OPEC members meet this week amid speculation that the cartel is limited in the impact it can have on oil prices, which have surged by almost 60pc in the past nine months. In what may be their last meeting before a US-led coalition attacks Iraq, the members may consider actions such as suspending formal quotas in a bid to lower prices. But oil prices rose this morning amid waning hopes that OPEC will be able to make a difference and following comments from Colin Powell that the US is close to securing the support of nine UN Security Council members it needs to go ahead with military action against Iraq.
At 0900, crude oil in London was trading up 40c at USD34.50 per barrel, while on the NYMEX, oil was up 35c at USD38.13. Analysts say OPEC member Saudi Arabia is particularly keen to do what it can to lower prices, as this will help it rebuild relations with the US, strained due to the fact that 15 of the 19 September 11 hijackers were Saudis. But they say that international political tension has robbed the cartel of much of its influence and that there will be little it can do in the event of a war, which would almost certainly cut off oil exports from Iraq. ///www.fxcentre.com