December 4, 2001	Tuesday	Ramazan 18, 1422

LONDON, Dec 3: Crude prices shot up on Monday after Israel launched an attack on the heliport of Palestinian leader Yasser Arafat in Gaza City, leaving the oil market nervous of a reaction from the wider, oil-producing Arab world.

A barrel of Brent North Sea crude for January delivery was quoted at $19.67, up 53 cents from Friday’s closing value. In New York, the January light sweet crude contract jumped 66 cents to $20.10 a barrel. The oil market has frequently proven susceptible to the explosive situation in the Middle East, as dealers price in the outside possibility of a regional escalation.

The main concern is that other Arab oil-exporting powers could become embroiled in the conflict and use crude as a political weapon.

“The attacks caused the oil market to rally very sharply,” said Commerzbank oil expert Clay Smith. “The immediate reaction from the oil market was a bit nervous.”

Earlier the market had been weaker after Baghdad accepted another roll-over of the UN “oil-for-food” programme, removing the threat of interruptions to Iraqi exports.

The five-year oil-for-food programme, under which Iraq exports oil in return for food and medical supplies, was rolled over until May 2002.

BRUSSELS: Opec Secretary General Ali Rodriguez called on Monday for “cooperation and solidarity” among all oil producers to avert a collapse in world oil prices after non-Opec member Russia indicated it might draw down its exports in 2002.

This is a common problem. It needs a common solution, said Rodriguez after a meeting in Brussels with Belgium’s European affairs minister Annemie Nyets, whose country holds the rotating EU presidency.

With crude oil now trading at less than $20 a barrel, we are calling for the cooperation and the solidarity of all producers in order to avoid a (price) collapse, he said.

World oil prices have fluctuated wildly in recent years, from around 10 dollars a barrel in late 1998 to more than 30 dollars in March last year.

The European Union, which gets 45 per cent of its oil from the Middle East, has previously indicated that it would like to see the price stabilized somewhere in the $20 range.

Last Friday, Rodriguez warned of an “unimaginable” collapse in oil prices next year if non-Opec rival producers did not agree to cut output in tandem with the cartel.

The problem we are all facing is the uncertainty surrounding the global recession. No one can accurately gauge when the economy will recover, and to what extent, he told the specialist OPECNA news agency.

Failure to act now could result in an unimaginable price crash in the second quarter of next year, when oil demand traditionally falls as winter ends in the northern hemisphere.

On Saturday, Russian Prime Minister Mikhail Kasyanov was reported as planning to meet the heads of the country’s top eight or nine oil companies this week to examine a possible cut in oil exports early next year.—AFP