If war starts - well, US stock can fall more, cause no one thinks its Afghan invasion can be that successful - and it can spark more terros at US or elsewhere. And it is forecasted that 'global recession' can be hard enough 'no one really needs oil' - so price can fall, even supply go unstable or reduced. (Opec promises it will keep supply meeting upto demand.) That bad? - it looks day by day, it's goin bad, at almost everywhere. By Thursday or this weekend, US's action can be decisively taken. ---------------------------------------------------------------------- http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3YZBIAQRC&live=true&tagid=IXLI0L9Z1BC US attacks may trigger drop in oil price says CGES By Matthew Jones in London Published: September 17 2001 14:21 | Last Updated: September 17 2001 16:29 Last week's terrorist attacks on the US are more likely to lead to falling oil prices than the escalating prices experienced during the Gulf War, according to an analysis by the London-based Centre for Global Energy Studies. Crude oil prices last week added almost $4 a barrel in the immediate aftermath of the bombings to more than $31 before slipping back to about $29 on Friday. However, the CGES said on Monday the attacks posed a greater risk to the demand side of the oil balance than the supply side because of the expected adverse effect on the global economy. "Economic recovery will almost certainly be delayed and the world is likely to slip into a global recession. The implications for oil demand are dire, even if the economy begins to recover as early as the third quarter of 2002," it said. The analysis came ahead of the reopening of the New York Stock Exchange for the first time since two hijacked jets destroyed the World Trade Centre last Tuesday. Equity markets across Europe continued to slip on Monday morning as traders braced for an expected fall of up to 10 per cent in the Dow Jones industrial average. The CGES said its worst case scenario was that global oil demand would weaken by 0.8 per cent year-on-year to 77m b/d in the fourth quarter, followed by a 0.3 per cent decline in the first quarter of 2002. The market for aviation fuel was expected to be particularly badly hit, with demand forecast to fall by as much as 400,000 b/d over the winter due to a reduction in commercial air travel. This would only be partially offset by any increased US and allied military action. The Organisation of Petroleum Exporting Countries, the cartel that includes many Middle Eastern oil producers, last week said it would seek to minimise the impact of any supply interruptions by pumping more oil into the market. The CGES said this could mark a shift by Opec from an implicit policy of varying supply to keep prices above $25 a barrel to allowing prices to fall within its formal target range of $22-$28 a barrel. CGES analysis reflects remarks made by other oil economists last week. Traders, however, remained jittery on Monday morning about the prospect of US military retaliation for the attacks and the impact this could have on supply, particularly if Iraq decided to halt exports. In morning trading in London, Brent crude prices for November delivery rose 37 cents to $29.80 following reports that Pakistan and Afghanistan were deploying troops along their borders. --------------------------------- Akio Fujita A.Fujita@xxxxxxxxxxxxxx