litre Rs/Litre MS-87 RON 32.64 32.96 0.32 HOBC 36.55 36.83 0.28 Kerosene Oil 20.62 21.32 0.70 Light Diesel 17.53 18.30 0.77