[NYTr] Roundup of News on OPEC Summit, Dollar, Iran, Venezuela, etc

[All the News That Doesn't Fit]

Venezuela Information Office (VIO)
http://www.rethinkvenezuela.com

excerpted from VIO Venezuela Daily News Roundup - Nov 19, 2007

[At an OPEC meeting over the weekend, President Chavez said that the oil
group "should set itself up as an active political agent" against
imperialism and exploitation, according to Bloomberg.  Chavez has
proposed offering cheaper oil poor countries through OPEC.  Together
with Ecuador's President, Rafael Correa, Chavez also warned that a US
war on Iran would drive oil prices up and advocated against the use of
dollar reserves in OPEC nations.  Sources report that speculation about
a weakening dollar kept oil prices high.

President Chavez is visiting Iran today, accompanied by ministers in
oil, industry, and foreign affairs.  AFP reports that an agreement on
industry is expected to be signed between Venezuela and Iran, the
latest of many economic pacts under Iranian leader Mahmoud
Ahmadinejad.  The two countries are founding members of OPEC in 1960,
and together produce about 9 percent of global oil reserves, according
to Bloomberg. -VIO]

*************

Chavez Tells OPEC to Use Politics, Curb `Imperialism'

By Daniel Williams and Maher Chmaytelli

Bloomberg - November 19, 2007
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aNmE.oybx0H0

Venezuelan President Hugo Chavez brought his revolutionary zeal to the
cartel that controls 40 percent of the world's oil, urging fellow
members at a weekend summit to fight against ``imperialism'' and
``exploitation.''

Chavez used the Riyadh, Saudi Arabia, meeting of the Organization of
Petroleum Exporting Countries to advance a struggle for the soul of the
cartel. Countering him was the conference host, Saudi King Abdullah,
who said the organization's goal was simply to produce prosperity.

Their contrasting visions elbowed aside the usual OPEC talk about
production quotas and currency fluctuations. In the short term at
least, Abdullah's vision is likely to prevail, said Ihsan Bu-Hulaiga,
who runs a private business consulting firm in Riyadh and advises the
Saudi government.

``OPEC has to do with oil; it cannot solve the world's problems with a
political agenda,'' he said. ``It would be putting its bread and butter
at risk.''

Support for Chavez came from President Rafael Vicente Correa of Ecuador
and from Iran's Mahmoud Ahmadinejad, whose nation is the target of a
U.S.-led campaign of sanctions and pressure over allegations that it is
pursuing nuclear weapons and destabilizing the region.

Chavez, 53, and Correa, 44, stopped short of threatening an embargo in
case of a U.S. attack on Iran. ``We don't want to speculate,'' Correa
said in response to a question about whether a halt in oil sales to the
U.S. should be employed in case of war.

Anti-Colonial Roots

Chavez said his call for geopolitical activism takes OPEC back to its
anti-colonial roots. He likened OPEC to the Non- Aligned Movement, a
group founded in the 1950s to stand outside the Soviet-U.S. rivalry.

Chavez also addressed OPEC's debate over whether to drop the U.S.
dollar as its currency for pricing oil. ``The dollar is in a free fall
and everyone should be worried about it. The fall of the dollar is not
the fall of the dollar. It's the fall of the American empire,'' he told
a cluster of reporters outside the OPEC meeting hall yesterday.

King Abdullah brushed off proposals from Chavez and Ahamdinejad to drop
the dollar.

To counter Chavez's appeal, Bu-Hulaiga said, OPEC needs the U.S. to
help ease tensions with Iran and to resolve the Israel- Palestinian
conflict. ``It's not enough to ask Chavez to be quiet,'' he said in an
interview. ``We need responsibility everywhere. The United States can
help lower the tone.''

OPEC has used oil as a weapon before, when its Arab members stopped
sales to countries that supported Israel in the 1973 Middle East war.
The actions sent petroleum prices spiraling upward, created long lines
at gas stations in the United States and Europe and produced high
inflation across the globe.

$250 Barrel

Correa said a new war in the region could drive prices to $250 a
barrel. Chavez, in his speech, predicted a figure of $200 ``if the
United States is crazy enough to invade Iran.'' On Nov. 16 in New York,
crude oil for December delivery closed at $95.10 a barrel.

Ahmadinejad, 51, played down the possibility of a U.S. attack, saying
that President George W. Bush's administration lacks the ``economic,
political and military'' means to carry one out. ``No war will break
out in the region,'' he predicted during a news conference yesterday.

``Iran and Venezuela, because they have ideological differences with
the U.S., are trying to drag the other OPEC members into the conflict,
by appealing to solidarity against imperialism and aggression,'' said
John Sfakianakis, chief economist at the Saudi British Bank in Riyadh
and formerly a research fellow at Harvard University's Center for
Middle Eastern Studies.

The era of OPEC political activism is over, the cartel's Secretary
General Abdalla el-Badri told reporters last week. ``We are not using
the oil we sell to the world as a political weapon,'' he said at a Nov.
14 press conference in Riyadh.

Saudi Foreign Minister Saud al-Faisal said OPEC wouldn't take a stand
on a possible U.S. invasion of Iran. ``These are issues that can be
raised in other forums, not in OPEC,'' he told a news conference
yesterday. 

                             ***

Ecuador backs Chávez's stance on OPEC

The Associated Press

AP via Miami Herald - November 19, 2007
http://www.miamiherald.com/519/story/313187.html

RIYADH, Saudi Arabia -- Ecuadorean President Rafael Correa, in his
first public speech since his country's official reentry into OPEC,
said Sunday that the 13-nation oil producer group must take on a more
political role and that current oil prices remain historically low.

Correa said he joined his Venezuelan ally, President Hugo Chávez, in
arguing for the Organization of Petroleum Exporting Countries to assume
a more political role -- a position that other members, including the
group's de facto leader, Saudi Arabia, have clearly opposed.

''I agree completely'' with Chávez, he told a news conference in the
Saudi Arabian capital on the sidelines of OPEC's heads-of-state summit.

''OPEC needs a political vision to manage a strategic resource,''
Correa said.

''It is denying reality,'' to try and reduce OPEC to a purely
technocratic role, he said.

Correa did not directly back comments by Chávez that $100 a barrel is a
''fair'' price for oil, but said current prices, when adjusted for
inflation, still remained low.

''The price of oil is still lower than in the 1980s,'' he said.

The weakening of the U.S. dollar has eroded the value of oil earnings
for producers, and Iran and Venezuela have pushed for possible ways to
counter that, such as an oil currency basket -- a move Saudi Arabia
opposed earlier last week.

''We have to trade [our oil] in a strong currency,'' Correa said
Sunday, arguing that to do otherwise means that oil-producing countries
end up ''transferring'' the value of their oil to richer countries.
Correa did not further elaborate.

Correa also said OPEC has the clout in the energy market to help
coordinate a battle against global warming.

He suggested an environmental tax could be imposed on richer, consumer
nations that would help advance alternative fuels and also
''compensate'' poorer, developing countries trying to industrialize.

''There must be co-responsibility,'' between consumer and producer
nations in battling environmental issues and ensuring energy security,
Correa said.

Ecuador left OPEC in 1992 saying it couldn't afford to pay membership
dues and disagreed over OPEC's production quotas at the time.

Although Ecuador currently produces about 510,000 barrels a day of
crude oil, the government aims to have an OPEC quota of 530,000 barrels
a day.

                            ***

Venezuela's Chavez Visits Tehran for Talks After OPEC Summit

By Ladane Nasseri

Bloomberg - November 19, 2007
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=abvTPAegeI88

Venezuelan President Hugo Chavez, who has called on the Organization of
Petroleum Exporting Countries to resist ``exploitation,'' arrived in
Tehran for talks with Iranian President Mahmoud Ahmadinejad.

Chavez flew from Riyadh, Saudi Arabia, the official Islamic Republic
News Agency said. In Riyadh, he attended OPEC's meeting of heads of
state and urged the organization to take on a more political role.

Ahmadinejad and Chavez, both vocal critics of U.S. President George W.
Bush's administration, have strengthened ties over the past year,
multiplying joint industrial and energy projects.

The Venezuelan leader backs Iran's nuclear program which the U.S. says
is a cover for developing weapons. Iran is under international
sanctions with the U.S. hinting at the possibility of military action
should it persist in its refusal to halt uranium enrichment.

On Nov. 17 in Riyadh, Chavez warned that oil prices would rise still
higher if the U.S. was ``crazy enough to invade Iran.''

Iran and Venezuela, both OPEC members, produce together some 9 percent
of the world's oil. The two presidents met in Venezuela in September.
Today's visit is Chavez's second to Tehran this year. He also visited
Iran in June. 

                             ***

Venezuela's Chavez Visits Iran

By Nasser Karimi
The Associated Press

AP via The Washington Post - November 19, 2007
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/19/AR2007111900400.html

TEHRAN, Iran -- Venezuelan President Hugo Chavez made his fourth trip
to Iran in two years on Monday, state media reported, as the two
countries sought to strengthen ties while their leaders exhort the
international community to resist U.S. policies.

Chavez, who arrived in Tehran from Saudi Arabia where he attended the
weekend's OPEC summit, is expected to discuss various political and
economic issues with his Iranian counterpart, Mahmoud Ahmadinejad, the
official Islamic Republic News Agency reported.

Chavez was accompanied by a string of top Venezuelan officials for the
hours-long visit _ among them the foreign, industry, oil and
communication ministers, as well as the mayor of Caracas, the country's
capital.

Ahmadinejad also attended the Organization of Petroleum Exporting
Countries summit in Riyadh, Saudi Arabia.

During the gathering, the two firebrand leaders echoed one another,
blaming President Bush's policies for the decline of the dollar and its
negative effect on other countries, and challenging Saudi Arabia's
reluctance to mention weak dollar concerns in the summit's final
declaration.

Ahmadinejad claimed OPEC's member countries want to convert their cash
reserves into a currency other than the depreciating U.S. dollar, which
he called a "worthless piece of paper."

Chavez said the dollar was in free-fall and that its "empire" must end,
and proposed trading oil in a basket of currencies excluding the dollar.

But the two were unable to generate support from enough in the
13-member cartel _ many of whom, including Saudi Arabia, are staunch
U.S. allies.

Tehran is in a bitter standoff with Washington over its nuclear
program, which the U.S. fears is a cover for a weapons program but
which Iran insists is peaceful.

Meanwhile, the U.S. accuses Chavez of being a threat to stability in
Latin America, while the Venezuelan leader is constantly criticizing
U.S. "imperialism" under Bush.

Iran's foreign ministry spokesman, Mohammad Ali Hosseini, said Sunday
the two leaders would sign economic deals and memorandums of
understanding in economic fields, and an agreement on small and medium
enterprises.

In July, the two countries broke ground to start building a jointly
owned petrochemical complex in Iran, with 51 percent of it in Iranian
ownership and 49 percent to be owned by Venezuela. The two also began
construction of a second petrochemical complex in Venezuela, at a total
combined cost of $1.4 billion. No details on the ventures have been
disclosed.

The two nations believe their petrochemical partnership will help Iran
access markets in Latin America and Venezuela would get access to
energy markets in Asia, especially India.

During Chavez's previous visit in July, the two countries signed some
20 economic and trade agreements. Since 2001, they have signed over 180
trade agreements, worth more than $20 billion in potential investment,
according to IRNA.

                           ***

Venezuela's Chavez set to visit Iran

Agence France Presse

AFP via Google November 18, 2007
http://afp.google.com/article/ALeqM5jvDLHV1gsnUDSXMNBNQYc-4xNpdA

TEHRAN (AFP) ? Venezuelan President Hugo Chavez is to visit Iran this
week for his latest visit to the Islamic republic, underlining the
burgeoning ties between the two US foes, officials said Sunday.

However an Iranian official said Chavez would not be arriving on Sunday
as previously announced.

"Chavez is not coming tonight and it is not sure if he will be here
tomorrow," said the official, who asked not to be named, without giving
an explanation for the sudden change of plan.

Earlier, foreign ministry spokesman Mohammad Ali Hosseini told
reporters that Chavez would arrive late Sunday accompanied by five
ministers, including the foreign, oil and industry ministers.

Hosseini said the Venezuelan president would be signing an agreement on
industry during his one-day visit.

Both Chavez and his self-proclaimed political "brother", Iranian
President Mahmoud Ahmadinejad, are attending an OPEC summit in Riyadh,
where Chavez warned oil could hit 200 dollars a barrel if the United
States attacked Iran.

Chavez's visit would be his fourth to Iran since Ahmadinejad took
office in 2005. He last visited Iran as recently as July, laying the
foundations alongside Ahmadinejad for a joint petrochemical plant.

Despite their cultural differences, Iran and Venezuela have in the last
years forged increasingly strong ties based on their shared dislike of
the United States.

Chavez is the most vocal cheerleader in Latin America for Iran and its
nuclear programme, which is feared by the West to be a cover for
weapons development although Tehran insists it is purely peaceful.

Amid increasingly cool ties with the West over the nuclear standoff,
Iran has worked hard to cultivate its ties with Non-Aligned allies like
Belarus, Bolivia Nicaragua, Syria and Venezuela.

Ahmadinejad last visited Venezuela in September, his third trip to the
country.

                          ***

Dollar rifts deepen at Opec

By Ed Crooks and Javier Blas

The Financial Times - November 19, 2007
http://www.ft.com/cms/s/0/5998142c-9640-11dc-b7ec-0000779fd2ac.html

Opec agreed yesterday to keep talking about the effects of the weak US
dollar in an effort to bridge deep divisions exposed at the oil
cartel's summit in Riyadh.

Ministers from Opec countries are expected to meet in the next few
weeks to study further the effect of the falling dollar on their
economies.

Iran and Venezuela, the two Opec countries most hostile to the US, have
pushed for the cartel to consider pricing oil in currencies other than
the greenback.

Saudi Arabia, the summit's host, has opposed the move, and fought to
keep any mention of the dollar out of the summit's closing declaration.

Mahmoud Ahmadi-Nejad, Iran's president, said after the leaders' meeting
that the falling dollar meant oil producers were subsidising the US.
"They get our oil and give us a worthless piece of paper," he said. "We
all know that the US dollar has no economic value," he said.

Hugo Chávez, Venezuela's president, said: "The fall of the dollar is
not the fall of the dollar, it's the fall of the North American empire;
we have to be prepared for that."

The dollar has dropped 16 per cent this year against a basket of major
currencies, and 44 per cent against the euro since the last Opec summit
in Caracas, Venezuela, in 2000. Iranian officials have said the average
price of a barrel of their oil so far this year is, at $63, only $2
higher than for the same period of 2006. Priced in euros, oil has been
cheaper this year than last.

The leaders agreed to "instruct our petroleum/energy and finance
ministers to study ways and means of enhancing financial co-operation
among Opec member countries, including proposals by some of the heads
of state and government in their statements to the summit."

On Friday, Prince Saud Al-Faisal, Saudi Arabia's foreign minister,
warned that the dollar could "collapse" if the US currency was
mentioned in the declaration. His remarks - made in what was supposed
to be a closed ministerial meeting - were accidentally broadcast to
reporters.

After the summit, Prince Saud played down the significance of the
ministers' further examination of the dollar problem, saying they would
concentrate on wider global financial turmoil.

He added: "Everybody is very anxious in the international
community . . . Hopefully we can find a way to safeguard our economies
in these uncertain times."

Iran's and Venezuela's proposal would not necessarily drive the dollar
down. Iran notionally prices most of the oil it sells in euros, but in
practice receives a dollar price in world markets.

But a move by Opec away from the dollar would be taken in financial
markets as a signal that member countries might shift their holdings of
foreign exchange reserves away from the US currency. It would also mean
the price of oil in dollar terms would rise as the dollar fell.

The dispute over the dollar reflected the differences between leaders
who are united by little other than their oil reserves.

Mr Chávez gave a speech calling for a "revolutionary Opec" that
contrasted sharply with King Abdullah of Saudi Arabia's promises of
support for the world economy.

The declaration focused on the issues on which the leaders could agree:
principally the need to secure the long-term place of oil in the world
economy by assuring consumer countries that supplies will be available
to meet their needs, and addressing the effects of oil and other fossil
fuels on climate change.

                          ***

OPEC to Put $750 Million Toward Climate Research

By Steven Mufson

The Washington Post - November 19, 2007
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/18/AR2007111801079.html

RIYADH, Saudi Arabia, Nov. 18 -- With crude oil prices at $100 a barrel
and much of the world clamoring for relief, the Organization of the
Petroleum Exporting Countries ended a two-day summit Sunday by pledging
$750 million for research into climate change technology but without
making any commitment to increase oil output at this time.

The group's final declaration was overshadowed by an explosion at a
Saudi natural gas pipeline, where officials said maintenance work was
being done, and by a news conference Sunday in which Iranian President
Mahmoud Ahmadinejad warned the United States that "if someone has the
audacity to want to harm Iran, the response by Iran will make them very
sorry."

But Ahmadinejad said he did not expect any conflict because he did not
think that the United States could take such action. He discounted such
talk as a sign of U.S. frustration with what he called its "failure" in
the region.

The Iranian leader also dismissed U.S. economic sanctions against Iran,
saying that the most recent measures taken against leading Iranian
banks and companies controlled by the Revolutionary Guard would have
little effect on the country. "The Americans are only sanctioning
themselves and European companies," he said.

Saudi Arabia's foreign minister, Prince Saud al-Faisal, recently tried
to defuse the dispute between Iran and Western powers over Iran's
nuclear program. In an interview with the Middle East Economic Digest,
Faisal proposed that a consortium of Persian Gulf states build a
uranium enrichment plant outside the Middle East, possibly in
Switzerland, to supply nuclear fuel to nuclear plants across the region.

Ahmadinejad politely said that "we welcome any constructive proposals,
especially when they are given to us by our brothers and friends" and
said that Iran would "study such proposals closely." But he added that
"from our point of view, the issue of Iran's nuclear program is
finished." He said that "the Americans have to come to terms with this
new reality."

Saudi and OPEC officials did their best to prevent the summit from
becoming a platform for politics. Residents of Riyadh were given the
days off, and normally congested roads of the Saudi capital were quiet.
The OPEC leaders' working lunch Sunday was relatively brief and closed
to observers.

"It is an economic organization," said OPEC Secretary General Abdullah
al-Badri. He said that when he was Libya's oil minister years ago,
political issues jumped to the front of OPEC meetings. But he said that
for the past several years the meetings have focused on supply and
demand.

"If they want to change to something else, this is up to the member
states to change it," he said.

At the last OPEC summit in Caracas, Venezuela, in 2000, member
countries decided their leaders should meet more often, and Saudi
Arabia agreed to host this summit. The date had been set for months,
long before oil prices mounted their latest ascent to about $95 a
barrel.

But with prices high, OPEC officials spent the week asserting that oil
inventories were ample and that financial investors and speculators
were driving up the price. They urged Western regulators to make oil
markets such as the New York Mercantile Exchange more transparent.

"It's not a shortage of supply," Badri said. He said OPEC above all
wanted prices to be stable.

                          ***

OPEC summit ends in division over weak dollar

By Souhail Karam and Simon Webb

Reuters via The Washington Post - November 19, 2007
http://www.washingtonpost.com/wp-dyn/content/article/2007/11/18/AR2007111800824.html

RIYADH (Reuters) - An OPEC summit ended on Sunday in sharp political
division over whether to take action over the weak dollar, as heads of
state vowed to keep providing Western consumers with an "adequate"
supply of oil.

A fall in the value of the U.S. dollar on global markets helped fuel
oil's rally to a record $98.62 on Nov 7 -- causing Western consumer
nations to call for more OPEC supplies to cool prices -- but it has
also eroded the purchasing power of OPEC members.

The final statement of the oil cartel's summit in Riyadh did not
include any reference to the dollar's predicament, in an apparent
victory for U.S.-allied moderates led by Saudi Arabia.

But Iran and Venezuela -- anti-U.S. firebrands locked in tough
diplomatic disputes with Washington -- made clear before and after the
summit that they would press for action, which could include pricing
oil in a basket of currencies.

Such a move would be a political blow to the United States, whose
currency Iran's President Mahmoud Ahmadinejad told reporters had become
a "worthless piece of paper."

Fears the United States or its ally Israel could attack Iran -- over a
nuclear energy program Washington says is a cover for seeking atomic
weapons -- have helped drive world oil prices to record levels. Tehran
denies the charge.

Iraqi Finance Minister Bayan Jabor told Reuters after the summit's
close that, backed by Ecuador, the anti-U.S. powers won agreement that
finance ministers would discuss the issue before a scheduled oil
ministers meeting in Abu Dhabi on December 5.

"There was a proposal from Iran and Venezuela to have a basket of
currencies for the pricing of OPEC oil. But a consensus could not be
reached (in the summit)," he said.

"Because the final communique was already drafted, there was an
agreement that OPEC finance ministers hold a meeting before the oil
meeting in the UAE in December to discuss economic issues including the
dollar's exchange rate," he added.

OPEC oil ministers said last week any decision on raising output will
be left to the Abu Dhabi meeting in two weeks time.

"We affirm our commitment ... to continue providing adequate, timely
and sufficient oil to the world market," said the final declaration
issued at the two-day summit's close.

SAUDI BACKS THE GREENBACK

Talks on the dollar were actively discouraged by Saudi Arabia, an old
U.S. ally that has traditionally assured the West of easy oil supplies
through its OPEC "swing producer" status.

On Friday, Foreign Minister Saud al-Faisal was seen in a closed session
-- accidentally beamed to reporters by closed- circuit television --
arguing against putting the question in the communique lest it backfire
and weaken the currency further.

At the summit's opening session on Saturday, Venezuela's President Hugo
Chavez vaunted OPEC's ability to ensure high oil prices for developing
producer nations, partly as recompense for perceived Western injustices
toward the rest of the world.

Addressing leaders assembled in an opulent hall with crystal
chandeliers and toilet accessories fitted in gold leaf, the self-styled
socialist revolutionary said OPEC "must stand up and act as a vanguard
against poverty in the world."

And he threatened that if Washington follows through on military
threats against Iran, oil could double to $200 a barrel. Ahmadinejad
said on Sunday Iran would not use oil as a weapon if attacked.

King Abdullah, the octogenarian Saudi leader, sat stone-faced
throughout the 25-minute diatribe, joking afterward to the anti
colonial-era firebrand: "You went on a bit!"

"Oil is an energy that is about construction and development and should
not be turned into a tool of dispute and whimsy," the Saudi monarch
said in a brief speech.

The summit -- only the third in the group's history -- also
acknowledged the oil industry's role in global warming, with pledges of
cash for research into climate change.

Saudi Arabia said it would give $300 million, and Kuwait, Qatar and the
United Arab Emirates each pledged $150 million toward research on the
environment.

But even there, clear differences emerged, as other countries were
reluctant to make similar promises.

"We are not committing anything. We don't know what the proposal is,"
Algerian Energy Minister Chakib Khelil said.

Ecuador's leftist President Rafael Correa -- a Chavez ally -- told
reporters the world's richest nations should pay for the protecting the
environment in the world's poorest countries.

"It annoys us a bit, all this moralizing 'don't cut down your trees'
from the first world, when they've already done it," he said. "If
Europe wants to breathe pure air from Amazon countries then Amazon
countries shouldn't have to pay for it."

(Writing and additional reporting by Andrew Hammond, editing by Maureen
Bavdek)

                          ***

OPEC's Divisions Rise to Surface

By Neil King Jr.

The Wall Street Journal - November 19, 2007
http://online.wsj.com/article/SB119540003688497117.html?mod=googlenews_wsj

RIYADH, Saudi Arabia -- Sky-high crude-oil prices are fueling an
economic boom here and in other oil capitals at the same time they are
reigniting old divisions within OPEC and stirring fresh doubts about
the future role of the world's premier oil-supply cartel.

The oil czars of the 13-member group, who met for a rare heads-of-state
summit here over the weekend, have enjoyed an extraordinary run-up in
crude prices over the past eight years that so far has done
surprisingly little to blunt either the global economy's run of growth
or its thirst for oil.

But myriad anxieties have bubbled up during this weekend's talks on
fronts ranging from global warming and the weakness of the dollar to
the cartel's own ability to exert muscle over a fickle oil market
subject to increasing fund flows from Wall Street. Ministers and their
deputies, eyeing signs of an economic slump in the U.S., also appeared
reluctant to answer calls in the West for increased supplies when they
meet at an OPEC policy meeting early next month.

For all their perceived clout, leaders of the Organization of Petroleum
Exporting Countries stressed how powerless they are to affect oil
prices, which have swung this year from a settlement low of about $50 a
barrel in January to a closing high of $96.70 this month. On Friday,
the December contract for light, sweet crude oil closed at $95.10, up
$1.67 on the New York Mercantile Exchange.

Several ministers, along with OPEC Secretary-General Abdalla Salem
el-Badri, called for studies into the sway that investment funds have
over the oil market. Officials suggested ways should be found to
mitigate the influence of the financial markets over crude prices.
There was little, however, in the way of concrete proposals.

Recent price fluctuations, Mr. Badri said in an interview, were due to
"oil becoming a financial asset," while OPEC's leverage is limited.
"All we can do is oversupply the market or undersupply the market," he
said. The latter is certainly true. But OPEC, which supplies some 40%
of the world's oil, has a much tougher time pushing production higher.
Only Saudi Arabia is known to have significant spare capacity on hand.

OPEC leaders and ministers have differed on whether current prices are
justified. Saudi Oil Minister Ali Naimi, the cartel's de facto leader,
suggested he would prefer to see prices come down, and his counterpart
in the United Arab Emirates, Mohammad al-Hamli, called current price
levels "potentially dangerous." The Venezuelans and Iranians, however,
defended recent prices as fair.

A state dinner hosted Saturday night by Saudi King Abdullah offered a
gilt-edged backdrop for another long-festering debate: Should the
47-year-old cartel serve mainly as steward of the world's economy or as
a political champion for developing countries?

Venezuelan President Hugo Chávez called for a return of the 1970s-style
"revolutionary OPEC." The group, he said in a speech before the dinner,
must stand up to industrialized powers like the U.S. and become "a much
stronger player in the geopolitical arena."

Saudi Arabia, the cartel's driving force and the world's single largest
oil exporter, has worked hard in recent years to strip OPEC of its
inner bickering and political grandstanding and to turn it into a more
professional organization. None of the Gulf oil powers want to revive
the old feuds between oil producers and consumers.

So it was little surprise that King Abdullah calmly combated Mr.
Chávez's view, telling the assembly of presidents, ministers and
royalty that OPEC "has always acted moderately and wisely." Oil, he
said, "shouldn't be a tool for conflict."

Still, Venezuela has its ideological supporters in both Iran and
Ecuador, which returned to the OPEC fold this weekend. Ecuador's
president, Rafael Correa, told reporters that "OPEC needs a political
vision to manage a strategic resource."

In his remarks yesterday to reporters, Iranian President Mahmoud
Ahmadinejad railed against the unnamed powers that have "plotted very
complex plots to loot the energy resources of other nations."

Mr. Chávez predicted that if the U.S "was crazy enough" to attack Iran
in coming months because of Iran's refusal to halt its nuclear program,
oil prices would hit $200 a barrel. But Mr. Ahmadinejad yesterday said
he didn't believe there would be a military conflict between the U.S.
and Iran.

One looming skirmish, which was successfully put off by the Saudis,
concerns the future role of the U.S. dollar as the central currency in
the oil trade. Venezuela and Iran pushed here to raise concerns over
the dollar in the summit's final communiqué. Saudi Foreign Minister
Saud al-Faisal rebuffed the effort, saying in a closed meeting of
ministers that "the mere mention that the OPEC countries are studying
the issue of the dollar" could have a damaging impact on the value of
the dollar.

Oil countries have expressed concerns recently that the falling dollar
has eroded their earnings and foreign-currency reserves. In the end,
the group agreed to turn the subject over to a working group of finance
ministers. The issue could return early next month, when OPEC oil
ministers meet for a formal policy session.

OPEC leaders did agree to make a nod toward growing concerns over
global warming and fossil-fuel emissions. Saudi Arabia and three of its
Gulf neighbors -- United Arab Emirates, Qatar and Kuwait -- put a total
of $750 million into a fund to support research into technology to take
emissions out of the atmosphere and inject them back into the earth.
That technology is in its infancy.

                              ***

Critics Assail Weak Dollar at OPEC Event

By Jad Mouawad

The New York Times - November 19, 2007
http://www.nytimes.com/2007/11/19/business/19opec.html

RIYADH, Saudi Arabia ? A rare meeting of the heads of state of the OPEC
countries ended here today on a political note, with two leaders ?
President Hugo Chávez of Venezuela and President Mahmoud Ahmadinejad of
Iran ? blaming the weakness of the United States dollar for high oil
prices.

Despite the best efforts of the host country, Saudi Arabia, to steer
the meeting away from politics and promote OPEC's environmental
concerns, the leaders of Venezuela and Iran let loose some
show-stealing statements.

"The dollar is in free fall, everyone should be worried about it," Mr.
Chávez told reporters here. "The fall of the dollar is not the fall of
the dollar ? it's the fall of the American empire."

During a news conference after the meeting, Mr. Ahmadinejad added: "The
U.S. dollar has no economic value."

Mr. Ahmadinejad said that oil, which was hovering last week at close to
$100 a barrel, was being sold currently for a "paltry sum." And Mr.
Chávez predicted that prices would rise to $200 a barrel if the United
States were "crazy enough" to strike at Iran, or even at his own
country.

Normally, meetings of the Organization of the Petroleum Exporting
Countries are tepid affairs where ministers leave politics at the door
and talk about oil inventory and supply and demand. This unusual
meeting, held amid the pomp and glitter of the Saudi royal court, had
been planned since last December but happened to fall at a time of
renewed concern over record oil prices and the shrinking value of the
dollar.

At the summit's opening ceremony on Saturday, Mr. Chávez sought to
bring OPEC back to its militant and revolutionary roots.

"OPEC should set itself up as an active political agent," Mr. Chávez
said, addressing about 1,000 guests in a conference center by the royal
quarters.

While Mr. Chávez's 23-minute statement was brief by his own standards,
it drew a gentle rebuke from King Abdullah, the Saudi monarch, who
chided him for talking longer than the time allotted by royal protocol.
He also turned down Mr. Chávez's plea, saying: "Those who want OPEC to
take advantage of its position are forgetting that OPEC has always
acted moderately and wisely."

It is only the third time in OPEC's 47-year history that such a
high-level meeting has taken place. The first was in Algiers, in 1975,
at the height of OPEC's nationalist period; the second was in 2000,
when the oil cartel met in Venezuela to devise a strategy to increase
prices after they had collapsed to about $10 a barrel in the late 1990s.

This meeting, which lasted less than 24 hours, was supposed to focus on
long-term issues like the security of supplies and environmental
policy. The Saudis in particular sought to reassure the world that OPEC
was a reliable oil supplier.

"OPEC has made a point, from its establishment, to work for the
stability of the oil markets," said the Saudi foreign minister, Prince
Faisal, at a news conference after the close of the summit on Sunday.
"Oil should be a tool of construction and development, not one of
dispute."

Saudi Arabia also wanted to highlight a new emphasis on protecting the
environment by announcing the establishment of a $750 million fund to
reduce carbon emissions. The kingdom will contribute $300 million for
research into technology that captures carbon spewed by power plants or
refineries and stores it underground. In addition, Kuwait, the United
Arab Emirates, and Qatar will provide $150 million each.

Oil producers see climate policies that focus on oil consumption as an
unfair way to curb the use of fossil fuels worldwide. By financing
research into carbon emissions, Saudi Arabia says it is seeking ways to
extend the use of petroleum resources at a time when global warming
could lead to changes in consumer behavior in Western countries.

"We want to continue using fossil fuels while protecting the
environment," said Mohammad al-Sabban, a senior Saudi government
adviser on climate change. "What we are worried about is for
industrialized countries to use climate policy as a pretext to
discriminate against oil."

Other ministers also expressed the more moderate views that typically
emerge from an OPEC meeting. Despite Mr. Ahmadinejad's statement about
oil prices being paltry, officials from several other countries ?
including the United Arab Emirates, Nigeria and Saudi Arabia ? said
that prices were too high.

"We are going down uncharted territory, and everyone should be
cautious," said Odein Ajumogobia, Nigeria's oil minister, referring to
the current prices.

The weakness of the dollar proved to be even more controversial here
and created frictions among members of the group. Iran ? with the
backing of Venezuela and OPEC's newest member, Ecuador ? worked hard to
persuade the group that it should mention the falling dollar in the
summit's final declaration.

But Saudi Arabia rejected Iran's proposal, saying that such a move
might provoke a "collapse" of the dollar. During a closed session on
Friday that was mistakenly broadcast on an internal television circuit,
Prince Saud al-Faisal said the issue was too delicate to be included in
a statement.

In the end, the Saudis were forced to yield a little. The final
statement, while making no mention of the dollar, said OPEC would
"study ways and means of enhancing financial cooperation among OPEC
member countries."

According to Iran, OPEC will also look for ways to establish a currency
basket to offset the declining value of the dollar. But Saudi Arabia
and other Persian Gulf countries are opposed to this old idea, and few
analysts believe it has any chance of succeeding.

It is too early to say whether the views expressed by Mr. Chávez and
Mr. Ahmadinejad signaled a rift in the exceptional consensus that has
sustained OPEC's success in recent years, or whether they were merely
an example of conference theatrics by countries at odds with the
American government. In the end, it fell to Ali al-Naimi, the Saudi oil
minister, and the main architect of OPEC's focus on business
fundamentals in recent years, to underline the conference's main
message.

"Everyone knows that OPEC has renounced the principle of controlling
oil prices since the 1980s," Mr. Naimi said at a news conference on
Sunday. "Since then, the price has been determined by the market. The
fluctuations you are witnessing today have nothing to do with OPEC
actions."

The meeting was held in a conference center that was a gaudy mix of the
palace at Versailles and Greek Revival style, with some rococo touches.
It also displayed the whole range of Saudi extravagance: blue marble
floors, gold-plated fixtures, and dozens of crystal chandeliers, some
bigger than trucks.

Vera de Ladoucette, an energy analyst with the Cambridge Energy
Research Associates who was here to observe the summit, said: "This
shows a new dimension to OPEC, which is the environment. This could be
a defensive stance to improve their image. But also, a way of acting
against anything that might reduce demand for oil."

                            ***

OPEC Gathering Finds High Oil Prices More Worrisome Than Welcome

By Jad Mouawad

The New York Times - November 17, 2007
http://www.nytimes.com/2007/11/17/business/17opec.html

RIYADH, Saudi Arabia, Nov. 16 ? As oil prices hover around $95 a
barrel, OPEC might be expected to celebrate. Its members are reaping
record revenues, demand for their product keeps rising and the world
economy seems capable of sustaining oil prices that would have seemed
unthinkable a few years ago.

But the oil-producing group faces an increasingly uncertain
environment, one that is casting a pall over an OPEC gathering here.
Fears are rising that high oil prices will help throw the global
economy into recession. The dollar, the currency usually used in oil
trading, is falling, and concern is growing in many quarters about the
effect of fossil fuels on the planet's climate.

In short, as leaders of the Organization of the Petroleum Exporting
Countries meet in the capital of Saudi Arabia for a rare summit meeting
this weekend, high prices and rising consumption are seen even within
OPEC as a mixed blessing.

"These prices are potentially dangerous, especially if they remain
high," said Mohamed bin Dhaen al-Hamli, the oil minister for the United
Arab Emirates. "We cannot remain complacent."

In recent days, oil ministers have resisted calls to increase output
and ruled out any changes until the next meeting, scheduled for Dec. 5
in Abu Dhabi. Saudi Arabia in particular is eager not to overshadow
this weekend's gathering with a discussion about supplies and prices.

At the same time, Saudi officials were relieved to see oil fall from
its record close of $96.70 a barrel, set last week. No one here wanted
to see prices reach the politically charged figure of $100 just as OPEC
leaders were meeting in Riyadh. Oil futures, which have more than
tripled in price in four years, closed at $95.10 a barrel in New York
on Friday.

The two-day meeting will focus on such issues as security of supplies
and environmental policy. OPEC is eager to show it is both a reliable
oil supplier that has not failed its customers and that it is attuned
to concerns about the environment, especially ahead of a United Nations
meeting on climate change next month in Bali. The group wants to begin
an environmental initiative focusing on ways to capture and store the
carbon dioxide that results from burning fossil fuels, instead of
releasing it into the atmosphere.

"We do not like policies that discriminate against petroleum or fossil
fuels in general," Ali al-Naimi, the Saudi oil minister, said during a
news conference on Tuesday. "It behooves us to find a technological
process that will make the continued use of fossil fuels possible."

OPEC's 12 members, an eclectic group that includes Libya, Nigeria,
Saudi Arabia and the latest member, Angola, account for about 40
percent of the world's oil exports and 80 percent of its proven
reserves. Ecuador is set to rejoin the group this weekend after
dropping out of OPEC in the 1990s.

President Hugo Chávez of Venezuela is becoming increasingly vocal in
his calls for OPEC to revert to its more militant position of the
1970s. This week, Mr. Chávez proposed that OPEC devise a plan to sell
oil to poor countries at much lower prices while charging wealthy
nations more. The cartel, he said, should "raise its level of political
action." Such language does not go over well with Saudi officials, who
are worried about Mr. Chávez's presence here.

Hossein Adeli, the chairman of the Ravand Institute for Economic and
International Studies, in Tehran, said there would always be a
temptation to bring politics into OPEC. "Oil and gas are the most
political commodities in the world," he said.

Unlike Mr. Chávez, most members of the cartel are annoyed by their
inability to rein in an oil market heavily influenced by financial
operators, like hedge funds and pension funds.

"We are so perplexed and so frustrated with the idea we have anything
to do with these prices," said Prince Abdel Aziz bin Salman, the deputy
petroleum minister of Saudi Arabia.

OPEC countries have indeed benefited immensely from the surge in oil
prices. The 12 members are expected to receive $658 billion in revenue
this year, up from $605 billion last year, according to a recent
estimate by the Energy Information Administration. Next year, their
revenue could rise to $762 billion, according to the energy agency.

At the same time, the price of everything from drilling rigs to
multibillion-dollar processing plants for oil or natural gas has double
or tripled, and caused project delays or cancellations. In Kuwait, a
plan for a new refinery was shelved after the expected construction
cost jumped to $14 billion from $7 billion.

"The rise in prices has been a nightmare for producers," said Abdullah
bin Hamad al-Attiyah, Qatar's energy minister.