OPEC sends conflicting signal on need for deeper cut

NF Reporter · 12-02-2006, 10:48 AM

Reuters - OPEC ministers sent conflicting signals on Saturday on whether the group needed to reduce oil production further to bring markets back into equilibrium.

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waltky · 03-02-2008, 09:50 PM

Oil production level staying as is...

OPEC won’t change production, official says
Sun., March. 2, 2008 - Libya oil executive predicts no action after Wednesday meeting of cartel

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The Organization of Petroleum Exporting Countries is set to hold current production levels unchanged at a meeting this week as it continues to gauge the state of the global economy, the head of Libya's oil industry said Sunday. "It seems as though things are going to be as is," said Shokri Ghanem, head of Libyan oil policy and Chief Executive of Libya's National Oil Co. Ghanem also said OPEC will discuss the ongoing dispute between Venezuela and oil giant Exxon Mobil Corp., saying it was possible there could be an official pronouncement from the cartel on the issue. "We will discuss it," he told reporters in the Austrian capital.

Exxon and Petroleos de Venezuela, or PdVSA, are entangled in a legal dispute over President Hugo Chavez's move to nationalize a multibillion dollar oil project in the Orinoco basin last summer, which prompted the Irving, Texas, oil giant to leave the country. As it pursues twin arbitration cases internationally, Exxon has secured court orders freezing more than $12 billion in PdVSA assets worldwide to ensure payment, a move Chavez calls a political affront. Venezuela has responded by cutting off spot market oil sales to Exxon.

Oil ministers from the 13-member oil-producer group, which supplies four out of 10 barrels of world oil consumption, meet March 5 to discuss output policy against the contrasting factors of scorching record high prices and weakening demand. OPEC ministers have made clear in recent days that they aren't likely to respond to bullish prices by boosting supplies. "We're going to see...about the economic performance" but so far it seems there will be no change, Ghanem said.

OPEC wonâ€™t change production, official says - Oil & energy - MSNBC.com

waltky · 09-07-2008, 09:25 PM

Price of oil affects OPEC investment portfolios...

When to cut? OPEC struggles with falling oil prices
7 Sep.`08 — The question facing the OPEC oil producer group which meets Tuesday is when, not if, to cut its oil production target as crude prices slide in the face of weakening economic growth, analysts say.

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Most analysts surveyed by AFP expect the 13-nation cartel to agree to trim its output informally at its meeting before waiting until later, possibly at a scheduled gathering in December, to alter its official target. The trimming will be achieved by members, mainly powerhouse Saudi Arabia, agreeing to cut their excess production above their OPEC quota, which would remove oil from the market but not amount to a formal change in policy. Under fierce pressure from the United States, Saudi Arabia agreed in May and June to increase production to help calm the runaway crude market which reached a pinnacle on July 11, when crude struck 147 dollars a barrel in New York.

"Even Saudi Arabia doesn't want the price to come down too much," said analyst Manouchechr Takin at the Britain-based Centre for Global Energy Studies (CGSE) referring to the moderate and pro-US Middle East producer. The stakes are entirely different to the last time OPEC members met in March, when crude prices had broken through 100 dollars a barrel and were on a steep upwards trajectory. This time, oil prices are on the way down approaching 100 dollars a barrel -- a level many members, above all the traditional price hawks of Iran and Venezuela, are keen to protect.

But economic conditions, which determine demand for oil, have worsened considerably, with many European economies facing recession, the United States struggling and fears growing about the emerging economies of Asia. OPEC producers have to balance their desire for revenues from high oil prices against the danger that high prices could choke off feeble economic growth. Analyst John Hall, who runs his own oil consultancy, John Hall Associates, expects a cut in production via a crackdown on overproduction by Saudi Arabia. "I think they'll hold up (their production target) at where it is and reinforce targets. That'll bring the output number down," he told AFP. "It's a way of not announcing an official reduction in output."

More AFP: When to cut? OPEC struggles with falling oil prices

waltky · 09-10-2008, 03:39 AM

OPEC cutting production...

OPEC decides to curb overall output; prices rise
Sep 10, `08 - OPEC oil ministers agreed Wednesday to trim overall output by more than 500,000 barrels a day in a compromise meant to avoid new turmoil in crude markets while seeking to bolster falling prices.

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The news sparked a rebound in oil prices. Light, sweet crude for October delivery rose $1.00 to $104.26 a barrel in electronic trading on the New York Mercantile Exchange. The OPEC announcement reflected OPEC efforts to cover all bases in an oil market that saw prices spike to a record high just short of $150 a barrel in July, only to shed nearly 30 percent off those peaks in subsequent months. Oil prices had lost more ground Tuesday ahead of the OPEC decision, falling $3.08 to settle at $103.26 on the Nymex, the lowest settlement price since April 1.

An OPEC statement issued after oil ministers ended their meeting early Wednesday said the organization agreed to produce 28.8 million barrels a day. OPEC President Chakib Khelil said that quota in effect meant that member countries had agreed to cut back 520,000 barrels a day in production over the established quota. Saudi Arabia alone accounts for more than that amount of output over its official quota - all members of the 13-nation OPEC have such formal production limits allotted to them except violence-torn Iraq. But Khelil said that the cutbacks in overproduction would apply proportionally to all OPEC members bound by quotas.

OPEC overall regularly churns out oil above the organization's overall quota, last set in November at 27.3 million barrels a day, and it remained unclear whether group members would abide by the decision to keep to their limits. Still, the decision could have the psychological effect of steadying eroding prices at or above the $100 mark - the red line for many OPEC nations concerned about their rapid loss of revenue in recent months.

More My Way News - OPEC decides to curb overall output; prices rise

waltky · 09-15-2008, 07:40 AM

Granny says, "Mebbe we need to send Cheney over there with a shotgun?...

US government tells OPEC it needs more oil
Sunday 14th September, 2008 - The US government has said more oil is needed on the market, not less.

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The White House in responding to a decision by OPEC to cut production by about half a million barrels a day, has said it disagrees with the decision.

The Organisation of the Petroleum Exporting Countries has recently voiced concern about a growing surplus of oil on the market as high prices have affected demand.

To break away somewhat from OPEC, the US House of Representatives is expected to vote on an energy package this week that would open the coasts of at least four Southeastern states to offshore drilling: Georgia, North Carolina, South Carolina and Virginia.

US government tells OPEC it needs more oil

waltky · 10-05-2008, 11:01 PM

Granny says get ready to get out the vasoline an' bend over...

Iranian minister says oil prices will have to rise
Saturday 4th October, 2008 - Iran's oil minister has said oil prices will not be able to stay below $100 a barrel.

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Gholamhossein Nozari has told reporters the current price is unsustainable for both producers and consumers. Iran is the world's fourth-largest exporter is among the members of OPEC, and needs high oil prices to balance its budget.

OPEC, source of more than a third of the world's oil, agreed in September to trim output to prop up prices and called for strict compliance from its members.

High fuel prices and the wider economic crisis have hurt consumption in top consumer the United States and other major consumers. US crude traded around $93 a barrel on Friday, down over $50 from a record over $147 in July.

Iranian minister says oil prices will have to rise

waltky · 11-27-2008, 08:36 PM

Oil price drop undercuts producer's policies...

Oil Price Decline Undercuts Policies of Oil-Rich Nations
27 November 2008 - The plummeting price of oil is having an impact on nations that restrict oil exploration and production to state-owned companies. Analysts say many use the revenues to further their ideological objectives and expand their influence, and falling prices could affect such policies.

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The price of oil is down dramatically, from a record high of $147 a barrel earlier this year to less than $55 in recent days. And analysts say this is having an impact on petroleum-producing countries that have used oil revenues to further their ideological ambitions.

Russia's new military resurgence is considered to be fueled by petrodollars. Iran has used its oil revenues to extend its influence in the Middle East and defy sanctions aimed at blocking its nuclear ambitions. And, Venezuelan President Hugo Chavez has gained power and influence to counter U.S. policy in the Western Hemisphere because of the steady flow of oil money.

But falling oil prices could weaken a government's hold on power, says energy analyst Kenneth Medlock at Rice University in Houston. "It makes it very difficult for the government to remain solvent, basically," Medlock said, "and continue the types of programs that they've had in place when oil prices were higher, or initiated when oil prices rose. And that, of course, for the politicians who are in power, puts them in a very tenuous position."

More VOA News - Oil Price Decline Undercuts Policies of Oil-Rich Nations