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Nov 27 - Dec 03, 2000

OPEC to hit oil gamblers

OPEC is considering measures to limit the impact of speculative oil buying which it believes has added up to $8 to the price of a barrel of crude, the cartel's president told a newspaper Thursday.

"We are analyzing the situation provoked by this practice and very soon we will propose new mechanisms to correct the very high levels of speculation although, I insist, I do not believe we can eliminate it altogether," Venezuela's Ali Rodriguez told Spanish financial daily Expansion. He did not elaborate.

Rodriguez said it was "absurd" that benchmark crudes West Texas Intermediate, Brent and Dubai sold a million barrels between them per day but were indicators for world prices.

"OPEC itself, which is placing 22 million export barrels daily, suffers from this phenomenon and is affected by output or volumes that are totally marginal in the global market," Rodriguez told the newspaper.

Rodriguez said: "In these markets there are days when 150 million barrels have been sold. That doubles daily demand for oil in the whole world."

"Speculation, which alters the price of a barrel by between $4 and $8, is a reality in the capitalist world in which we live. But you can't get rid of it, only moderate it."

Rodriguez, bowing out as Venezuela's oil minister and due to swap the rotating presidency of OPEC for the post of cartel secretary general in January, said tackling speculation would be one of his priorities.

He said refining capacity, a lack of reliable information on stocks levels, transportation costs and high taxation levels were also affecting oil prices.

Rodriguez also said OPEC was ready to cut or increase production if prices swung by too much, but added the cartel believed there was now an oversupply of around 1.4 million barrels daily on markets.

Egypt trade deficit eases as economy picks up

Egypt's trade deficit narrowed markedly in the quarter from July to September from the year-ago quarter amid a general macroeconomic improvement, the Central Bank said on Tuesday.

The trade deficit declined to $2.37 billion compared to $3.00 billion in the same period last year.

The current account deficit was cut to $112 million in the first quarter of fiscal 2000/2001 (July/June) from $377.9 million during the same quarter of last year.

The balance of payments deficit has narrowed to $555.9 million from $1.02 billion a year ago.

Egypt's foreign debt fell to $26.75 billion at the end of September 2000 then again to $26.3 billion at the end of October 2000 from $27.78 billion at the end of June 2000.

Total tourism income reached $1.21 billion in the quarter compared to $1.18 billion in the same period last year.

Total Suez Canal income reached $465.8 million in the quarter compared to $431.2 million in the same quarter last year.

Revenue from tourism and the Suez Canal are a key source of foreign currency for Egypt, along with remittances from Egyptians abroad and oil exports. Net inflows invested in securities increased to $286.8 million during the quarter from $132.1 million in the year-ago quarter.

Net inflows of foreign direct investments reached $109.8 million in the quarter compared to $114.9 million a year ago.

Oil price rises sharply

The price of oil climbed sharply on Monday on a market rattled by the prospect of a cold northern hemisphere winter, but little market-moving news emerged from the International Energy Forum in Riyadh over the weekend.

Benchmark Brent North Sea crude oil for delivery in January was selling for $33.65 a barrel here, up from $33.08 a barrel at the close Friday.

Prices had risen to $33.95 in initial deals.

The main factor behind the increase in prices was a drop in temperatures in the United States over the weekend, while fears of a slowdown in Iraqi oil exports in protest over a dispute with the United Nations over oil revenues had added to market concern, analysts said.

The three-day meeting of consuming and producing nations hosted by Saudi Arabia ending on Sunday did not reach an official consensus on a specific 'fair' price for crude, but Saudi Oil Minister Ali al-Nuaimi stressed that the demands of the two sides were not far apart.

Diplomatic, political efforts surge to stem Mideast tension

Political and diplomatic maneuvers intensified late Thursday to defuse clashes in the Palestinian occupied territories, after three days of non-stop bloodletting.

The flurry of diplomacy included a 20-minute phone call between Palestinian leader Yasser Arafat and US Secretary of State Madeleine Albright, who promised US support in stemming bloodshed which has claimed the lives of nearly 233 Palestinians and 28 Israelis, in eight weeks.

Arafat's top aide Nabil Abu Rudeina told AFP that Albright said Washington would "do its best to cool the situation down and push the two parties to restore calm."

Arafat earlier held talks with EU special envoy for the Middle East Miguel Angel Moratinos to discuss issues such as an Israeli blockade on the Palestinian territories and a proposal for an international protection force in the West Bank and Gaza Strip, a high-ranking Palestinian official told AFP.

US questions Syria on Iraqi oil pipeline

The US State Department said on Tuesday it asked the Syrian government whether it could confirm reports that Iraq has resumed pumping oil through a pipeline to Syria without UN approval.

"We've inquired with the Syrians about these reports whether they are accurate ... We are looking into them through our embassy in Damascus," said a State Department official, who asked not to be named.

The United States, which is seeking to stop the erosion of UN sanctions against Iraq, would oppose Iraqi oil exports through the pipeline without UN permission.

"What we have said in the past is that we have made it known to the Syrians that opening the pipeline without the approval of the UN Security Council would not be in accordance with UN Security Council resolutions," the State Department official said.

He declined to speculate on what the US would do if it confirmed that oil was flowing.

Palestinian economy loses $426 million

The United Nations said on Tuesday the Palestinian economy had lost an estimated $426 million in a two-month wave of violence with Israel that showed no sign of ebbing.

The Gaza office of the United Nations Special Coordinator (UNSCO) to the Middle East peace process said about 900,000 people, or just under a third of the Palestinian population, have been directly affected by loss of jobs in Israel.

Before the current crisis, tens of thousands of Palestinian breadwinners crossed into Israel every day to find work. Citing security concerns, Israel tightened travel restrictions on Palestinians after violence erupted on September 28.

Arabs pledge nearly $700 mln to Palestinians

Arab states had pledged nearly 700 million dollars to support the Palestinian resistance against Israeli occupation by the end of a meeting of Arab finance ministers here Thursday, participating countries said.

An Arab summit on October 22 decided to set up two funds worth one billion dollars to help the Palestinians cope with the economic repercussions of eight weeks of Israeli-Palestinians clashes.

Officials said so far Saudi Arabia has offered 250 million dollars, Kuwait and the United Arab Emirates 150 million each, Qatar 50 million, Algeria and Egypt 30 million, Oman and Yemen 10 million each, Syria seven million, Jordan two million and Sudan one million.

All amounts except those pledged by Saudi Arabia and Kuwait were promised at the gathering of finance ministers to discuss ways to implement the Arab summit's decision.

Egyptian recall of envoy draws praise from around region

Egypt's decision to recall its ambassador to Israel drew widespread approval Wednesday from newspapers around the region, all of them either heavily influenced or controlled by government policy.

Egypt recalled Ambassador Mohammed Bassiouni for consultations Tuesday in protest over heavy Israeli strikes on the Gaza Strip.

The Emirati daily Al-Ittihad hailed Egypt's as "a clear message to Israel that we can no longer keep silent over its crimes." "The supporters of normalization have failed, and Arab solidarity has eradicated the cancerous cells in the Arab body," said.

Jordan looks to build oil shale power plant

Jordan's Ministry of Energy and Mineral Resources is inviting international power firms to submit proposals to build a power plant by tapping the country's huge oil shale reserves, industry officials said on Tuesday.

Interested global firms must submit by May 31, 2001, their technical and financial proposals to build the oil shale fired power plant using direct combustion technology on a Build Own and Operate (BOO) basis, they said.

The proposals for constructing the 100-300 megawatt plant at the Sultani area in the south of the kingdom, where known large reserves of oil shale exist, should include the project's detailed layout.

Total shale reserves of oil are officially estimated at about 40,000 million tonnes.

Iraq wants closer economic ties with neighbours

Iraqi Deputy Prime Minister Tarek Aziq said the time is right for Iraq, Lebanon, Syria and Jordan to forge closer economic ties and benefit from their different strengths, a newspaper reported on Monday.

"It is normal to establish economic complementarity between Iraq, Lebanon, Syria and Jordan," Aziz said in an interview in Baghdad with the Lebanese newspaper As Safir.

"Circumstances are propitious for its establishment, particularly because of the regional situation, common interests in such complementarity and the absence of any political obstacle," Aziz said.

As for relations with neighbouring Turkey, Aziz said that "despite important political differences between the two countries and the Western air strikes launched from bases there against Iraq, (Istanbul) is committed to maintain close economic relations with Iraq." He said annual trade ties between Iraq and Turkey reached one billion dollars.

Saudi on reforms track despite high oil price

Saudi Arabia appears to be pressing ahead with sensitive economic reforms and a rare energy investment opening despite high oil prices that have in the past slowed change in the cautious Kingdom.

"Conventional wisdom is that when oil prices are high, Saudi Arabia does nothing," said Brad Bourland, Chief Economist at Saudi American Bank.

"But the reality is that because of the job creation need, the reform track will not be derailed by high oil prices." Western diplomats view Saudi Crown Prince Abdullah as a progressive leader dead set on removing government red tape, easing restrictions on foreign investment and tackling the kingdom's biggest challenge creating jobs for hundreds of thousands of young people entering the work force each year.

Amman secures Tripoli backing

Jordanian Prime Minister Ali Abu Ragheb said Sunday he had won Libya's backing for a project to help out with his country's meager water resources, the Petra news agency reported.

"Jordan has won a commitment from Libya to support the underwater pumping project from the Dissi aquifer," said Abu Ragheb before the end of his visit to Tripoli, where he met Libyan leader Muammar Gaddafi, the Jordanian agency said.

"We have decided to complete in December the technical studies and to create a bilateral committee to study the means of financing the project," which should cost 650 million dollars, he said, according to Petra.

New tourism company

Bahrain on Sunday approved, in principle, the setting up of a 100 million dinar ($265 million) tourism company to develop the Gulf Arab state's tourism industry, the Gulf News Agency reported.

The agency said the cabinet, in its weekly meeting, approved the setting up of the company and ordered economic and financial studies into the scheme. It said the firm, expected to become a centre for developing the island state's tourism potential, would have a 100 million dinar capital.

Saudi Arabia's Dallah Real Estate and Tourism Development Company last year signed a deal with the Bahraini government to set up a tourism company.

US to call on Gulf oil if Iraq halts output

US Energy Secretary Bill Richardson on Sunday played down the consequences of any halt in Iraqi crude production, saying Gulf states would make up any potential shortfall in oil supplies.

"I would simply say that Iraq should adhere to established norms for doing business with the United Nations and the international community," Richardson told reporters on the last day of the 7th International Energy Forum in Riyadh.

"We do believe that Gulf countries or the United States could make up that shortfall" caused if Baghdad were to halt output, Richardson said. "The first option would be the Gulf states filling in that gap." Baghdad last week informed customers they had to pay a premium of 50 cents over the barrel into an account outside the control of the United Nations and warned that contracts would be scrapped if they failed to comply.