NewsMine — economy — united-states — 2003 — 2003-nov-dec — Viewing Item

Dollar depreciation eats up opec gains Original Source Link: (May no longer be active)    http://www.petroleumworld.com/story3009.htm http://www.petroleumworld.com/story3009.htm Dollar depreciation eats up OPEC gains By Perrine Faye AFP VIENNA Petroleumworld 11 03 03 The depreciation of the dollar is eating up the gains made by OPEC members from high oil prices and has become a main factor in the decision making process of the cartel ahead of its meeting here Thursday. "Current prices are right, the dollar is weakening, its purchasing power is quite weak," Saudi Arabian Oil Minister Ali Al-Nuaimi said Wednesday upon his arrival in the Austrian capital which hosts the headquarters of the 11-member Organisation of Petroleum Exporting Countries. "We want to keep the prices where they are ... within the purchasing power of old good dollar," he added. OPEC's president Abdullah bin Hamad Al Attiyah, who is also Qatar's energy minister, said "the weak dollar is making a lot of concern." He estimated the purchasing power of the greenback compared to the European single currency had dropped by more than 35 percent from a year ago and said consumers in eurozone were "enjoying huge discounts at the expense of the (oil) producers." Libyan Oil Minister Abdulhafid Zlitni said "the drop in the dollar justifies the current price" of crude oil, hovering above the 22-28 dollar per barrel band targeted by OPEC. "The present level of prices should be acceptable to everybody. "The dollar has weakened and it goes against the trade of (oil) producing countries," he added. But both Nuaimi and Zlitni said 22-28 dollar per barrel price band sought by the cartel for its reference basket of crudes will not be changed, despite a suggestion by fellow OPEC member Venezuela to hike it to 25-32 dollars. "I don't think we will raise the current band even if the price goes above the upper end," said the Libyan. Attiyah said it would be "unrealistic" for the cartel to discuss a shift to pricing oil in euros. Analyst Bill Farren-Price, from the Cyprus-based Middle East Economic Survey (MEES), said Nuaimi's comment indicates that the "Saudis may be prepared to tolerate a price above the 22-28 dollar band." He said the Saudis would be satisfied with a price of 28 dollars for Brent North Sea benchmark crude, or 30 dollars for US benchmark West Texas Intermediate. OPEC's basket of crudes trades usually lower than Brent and WTI. "There is serious concern about the loss of the US dollar," said Farren-Price. "The weakening of the US dollar affects purchasing power" of OPEC members whose budgets and economic development plans rely heavily on the export of crude oil priced internationally in the US currency. Most OPEC members, including Saudi Arabia, have said the cartel should maintain its current 24.5 million barrel per day (bpd) ceiling when it meets Thursday, but hinted that production should be slashed in the second quarter of 2004, as seasonal demand decreases and output from oil producing countries from outside the cartel is expected to rise. Oil prices since June have stayed close the 28 dollar mark, and often hovered above it, with demand now driven by the winter season in the northern hemisphere and rapid economic growth in the United States and China. At 1700 GMT the price of Brent North Sea crude oil for January delivery was at 28.92 dollars in London, after opening at 28.85 dollars on Wednesday and closing at 28.94 dollars Tuesday. In New York the price of light sweet crude for January delivery lost 13 cents to trade at 30.65 dollars in the morning. AFP 03/12/03 19:06:24 Copyright © AFP 2003, All rights reserved

Companies overworking employees { November 12 2003 } Dollar 11 year low versus pound Dollar depreciation eats up opec gains Dollar falls to fresh low against euro { November 18 2003 } Economy booms ahead on investment surge End of steel tariff yield economic relief Extremely low inflation { December 5 2003 } Gold over 400 as euro strengthens { December 1 2003 } Gold price rises 20 percent over year { January 1 2004 } Jobless count skips millions { December 29 2003 } Market waiting for jobless claims employment { November 5 2003 } Nov consumer confidence at 14 month high Personal bankruptcy filings jump 8 percent Profit taking after 6 day gain drops dow Stocks at year highs after saddams capture Stocks rally as dow closes above 10 000 { May 24 2002 } Trade defecit china record high Unemployment indicators misleading few jobs added { January 9 2004 } Us jobless september claims higher { November 13 2003 } Us stocks dip after jobs data Files Listed: 20

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