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Sat 9 Feb 2008 11:41 AM

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Opec may ditch dollar and price oil in euros

Secretary-general says switch is an option, but any such move will 'take time'.

Opec may abandon the dollar for pricing oil and adopt the euro but any such switch will "take time", Opec Secretary-General Abdullah Al-Badri was quoted as saying by a weekly magazine.

A decline in the dollar has eroded oil exporters' purchasing power, prompting some members to call for a switch away from the US currency.

Al-Badri's remarks sent the dollar lower against the euro on Friday.

"Maybe we can price the oil in the euro," the London-based Middle East Economic Digest (Meed) quoted Al-Badri as saying in an interview. "It can be done, but it will take time."

Newswire Reuters obtained an advance copy of the interview which will be published in the London-based magazine's next issue.

"Badri tells Meed... that the producers' cartel may switch to the euro within a decade to combat the dollar's decline," the magazine said without providing a direct quote about the timeframe.

"It took two world wars and more than 50 years for the dollar to become the dominant currency. Now we are seeing another strong currency coming into the [frame], which is the euro," said Al-Badri, who is Libyan.

The euro rose sharply to a session high of $1.4547 from $1.4500, where it was shortly before the report. It then settled back at $1.4515, up 0.2% on the day, as of around 1827 GMT.

Iran, at odds with the West over its nuclear programme, and its anti-US ally Venezuela have pressed for Opec to abandon the dollar and perhaps price oil in a basket of currencies.

But they have had little success despite the dollar's sharp fall against a basket of world currencies in recent months amid growing concerns about the health of the US economy and the prospect of interest rate cuts in the US.

Opec groups 13 members and pumps two in every five barrels of crude oil. (Reuters)

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