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 5. TRADE  6. GULF



Nov 12 - 18, 2001

OPEC to slash output in November

The world's top oil producer Saudi Arabia and two other Gulf nations announced Saturday that OPEC will shortly reduce production in order to push prices up.

Non-OPEC Oman said there was a need to reduce "current (global) production" by at least one million barrels a day in order to boost the price of a barrel to 25 dollars from current 19 to 20 dollar level.

"We (OPEC) have already reduced our production three times. I cannot see what prevents us from doing it again in order to preserve the price band" of 22 to 28 dollars per barrel, Saudi Oil Minister Ali Nuaimi said.

"OPEC will take all necessary measures to maintain the band," he added, at the end of a meeting with his counterparts Obeid Al-Nassiri from fellow OPEC member UAE, and Mohammad bin Hamad Al-Romhi of independent producer Oman.

Nuaimi said global oil supply was excessive and, asked if this meant the oil cartel was going to reduce production or, instead, decide to tighten members' compliance with their quotas, he replied "All of the above".

"There is an agreement in principle to change the production ceiling," added United Arab Emirates Oil Minister Obeid al-Nasseri at a press conference.

Romhi said a "one million bpd (cut) would be a good start, from current production." The Middle East Economic Survey (MEES) reported Saturday that a proposal to cut output by 750,000 to one million bpd will be on the agenda of the November 14 ministerial meeting of OPEC.

Oil prices struggle as market shrugs at OPEC overtures

Oil prices struggled to hold recent gains on Tuesday as the market shrugged at a grand meeting of oil producers in Vienna that produced no concrete deal to rescue prices.

A barrel of Brent North Sea crude for December delivery stood at 21.05 dollars, from 21.02 dollars at the close on Monday.

The New York light sweet crude December contract shed 15 cents to 22.00 dollars a barrel.

Many analysts believe the oil price, which has persisted in a 22-28 dollar range for much of the past year, could trend lower and average below 20 dollars in the coming year because of a collapse in demand.

Experts at a two-day London conference on the future of the oil industry following last month's terrorist attacks on the United States agreed that demand would remain frail and supply plentiful in the coming months.

"The oil market was in trouble before September 11 because of economic weakening, but certainly September 11 made it worse, particularly the demand side," said David Knapp, a senior editor at the Energy Intelligence Group.

"The disruption of supply just hasn't happened," he said, adding "if it did it could be offset Saudi Arabia and others could just add oil." Saudi Arabia and its allies in the Organisation of Petroleum Exporting Countries are mulling what to do about supply as a result of the slump in prices, which have fallen around 25 per cent since September 11.

Saudi does not back US war on Afghanistan

Saudi Arabia, Washington's main Gulf ally, does not back US-led strikes on Afghanistan, Interior Minister Prince Nayef Bin Abdul Aziz said Wednesday, ahead of a visit to the kingdom by British Prime Minister Tony Blair aimed at shoring up support for the anti-terror campaign.

"No, the kingdom is not backing (the strikes) in the real term of the word," the prince said, quoted in Al-Riyadh newspaper.

"The kingdom only has a position" on the anti-terror campaign, he said, without elaborating.

The US-led coalition should work to avoid bombing innocent civilians and concentrate strikes on terrorists, the minister said after arriving back in Riyadh from a meeting of Gulf Arab interior ministers in Bahrain.

Oil imports from Iraq in 2002

Jordan will need to increase its oil imports from Iraq for the year 2002, Jordanian Energy Minister Mohammad Batayneh said Tuesday before leaving for Baghdad.

"The Jordanian-Iraqi oil protocol for the year 2002 will increase by five to 10 per cent, given Jordan's growth in oil demand," Batayneh said, quoted by the official Petra news agency ahead of his departure to Iraq for a visit of several days.

"My visit to Baghdad will be based on this matter," the minister said before adding that "the Jordanian and Iraqi parties are already agreed on the main lines of the new oil project for the year 2002." Iraq supplies Jordan with all its oil.

Baghdad fair

Hundreds of European firms will take part in the Baghdad international trade fair opening on Thursday in the biggest turnout since a UN embargo was imposed on Iraq 11 years ago, organizers said Sunday.

"The number of participants will exceed that in 2000," when 1,554 firms from 45 countries displayed their wares at the Baghdad fair, said Fawzi Hussein Dhaher, head of the Iraqi Fairs Association.

France will lead participants from the European Union, with 104 French firms due to exhibit their products at the fair, which will last 14 days starting November 1 instead of the usual 10 days in previous years, a diplomatic source said.

Dubai motor show

Leading tyre manufacturers from around the world will be exhibiting at the Motor Parts & Accessories show to be held along with the 6th Middle East International Motor Show at the Dubai World Trade Centre (DWTC) from November 8 - 12, 2001.

The world's leading tyre companies including Pirelli, Bridgestone, Firestone, Ohitsu and Falken will be exhibiting at the Middle East International Motor Show.

Pirelli the US $3 billion Italian tyre major with a significant presence in the Middle East for over the past 20 years will launch its P6 and P7 high performance tyres at the Motor Show. The P6 and P7 are the new 'Safety Generation' performance tyres designed to equip a range of vehicles from high-class saloons to the latest generation sports cars.

Jordan industrial delegation

Iraqi Minister of Trade Mohammad Mahdi Saleh, Saturday , affirmed Iraq's close and strong relations with Jordan.

Iraq stands by Jordan with all its capabilities and always feels optimistic on its relations with Jordan , said Saleh in an exclusive statement to Petra following his meeting with a Jordanian economic delegation currently on a visit to Baghdad. "Iraq looks forward to having broader and more comprehensive relations with Jordan," he added.

He said trade contracts reached with Jordan this year under the memo of understanding with the UN amounted to $800 mln and with $450 mln trade protocol between the two countries, the trade volume has come up to $1.25 billion excluding Iraqi private sector's imports from Jordan.

Arab Bank stocks boost Amman market

Blue chip Arab Bank, which represents 52 per cent of market capitalisation, buoyed Jordan's stock exchange which led Arab markets in a mixed week, Bakheet Financial Advisors (BFA) said Saturday.

The Amman stock exchange index closed the week ending Friday at 161.83 points, up 4.8 per cent on the previous seven days.

Five more markets were up on the week but six others fell, BFA reported.

The Kuwait Stock Exchange made solid gains to close at 1,650.50 points, up 1.5 per cent from last week, and Lebanon's BLOM recorded the same percentage rise to close at 411.01 points, boosted by market leader Solidere.

Islamic banks

Islamic banks in Bahrain, which operate according to strict Islamic regulations, have no links whatsoever with terrorist groups, Bahrain Islamic Bank (BIB) chief executive Abdul-Latif Janahia said on Tuesday.

Janahi said Islamic banks and financial houses are under strict supervision of the Bahrain Monetary Agency (BMA), the central bank, which bans dealing with suspect groups or individuals.

"We are convinced that Islamic banks in the Gulf have no direct or indirect links with the terrorist groups," said Janahi, who is also a member of Bahrain-based General Council for Islamic Banks and Financial Institutions.

"The American list (of suspects) does not include any Islamic bank or any Islamic financial house," he told Reuters.

Gulf Air

Gulf Air announced Sunday it is scaling back operations in a fight for survival amid the global downturn in the aviation industry.

"In the wake of the dramatic downturn in international air travel, Gulf Air ... is reviewing its options for action to preserve its operations in the immediate future," president and chief executive Ibrahim Al Hamer said.

"Our present plan is to reduce our fleet from 30 to 26 aircraft during 2002," he said in a statement.

The number of passengers Gulf Air carried fell six per cent in September and more than 20 per cent in the first two weeks of October, compared to the same periods in 2000.

Profits of Saudi industrial giant decline 37%

The Saudi Basic Industries Co. (SABIC) said Sunday it posted a net profit of 501 million dollars in the first nine months of this year, a plunge of 37 per cent from the same period last year.

SABIC deputy chairman and managing director Mohammad Al-Madi attributed the decline to "lower prices and the increased cost of raw materials." Additional costs covering loans from the Saudi General Investment Fund also impacted on the results, he added.

The corporation's sales in the first nine months rose to 6.1 billion dollars compared to 5.66 billion in 2000. Total production in the first nine months was 26.3 million tons, an increase of 27 per cent over the same period last year. Sales reached 20.6 million tons, also an increase of 27 per cent.

Sharon offers talks on his terms

Israel said Jamil Jadallah was planning a major attack, Israeli Prime Minister Ariel Sharon has indicated he will accept negotiations with the Palestinians but insists he will lead them himself.

He was speaking ahead of an expected meeting between the Israeli foreign minister and Palestinian leader Yasser Arafat, and just before a visit to the region by British Prime Minister Tony Blair.

"Myself, I am going to lead all the negotiations, I really believe in that," Mr Sharon told leaders of the World Jewish Congress in Jerusalem on Wednesday.

UNHCR head arrives in Iran

The head of the United Nations refugee agency, Ruud Lubbers, has arrived in Iran on the second leg of a tour of Afghanistan's neighbours to try to persuade them to open their borders to Afghan refugees.