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| September 30, 2002 | Monday | Rajab 22, 1423 |
World commodity report
Oil prices were threatened on the first anniversary of the September 11 attack and the prospect of a US military invasion on Iraq. Consequently the prices rose. In London, the price of Brent oil rose above $29 a barrel briefly on September 10, for the first time in almost a year. But prices fell towards the weekend. In New York, October dated light sweet crude futures traded at $29.20 from $29.72 a week earlier.
The US energy department meanwhile reported that the crude oil stocks fell 5.3 million barrels, or 1.8 per cent, to 293.2 million in the week ended September 6 from the previous week. Gasoline stocks declined 300,000 barrels to 205.6 million, while the distillate fuel inventories increased by 4 million barrels to 133.6 million.
At a recent meeting, the Organization of Petroleum Exporting Countries agreed to maintain severe restraints on oil production for the fourth quarter to keep crude prices from rising.
Opec left supply limits on hold despite worries among consumer nations about the impact of high energy costs on the world economy. After a meeting in Japan on September 19, Opec said that it would maintain oil production for the rest of 2002 at 21.7 million barrels per day, aimed at maintaining a price bank of $22 to $28 a barrel.
Opec cutbacks, in place since January, have combined with the threat of a US war against Iraq to push the benchmark US crude close to $30 a barrel — a setback for the industrialized powers trying to sustain a shaky economic recovery.
In early December producers will meet to review policy for the first quarter of next year, by which time any US plans for military action maybe clearer.
An existing Opec formula, adding more oil if prices stay above $28 for the basket, equivalent to about $30.50 for the US crude, for 20 consecutive trading days, could provide the trigger for more oil, said the UAE oil minister.
With the fuel demand rising ahead of the northern hemisphere winter, and the United States pressing the case against Iraq, fuel bills may quickly come under furthered pressure.
Dominated by the concerns of terrorist attacks on the first anniversary of September 11 and the prospect of a war on Iraq, gold prices had a volatile week ended September 14.
By September 13, gold was fixed at $318.85 an ounce on the London Bullion market against $319.25 the previous week.
Cocoa prices have more than doubled in the past two years. More recently they were bolstered by the prospect that this year’s crop will be insufficient to meet demand for the third year running. Prices continue to be supported largely by commercial buying.
Coffee prices extended recent gains, pushing up to new one year high points on technical factors and speculation of a possible reduction in forecasts of the size of the 2002-03 crop.
On LIFFE, the Robusta quality for November delivery climbed to $606 a tonne on September 12 from $533 the previous week. On New York’s CSCE market, the Arabica for December delivery rose to 56.70 cents a pound on September 12 from 52.70 cents the previous week.
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