CONCERN OVER WEAKENING DOLLAR SUPPLIES ADDITIONAL IMPETUS FOR OPEC ACTION

Hart's Petroleum Finance Week, July, 2002

Members of the Organization of Petroleum Exporting Countries (OPEC) did as expected last week in Vienna and agreed to extend their current crude oil production quotas until the end of September. The cartel said that OPEC production curbs last year and during 2002's first half, combined with similar steps by non-OPEC producers, had restored relative balance to world oil markets. But it also suggested that current market strength was a partial reflection of political uncertainty and not a sole consequence of market fundamentals.

OPEC also said that doubts regarding the strength of the world economic recovery, uncertainty as to the modest demand growth for the year and current comfortable inventory levels led to its decision. "Also, and connected with this, is the strength...

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