The European Union wants to buy oil at 20 USD a barrel as it prepares its winter stocks, according to the EU Commissioner for Energy, Loyola de Palacio. The industrialised countries fear that an increase in use due to a cold winter will provoke dangerously low stocks, pushing up prices and throwing economies back into recession.
Another factor which will certainly increase prices is the growing crisis in the Gulf. George Bush’s aggressive speeches of recent days have sent the reference value tumbling, due to the insecurity which will inevitably be felt in the period leading up to military conflict, the more so now since Baghdad has refused a return of the UN weapons inspection team.
While the consuming countries have one policy, the producers have a different one. For these, there is enough oil on the market to guarantee a good price and there is talk among some OPEC countries to freeze production rises for two to three years. However, other non-aligned members of OPEC might be tempted to use the current nervousness, seizing an opportunity to raise their production levels under the pretext of stabilising prices.
The situation should be clarified during the coming week at the World Energy Forum in Osaka, Japan.
John ASHTEAD PRAVDA.Ru LONDON UNITED KINGDOM