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Greenspan: Storm impact on oil has peaked
(Reuters)
Updated: 2005-09-26 09:34
US Federal Reserve Chairman Alan Greenspan told Russian Finance Minister
Alexei Kudrin that risks to the oil market from a pair of U.S. hurricanes have
peaked, and pressure on refineries should ease, the Russian minister said on
Sunday, reported Reuters.
Kudrin said Greenspan, in bilateral talks on the sidelines of semi-annual
meetings of the World Bank and International Monetary Fund, did not say outright
that he expected oil prices to drop, but signaled the worst of the squeeze might
be over.
"Greenspan believes that now we've overcome all the peaks of the risks of
those storms ... (and) Katrina and Rita have exhausted their influence on the
oil market already," he told a small group of reporters through a translator.
Oil prices fell about $1 a barrel on Sunday after Hurricane Rita, the second
major storm to hit the U.S. Gulf Coast in a month, did less damage to oil
refineries than first feared.
Markets had fretted the storm would bring prolonged energy shortages and
compound the damage from Hurricane Katrina, which pushed oil prices to a record
$71 a barrel in August.
Greenspan, in his discussions with Kudrin, said he thought the situation at
U.S. refineries "is going to be easier" now that the storms have passed.
Kudrin also met Afghan officials in Washington to discuss a deal over the
bilateral debt Kabul owes Moscow.
"We are in a course of very tough and very difficult discussions to
restructure the debt, and possibly write off some," he said. "We have not found
a solution yet."
Asked if Russia could join the World Trade Organization by the end of 2005,
Kudrin said membership would take more time.
"Definitely it's going to happen later," the finance chief said. If Russia
strikes the prerequisite deals with countries including the United States by
December, he said it would likely take another six months to finalize accession.
The Bank of Italy's Antonio Fazio (Bottom L)
with U.S. Federal Reserve Chairman Alan Greenspan and Russian Finance
Minister Aleksey Kudrin (Top L) with Jean-Claude Juncker, prime minister
of Luxembourg, pose for a group photo outside the Treasury Department in
Washington after a G7 finance ministers meeting September 23, 2005.
[Reuters] | Turning to the global economy, Kudrin said world leaders needed to work
together to resolve looming vulnerabilities.
"Currently, for the United States, this is the cycle of growth but risks also
do exist," he said.
Commenting on China's move to scrap its yuan currency's peg to the dollar and
switch to a managed float with reference to a basket of currencies, Kudrin said
more flexibility in the yuan was best for China and its Asian neighbors.
He said it was inappropriate for governments to intervene in oil markets to
counteract recent price gains, stressing the private sector could respond to
current demands in time.
Oil-producing Russia has difficult decisions to make about how to balance the
windfall from energy price rises and longer-term needs for economic overhaul and
diversification, Kudrin said.
"Easy access to resources (can be) a disincentive to diversification," he
said, adding: "Russia currently faces this kind of choice."
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