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EU/OPEC: OPEC HEAD FORESEES PRICE COLLAPSE IN 2002.

"If the current situation continues, there will be a price collapse in =the second quarter of 2002," predicts Ali Rodriguez. He was referring to =the three elements that, in his opinion, are currently putting pressure =on prices: worldwide economic recession, reduced demand and over-supply =of petrol. For him, the growth in demand for 2001 is somewhere between =zero and 100,000 barrels per day (b/d): that is, in fact, falling =demand. "And it could happen again next year," he added.Message to the Russians.That is why Mr Rodriguez wants to be "proactive" so that today's =sacrifices are voluntary, rather than "forced by circumstances" once =prices have dropped too far. He said that he had asked to meet the =Russians with a high-level delegation, but that he had not yet received =their response. "It's a sovereign country, we respect its decision", he =declared. However, without the agreement of the Russians to reduce =production by 200,000 b/d, from the current 50,000 b/d reduction, OPEC =countries will not reduce their daily production by the 1.5 million b/d =necessary to maintain prices.A reasonable price.For its part, the EU has stuck to its position: "when the price of =petrol was USD30, Commissioner Loyola de Palacio said that a reasonable =price was USD20. Now the price is USD17, she has not changed her =position," said her spokesperson. Mrs de Palacio reiterated that the =Commission's priority is price stability. "It is of the utmost =importance to fight against erratic price swings and everything must be =done to guarantee price stability" she said following a meeting with Ali =Rodriguez. For her, too low a price would not be "good news": it would =lead to major currency fluctuations and also complicate the =implementation of policies made necessary by measures to reduce fuel =emissions, such as the promotion of renewable energy or energy =efficiency.Mrs de Palacio once again thanked OPEC for its responsible attitude =following the September 11 attacks, that have helped to avoid any sudden =price rises. "We confirm our commitment to ensure supply, independently =of political and military events that are taking place in the world at =this time," said Mr Rodriguez during a dinner debate at the European =Parliament.

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Title Annotation:Ali Rodriguez
Publication:European Report
Article Type:Brief Article
Date:Dec 5, 2001
Words:373
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