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Crude oil prices decline
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October 13, 2000: 2:49 p.m. ET
Saudis said not to consider oil cutoff; U.S. firms say they'll keep oil at home
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NEW YORK (CNNfn) - Crude oil prices traded lower Friday after reports that Saudi Arabia would not consider suspending oil exports to punish U.S. support for Israel in its conflict with Palestinians.
Prices declined even more sharply later in the day after U.S. Energy Secretary Bill Richardson revealed that several American energy companies have agreed not to export their oil.
Brent Crude for December delivery fell 74 cents to $33.85 a barrel. On Thursday, the contract surged $2.80 to close at $34.47, after hitting a 10-year high of $35.30. U.S. light sweet crude for December delivery fell 51 cents to $35.05 a barrel in New York trading. The contract rose $2.48 to $35.72 Thursday.
Reuters quoted an undisclosed source "close to Saudi thinking" as saying that Saudi Arabia had no plans to cut oil supplies in the wake of the turmoil, nor had it discussed the issue with other Persian Gulf countries.
The United Arab Emirates, Saudi Arabia, Kuwait and others joined in 1973 to impose a mix of output cuts and export bans in response to Western countries' support for Israel in its war with neighboring Arab countries.
Tension remains high
"There were a few signs overnight that, although clearly tensions are rising, there is a window of opportunity for some peace settlement over the next three days," oil analyst Lawrence Eagles, at commodity brokerage GNI Research, said.
"The feeling is that maybe prices were a little overdone last night," he said.
But Eagles warned that if the fighting between Israeli forces and Palestinians continued and Arab oil-exporting countries decided to retaliate with an oil embargo, crude oil prices could top $100 a barrel.
 "There is clearly a risk that this is going to happen, however small that risk may be," Eagles said.
Israeli helicopters attacked targets with rockets Thursday near the offices of Palestinian Authority President Yasir Arafat in retaliation for the killing of two or more Israeli soldiers held captive by a mob of Palestinians in the West Bank.
The European Union was looking at the oil market's reaction to events in the region, an EU spokesperson said in Brussels.
Oil prices had jumped earlier Friday after a bomb exploded at the British Embassy in the Yemeni capital Sanaa. The previous day, an apparent suicide attack on a U.S. Navy destroyer in the Yemeni port of Aden killed at least seven American sailors, with another 10 missing and presumed dead.
Nearly 100 people, most of them Palestinians and Israeli Arabs, have been killed in two weeks of clashes between Israeli security forces and Arab protesters and gunmen.
Keeping U.S. oil at home
In the U.S., meanwhile, comments from U.S. Energy Secretary Bill Richardson helped push the price of oil lower Friday after he revealed that several major U.S. oil companies have agreed not to export heating oil under current market conditions.
The firms are Amerada Hess (AHC: Research, Estimates); Equiva Trading and Motiva Enterprises -- both joint ventures of Royal Dutch/Shell Group's U.S. unit Shell Oil, Texaco Inc. (TX: Research, Estimates) -- and Saudi Aramco. They voluntarily agreed to keep heating oil in the U.S. market for domestic consumption as supplies are tight heading into the winter, Richardson said.
"The four companies have volunteered, agreed not to export heating oil," Richardson told reporters after hosting a solar energy event at DOE headquarters.
Richardson also said there was no reason to believe that Middle East oil producers will cut their production in response to the current flare-up between Israelis and Palestinians.
However, if U.S. oil supplies are affected, Richardson said President Bill Clinton will consider every option to counter any supply disruptions, but he did not elaborate. He did not answer reporters' questions on whether the administration will release more oil from the Strategic Petroleum Reserve. 
-- from staff and wire reports
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