Word: opec
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...OPEC struggles to avoid a price war, gold sinks and Wall Street soars
...feuding members of the Organization of Petroleum Exporting Countries, the time had come for another showdown. Oil ministers from eight of the 13 OPEC countries gathered last week in London's elegant Grosvenor Square at a five-story, red-brick Georgian mansion where the delegate from the United Arab Emirates, Sheik Mani Said al-Oteiba, maintains his residence. The meeting had an urgent mission: agreement on a pricing pact and a set of production quotas that would keep the cost of oil from tumbling uncontrollably. Over the previous weekend Saudi Arabia and its Persian Gulf neighbors had issued...
After two days of wrangling, the ministers adjourned and invited delegates from the other five OPEC countries to join the meeting this week. Saudi Oil Minister Sheik Ahmed Zaki Yamani reportedly said, "I think we will have an agreement." Others, though, were skeptical. Said William Brown, di rector of energy studies at the Hudson Institute, north of New York City: "They will meet. They will talk. They may even agree. But they will go home and violate whatever agreement they reach...
...growing probability that OPEC has lost its grip on oil prices threw the financial markets into turmoil. Gold, a favorite inflation hedge, plunged to $408.50 per oz., down nearly $100 in eleven days, before rebounding a bit to $415 at week's end. On Wall Street, the prospect of a brisk economic recovery unleashed another stampede in the stock market. The Dow Jones industrial average closed at record highs on four consecutive days, finishing the week at an alltime peak...
...share in the rise. Atlantic Richfield, for example, which has enormous reserves of Alaskan crude, dropped 2% during the week. The four U.S. partners in Aramco, which pumps most of Saudi Arabia's crude, held up better than the rest. The reason: any cut in the official OPEC price will help end the squeeze that the four-Exxon, Standard Oil of California, Mobil and Texaco-have suffered as the spot oil price (see chart) has fallen below the $34 that they now pay the Saudis...