August 6, 2002	Tuesday	Jamadi-ul-Awwal 26,1423

LONDON, Aug 5: The price of oil fell on Monday in response to news that Algeria had become the latest member of the Organization of Petroleum Exporting Countries (Opec) to push for an increase in its output quota.

Brent North Sea crude for September delivery fell 55 cents to $24.76 a barrel.

In New York, light sweet crude September-dated futures fell 41 cents to $26.43.

Algerian Energy Minister Chakib Khelil announced on Saturday that Algeria has asked OPEC to increase its oil production quota from the current ceiling of 693,000 barrels per day (bpd).

He said the request would be examined by the cartel at a meeting in Geneva at the end of August.

We have asked our representative to negotiate a higher quota, Khelil said.

Algeria’s move comes less than a week after Nigeria said it would also push for a higher output quota.

The market was hit by the news from Algeria, said Prudential Bache oil broker Christopher Bellew.

Whether they get the higher quotas or not it continues to sow seeds in people’s minds about non-compliance, Bellew told AFP.

With other cash-strapped OPEC members such as Venezuela keen to lift output analysts said it was looking increasingly likely the cartel would be forced to sanction an increase in output when it next meets to discuss the issue of quotas in September.

The wildcard of Iraq was also in play.

GNI analyst Lawrence Eagles said that while Iraq remained a positive factor, the market would soon start to tire of rhetoric.

It will want to see signs of an escalation before pushing prices too high, he wrote in a research note.

In a letter delivered Thursday to UN Secretary General Kofi Annan, Iraq invited UN weapons inspector Hans Blix for talks that could lead to the resumption of inspections, halted in December 1998.

But the White House signalled that the Iraqi gesture would have no impact on President George Bush’s hard-line policy towards Iraqi President Saddam Hussein, whom he would like to see overthrown.

And Blix on Sunday ruled out a visit to Baghdad to take up the Iraqi regime’s surprise offer of talks on renewed arms inspections.

Psychologically, I think it would be better that an official of my political standing does not go to Baghdad before they (the Iraqis) accept inspections, Blix told the Arabic-language Al-Hayat newspaper.

On Monday, Iraqi parliamentary speaker Saadun Hammadi invited the US Congress to send a fact-finding team to Baghdad for three weeks to check on allegations Iraq was developing weapons of mass destruction.

There was no immediate response from the United States.

Eagles added that notwithstanding rising Middle East tensions at current levels the oil market looked as if it needed assistance from data on US inventories, due out Tuesday evening, if it were to push much higher in the next few days.—AFP