Libyan-Led Embargo Said `Empty' Threat / Loss Could Be Made Up
L. D. Barney, THE JOURNAL RECORD
"In the current world oil glut that's not much of a threat," said Bill Dutcher, senior vice president with The RAM Group Ltd.
Tuesday, the Organization of Petroleum Exporting Countries refused to discuss an embargo, reportedly called for by Libya. The 13-nation cartel did agree to protest the U.S. bombing of Libya, but neither the attack nor the OPEC meeting appeared to have any effct on financial markets - including oil prices.
United States imports from Arab nations amount to not more than 500,000 barrels a day, less than 10 percent of all U.S. imports, Dutcher said.
Loss of that amount could easily be made up by purchases from non-OPEC sources such as Canada or Mexico. Non-Arab OPEC countries like Venezuela are also likely sources, Dutcher said.
Any embargo by Libya itself would be "negligible," Dutcher said. Since President Reagan imposed economic sanctions on Libya, the U.S. imports less than 4,000 barrels of Libyan oil a day.
"It probably would not have that much effect on us," agreed John Spears, analyst with Tulsa-based Spears and Associates.
"There's plenty of oil around and it would not have much affect on prices," he said. "If they didn't sell it to us, they'd sell it to somebody else.
"It would all be kind of a wash. Embargos are only influential when supply and demand are tight.
Conoco Inc., the only Oklahoma-connected oil company with interests in Libya said Tuesday it had received no indication its operations would be affected.
Conoco has one-third of a Libyan-based company named OASIS. It is licensed by the U.S. government to do business in Libya, said Conoco spokesman John Gehbauer. Since February Conoco has sold about 500,000 barrels of oil, by tanker, to European refiners.
"There has been no indication of any change of attitude on our operations," Gehbauer said.
Libya production averages about 1 million barrels a day.
- Crude oil futures prices Tuesday closed at $12.70 a barrel, down 27 cents from Monday's settlement. Traders appeared sceptical that OPEC will reach an effective agreement to limit production,according to wire reports.
Saudi King Fahd said in a statement distributed by the official Saudi news agency that his kingdom was opposed to any cut in production below the current unofficial OPEC ceiling of 16 million barrels a day.
- Stock prices were up slightly but the dollar was mixed against other major curriencies. The bond market was also mixed. …