Wizdom
09-02-08, 23:06
OPEC Chief Hints at Switch to Euro
DUBAI, Feb 9--OPEC could switch the pricing of oil from dollars into euros within a decade, secretary general Abdullah al-Badri has told a weekly magazine.
The Organization of the Petroleum Exporting Countries could adopt the euro to combat the decline of the dollar, Badri told the Middle East Economic Digest (MEED), published in London.
He said that OPEC may abandon the dollar for pricing oil and adopt the euro but any such switch will "take time".
A decline in the dollar has eroded oil exporters' purchasing power, prompting some members of OPEC to call for a switch away from the US currency.
Badri's remarks sent the dollar lower against the euro on Friday.
"Maybe we can price the oil in the euro. It can be done, but it will take time," he said.
MEED recalled that OPEC is under pressure from its members, who have seen their earnings decline sharply since 2000 due to its use of the dollar.
The US currency has fallen 44 percent in value against the euro in that time.
The publication of Badri's remarks coincided with the euro rising against the dollar on the foreign exchanges Friday. The euro peaked of $1.4547 at around 1800 GMT, though it has since weakened.
"In oil exchanges in New York, Singapore or Dubai, you can see the currency is the euro or the yen," Badri said.
Some OPEC members, notably Iran and Venezuela, have been calling for the group to study the declining dollar's effect on their economies. Iran has already begun pricing most of its oil in euros.
MEED recalled that the pricing of oil in dollars is a sensitive topic. Saudi Arabia's Foreign Minister Prince Saud al-Faisal warned OPEC late last year that the dollar could plunge if OPEC publicly discussed abandoning it.
On Tuesday, Badri told reporters in London that several oil exporters were selling in dollars but buying other commodities in euros, calling the latter a strong currency.
Crude-oil futures rose for a second day on Friday, surging more than 4% to approach $92 a barrel, as some delegates of OPEC said the organization should cut production to shore up prices, and as production disarrays in North Sea and Africa continued.
Crude for March delivery rallied $3.69, or 4.2%, to $91.80 a barrel on the New York Mercantile Exchange in late afternoon trading Friday. The market hasn't seen such a big daily gain since October. It rose nearly $1 in the previous session.
DUBAI, Feb 9--OPEC could switch the pricing of oil from dollars into euros within a decade, secretary general Abdullah al-Badri has told a weekly magazine.
The Organization of the Petroleum Exporting Countries could adopt the euro to combat the decline of the dollar, Badri told the Middle East Economic Digest (MEED), published in London.
He said that OPEC may abandon the dollar for pricing oil and adopt the euro but any such switch will "take time".
A decline in the dollar has eroded oil exporters' purchasing power, prompting some members of OPEC to call for a switch away from the US currency.
Badri's remarks sent the dollar lower against the euro on Friday.
"Maybe we can price the oil in the euro. It can be done, but it will take time," he said.
MEED recalled that OPEC is under pressure from its members, who have seen their earnings decline sharply since 2000 due to its use of the dollar.
The US currency has fallen 44 percent in value against the euro in that time.
The publication of Badri's remarks coincided with the euro rising against the dollar on the foreign exchanges Friday. The euro peaked of $1.4547 at around 1800 GMT, though it has since weakened.
"In oil exchanges in New York, Singapore or Dubai, you can see the currency is the euro or the yen," Badri said.
Some OPEC members, notably Iran and Venezuela, have been calling for the group to study the declining dollar's effect on their economies. Iran has already begun pricing most of its oil in euros.
MEED recalled that the pricing of oil in dollars is a sensitive topic. Saudi Arabia's Foreign Minister Prince Saud al-Faisal warned OPEC late last year that the dollar could plunge if OPEC publicly discussed abandoning it.
On Tuesday, Badri told reporters in London that several oil exporters were selling in dollars but buying other commodities in euros, calling the latter a strong currency.
Crude-oil futures rose for a second day on Friday, surging more than 4% to approach $92 a barrel, as some delegates of OPEC said the organization should cut production to shore up prices, and as production disarrays in North Sea and Africa continued.
Crude for March delivery rallied $3.69, or 4.2%, to $91.80 a barrel on the New York Mercantile Exchange in late afternoon trading Friday. The market hasn't seen such a big daily gain since October. It rose nearly $1 in the previous session.