Crude prices jump on report that production might be curtailed

NEW YORK (Nov. 9, 2001) — Crude oil rose more than 5% after Saudi Arabia’s oil minister said OPEC may try to bolster prices by cutting output quotas to the lowest level since the Persian Gulf War.

OPEC’s goal is to defend oil prices, even if that means losing market share, Ali al-Naimi said at a conference in Morocco, Dow Jones Newswires reported. A crude oil index OPEC watches has dropped 33% since the Sept. 11 terrorists attacks as demand slumped from slowing world economies.

“He made it clear that for the Saudis and OPEC, price, not volume, is the most important issue,’ said Nauman Barakat, vice-president of global energy trading at ABN Amro Inc. in New York. Al-Naimi’s position “reduces the chance of a price war over market share.”

Crude oil for December delivery rose $1.08 US, or 5.4%, to $21.17 a barrel on the New York Mercantile Exchange, the biggest gain since Sept. 14, the first trading day after the attacks. Prices are down 36% from a year ago, when oil was rising toward a 10-year high of about $36 a barrel.