Newspaper article THE JOURNAL RECORD

Posted Oil Prices Decline to $36.75

Newspaper article THE JOURNAL RECORD

Posted Oil Prices Decline to $36.75

Article excerpt

JIDDAH, Saudi Arabia (AP) - Recent rises in oil prices stem solely from fears of a war, not a supply shortage, Kuwait's oil minister said Monday.

Light sweet crude was trading at $37.75 per barrel Monday on the New York Mercantile Exchange. On the spot market buyers like Kerr-McGee Corp. and Koch Industries Inc. dropped posted prices by $1.75 a barrel, bringing Oklahoma Sweet and West Texas Intermediate to $36.75. Oil was selling on international markets for about $21 a barrel in July, and as low as $15 a barrel in March.

Analysts said Saudi Arabia, whose reserves have risen dramatically in the past year, will probably help prevent severe price shocks during a war.

The oil minister for the exiled Kuwaiti government, Rashid al-Ameeri, said at a news conference that oil prices would increase in the event of hostilities. But he said they would not skyrocket to $100 a barrel, as predicted recently by a former Saudi oil minister, Ahmeed Zaki Yamani.

Ameeri spoke in the Saudi capital, where his government-in-exile has been established since Iraq invaded Kuwait on Aug. 2.

A U.S.-led multinational force has been deployed to Saudi Arabia in response to the Iraqi aggression, and the stand-off is entering its 11th week.

A trade embargo meant to force Iraq out of Kuwait has cut off four million barrels per day of oil exports from Iraq and occupied Kuwait.

Industry experts noted Saudi Arabia, which sits on a third of the world's proven oil reserves, would exert itself to stabilize the market. The Saudis already have been instrumental in offsetting the shortfall in the oil market resulting from the invasion of Kuwait.

The kingdom increased its own output by about two million barrels per day to 7.5 million barrels, and convinced other members of the Organization of Petroleum Exporting Countries cartel to increase their output. …

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