Response slow to price rise

by The Associated Press

With the price of oil flirting with $20 a barrel for the first time in 19 months, producers are waiting to see if prices stay put before resuming hiring. Michael Mayer, an analyst with Schroder & Co., said many jobs lost due to mergers will never be replaced.

Joseph Culp, an analyst with A.G. Edwards, said mergers such as Exxon-Mobil and BP Amoco-Atlantic Richfield indicate that majors have planned for low oil prices and won’t change their strategy now.

The recovery in oil prices has come as the Organization of the Petroleum Exporting Countries and other producers adopted substantial cuts in output and apparently stuck to them, and as Asian economies began to recover.

Many producers worry openly about the central role of OPEC, which until recently has failed to enforce oil-output limits on members.

In early July, Obeid bin Sief al-Nasseri, the United Arab Emirates oil minister, warned fellow OPEC members not to “exploit” the higher oil prices by stepping up production.

Many analysts, including Culp and Ken Miller of Houston energy consulting firm Purvin & Gertz, predict prices will settle in a range of $17-$20 a barrel.