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OPEC set to maintain official oil output

In Uncategorized on October 14, 2010 at 2:27 pm

VIENNA (AFP) – OPEC is expected to maintain its official oil production quota at a ministerial meeting on Thursday after key members of the cartel expressed satisfaction with the current level of crude prices.

Ecuadorian Natural Resources Minister Wilson Pastor-Morris, the current president of the Organization of Petroleum Exporting Countries, said on Wednesday that there was “consensus between members” to leave output unchanged.

Other OPEC ministers arriving in the Austrian capital, including kingpin Saudi Arabia, suggested that the cartel would hold its official output quota at 24.84 million oil barrels a day, where it has been since the start of 2009.

Libyan Oil Minister and chairman of Libya’s National Oil Corporation (NOC) Shukri Ghanem talks to reporters as he arrives in Vienna. AFP

However the grouping that produces 40 percent of world oil may also call upon its members to show greater compliance with official production levels.

The International Energy Agency (IEA), which represents oil consuming nations, estimated Wednesday that OPEC pumped 26.77 million barrels a day in September, as producers sought to boost revenues amid a pick-up in energy demand.

“We should simply confirm (official output on Thursday) and ask for compliance,” Libya’s OPEC official Shukri Ghanem told reporters in Vienna, where the cartel’s headquarters are based.

“I don’t think there’s much more to be done,” added Ghanem, who is head of Libya’s National Oil Company.

OPEC meets periodically to set output with a view to supporting its members revenues and oil sector investment.

Before Thursday’s meeting, and mindful that a spike in prices could harm global economic recovery, Saudi Arabia also said that it was happy for crude to stay at 70-80 dollars, where it has been for much of the past year.

However oil futures shot above 84 dollars in London on Wednesday as the US currency weakened and Chinese reported strong crude imports, traders said.

Prices have almost trebled from lows of around 30 dollars a barrel at the height of the financial crisis in late 2008, yet OPEC members Algeria, Libya and Venezuela said they would like to see crude at 90-100 dollars.
Although global demand for oil is already rising surprisingly fast after the worst economic downturn in decades, the price is set for only a 75-80 dollar range, the IEA said on Wednesday.

It also revised up its demand forecast for oil, by more than OPEC had done on Tuesday, mainly because of an economic upturn in industrialised countries.

OPEC comprises 12 members — Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

Iraq is the only member without a production quota owing to the country’s unrest.

Source: SGGP

OPEC warns of weak recovery for oil market

In World on December 23, 2009 at 11:33 am

The OPEC oil producers’ cartel warned of lingering weakness in the world economy and held its emergency crude output quotas unchanged at its meeting in Angola on Tuesday.

Delegates at the meeting also said that growing output from Iraq’s recovering oilfields, which observers say will become a major concern for its fellow producers, was unlikely to have an impact for several years.

Tuesday’s meeting capped a year of recovery for oil prices, which have more than doubled since quotas were cut a year ago to stabilise the market during the economic crisis that crippled demand for petroleum products.

Saudi Oil Minister Ali al-Naimi, representing the cartel’s most influential member, said crude price levels, which have been hovering around 75 dollars, were “perfect.”

Jose Maria Botelho de Vasconcelos, President of the OPEC Conference and Angolan Minister of Petroleum

But the powerful grouping of Middle Eastern, African and Latin American oil countries in a statement expressed “great concern” for the world economic outlook, which threatens to weaken demand for their key exports.

“Although asset market prices have rebounded and economic growth has resumed in some parts of the world, it is not yet clear how strong or durable the recovery might be,” they said in a joint communique.

“With the world still faced by shrinking industrial production, low private consumption and high unemployment, the conference once again decided to maintain current oil production levels unchanged for the time being.”

Observers had said ministers at the meeting would have one eye on Iraq’s recovering oil industry and its ambitious plans to ramp up its production to levels that could rival Saudi Arabia, the world’s biggest oil producer.

But Iraqi Oil Minister Hussein al-Shahristani and others played down the prospect of a surge from Iraq’s oilfields, saying the question of quotas for Iraq was unlikely to be tackled in the immediate future.

The cartel’s Secretary General Abdullah El-Badri told reporters after the meeting: “I don’t expect any production increase (by Iraq) before five or six years,” but added that one day, “I am sure we will accommodate Iraq.”

Iraq is currently exempt from the cartel’s system of quotas, but recently signed contracts with several foreign companies to start pumping crude oil, aiming to expand the industry as it recovers from war.

A consortium led by top Chinese oil company CNPC initialled another deal with Iraq on Tuesday, to develop the Halfaya oil field in southern Iraq, oil ministry spokesman Assem Jihad said.

OPEC members called for higher compliance with the quotas. The group’s current president, Angolan Oil Minister Jose Botelho de Vasconcelos, said even non-OPEC countries should play their part to “balance the market.”

Tuesday’s OPEC meeting was the first to be hosted by Angola. The country joined OPEC in 2007 and has overtaken Nigeria as Africa’s biggest crude producer, according to the International Energy Agency, but it still suffers from three decades of civil war that ended seven years ago.

The 12-member group is next due to meet on March 17, when the presidency will have been taken over by Ecuador.

Oil prices fell slightly on Tuesday after the OPEC members’ decision. New York’s main futures contract, light sweet crude for delivery in February, fell 32 cents to 73.40 dollars a barrel.

Source: SGGP Bookmark & Share

Tough times force OPEC members to close ranks

In World on December 7, 2009 at 3:52 am

 Divisions within OPEC have eased as the dual threat of the global economic crisis and climate change talks force oil producers to be pragmatic and unified, analysts said on Sunday.

Two years ago, when oil prices soared to nearly 100 dollars a barrel, the oil exporters cartel, which includes both allies and foes of the United States, was severely tested.

The Organisation of Petroleum Exporting Countries was then torn between price hawks like Algeria, Iran, Libya and Venezuela on one side and nations like Saudi Arabia which wanted moderate prices in the interests of consumers.

But the stance of the price hawks has since lost support, leading to a convergence of positions within the bloc.

OAPEC Secretary General Abbas Ali Naqi (L) and Egyptian Oil Minister Sameh Fahmi attend the 83rd meeting of the Organisation of Arab Petroleum Exporting Countries (OAPEC) in Cairo on December 5.

Less than three weeks ahead of the next OPEC meeting in Luanda, Angola, the group’s oil ministers agree that quotas must remain at their current level of 24.84 million barrels per day (bpd).

Even US arch-foes Iran and Venezuela support that view.

Although the price of oil is trading at around 75 dollars a barrel, nobody is daring to ask for 100 dollars.

Observers say this unity has come about largely thanks to pragmatism instilled into producers by the events of 2008: an unprecedented price surge to 147.50 dollars a barrel, followed by a plunge to 32.40 dollars in December.

“What happened makes you think. An oil price of 75 dollars is higher than they could have hoped for. Even the most hawkish nations are finding it hard to ask for more,” said Francis Perrin of the Oil and Gas Journal.

This turnaround came about because producers were afraid of another price collapse, according to Julian Lee, analyst at the Centre For Global Energy Studies in London.

“They still have a big fear of oil (prices) falling … They haven’t entirely lost that fear,” said Lee.

Another reason for the appeasement of the hawks was that the countries which traditionally call for high prices have proved less than effective in implementing decisions taken by OPEC.

At a meeting in Oran, Algeria in December 2008, OPEC pledged to withdraw 4.2 million bpd from production from the start of 2009 in order to stabilise the market.

However, the bulk of the sacrifice was provided by Saudi Arabia, while Iran did not implement the agreed cut in production.

“The influence of the hawks is limited” because “if somebody raises the issue of higher prices … he will be told to comply more,” said David Wech, an analyst at JBC Energy.

Finally, while the impact of the global recession is still being felt on oil demand, another key challenge for producers looms in the shape of measures to reduce carbon emissions.

Such a deal could be signed this week in Copenhagen during landmark UN-led talks on tackling global warming.

“When you see in the OPEC bulletins the rising concern linked to climate change, you can see that producers are closing ranks,” said Perrin. “In the hardest times in its history, OPEC tends to stick together.”

Measures to reduce the share of fossil fuels in total energy consumption directly threaten the interests of oil producers.

OPEC’s decision last December to cut production by 4.2 million bpd officially brought down the total output of the 12-member cartel — excluding Iraq — to 24.84 million bpd.

On Friday, crude prices tumbled in volatile trade, succumbing to a stronger dollar following an improved US jobs report picture.

New York’s main contract, light sweet crude for January delivery, fell 99 cents to 75.47 dollars a barrel. In London, Brent North Sea crude for delivery in January dropped 84 cents to settle at 77.52 dollars a barrel.

Source: SGGP Bookmark & Share