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NEW YORK (AFP) - The price of oil edged up here Thursday despite a promise by the Organization of Oil Producing Countries (OPEC) to take "further action" to alleviate fuel shortages ahead of coming winter. Light sweet crude for October delivery was selling for $34.07, up 25 cents from Wednesday's price. The price of crude for November delivery moved up 22 cents to $32.90 a barrel. The prices moved up despite an OPEC statement from Vienna, saying the oil cartel was "ready to take further action" this winter if the price crisis becomes more acute. On Sunday, the organization vowed to boost production by 800,000 barrels a day, beginning in October to help cool an overheating market. And on Wednesday, OPEC signaled it could begin pumping an additional two million barrels of crude a day to avoid major economic disruption throughout the world. "If two million more barrels were needed in the market, Saudi Arabia and Venezuela have sufficient capacity to respond to predictable increases in demand in the immediate future," Ali Rodriguez, president of OPEC and Venezuela's energy minister, said in Caracas. In London, oil prices showed no real signs of weakness, as the North Sea Brent reference crude touched $32 a barrel again at one point before easing back to $31.62 in late trading. But despite encouraging signals from OPEC, the crisis has already become acute across parts of Europe. Even as a truckers' protest abated in Britain, it looked set to spread to Spain, Poland, Germany, Denmark and Norway. Protesters are blockading fuel depots because they are furious at the high cost of petroleum products. Western governments blame the steep rise in prices on a three-fold increase in the cost of crude over the past 20 months, and have urged OPEC to open the floodgates to bring down prices. But OPEC again stressed Thursday that it was not to blame for the current high prices, blaming instead "those governments that see fit to impose exorbitant levels of taxation on petroleum products." It called for Western governments, some of which reap more than 70% in tax on fuel products, to cut their levies. Market players said that OPEC's comments were starting to nag at prices at last. "OPEC's declaration is helping the recent slide," said Prudential Bache broker Tony Machacek. "But it is still too early for the market to assess the meaning of the OPEC decision on Sunday" to boost output by 800,000 barrels a day. Oil prices have spiked to levels not seen since the 1990 Gulf War because demand has picked up while reserves have dwindled in some countries to levels not seen for a generation. Analysts expect prices to remain high in the short term, particularly if the winter starts with a cold snap. "It depends on the weather," said Deutsche Bank analyst Nick Bennenbroek. "The inventory situation is low just at the time of the year when price spikes normally occur in anticipation of winter pressure, so there is not much scope for near-term price relief." But in the longer run, most believe that it would be counter-productive to keep prices high even for OPEC nations luxuriating in a petrodollar windfall. High prices are encouraging non-OPEC countries to invest heavily in oil production for quick gain, and this will bring new floods of supply to the market, depressing prices and threatening OPEC's own market share. "The authorities will try and do something because it is not in the interests of Western politicians, and it is not in the interests of OPEC producers as well," said Bennenbroek. |
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