Tag Archive | OPEC

OPEC calls for end to overproduction

VIENNA: OPEC ministers have called for an end to overproduction by some members as they sought to slice nearly a million barrels per day from world supply and boost prices but without further shocking the anemic global economy.

Their comments suggested that Sunday’s oil ministers’ meeting of the Organization of the Petroleum Exporting Countries might opt for a call on all members to honor production quotas, instead of deciding to slash output outright.

Most members of the 12-nation organization had been clear in favoring reduced output in the days preceeding Sunday’s full meeting of the Organization of the Petroleum Exporting Countries.

Still they had left open whether they want to lower output quotas or if they favor a solution less likely to hurt the struggling global economy by simply seeking to end overproduction by some nations above levels allotted to them.

Algerian energy and mines minister Chakib Khelil called for both on Saturday.

“Comply and cut,” he told reporters asking what he preferred. But recognition that direct cuts could backfire appeared to prevail on the eve of the meeting.

While slashing production could raise prices in the short term, it could also lead to further depressing demand, as strugglingeconomies cut back on pricey crude they cannot afford. Pushing forfull quota compliance instead would be less harmful.

OPEC cuts agreed on since September were meant to take a daily 4.2 million barrels off the market. But the 11 members underproduction quotas are still overshooting their joint daily target level of just under 25 million barrels by about 800,000 barrels a day.

OPEC calls for end to overproduction

VIENNA: OPEC ministers have called for an end to overproduction by some members as they sought to slice nearly a million barrels per day from world supply and boost prices but without further shocking the anemic global economy.

Their comments suggested that Sunday’s oil ministers’ meeting of the Organization of the Petroleum Exporting Countries might opt for a call on all members to honor production quotas, instead of deciding to slash output outright.

Most members of the 12-nation organization had been clear in favoring reduced output in the days preceeding Sunday’s full meeting of the Organization of the Petroleum Exporting Countries.

Still they had left open whether they want to lower output quotas or if they favor a solution less likely to hurt the struggling global economy by simply seeking to end overproduction by some nations above levels allotted to them.

Algerian energy and mines minister Chakib Khelil called for both on Saturday.

“Comply and cut,” he told reporters asking what he preferred. But recognition that direct cuts could backfire appeared to prevail on the eve of the meeting.

While slashing production could raise prices in the short term, it could also lead to further depressing demand, as strugglingeconomies cut back on pricey crude they cannot afford. Pushing forfull quota compliance instead would be less harmful.

OPEC cuts agreed on since September were meant to take a daily 4.2 million barrels off the market. But the 11 members underproduction quotas are still overshooting their joint daily target level of just under 25 million barrels by about 800,000 barrels a day.
source : jang.com.pk

OPEC should cut oil supply, if demand slow: Iraq

DOHA: OPEC should look to reduce oil supply further if demand is insufficient to absorb supplies, Iraq’s oil minister said on Tuesday.

“If there is not sufficient demand for OPEC crude we will have to consider a reduction,” Oil Minister Hussainal-Shahristani told reporters on the sidelines of a conference. OPEC, supplier of more than a third of the world’s oil, has raced to cut supply to match falling demand from a slowing global economy. The Organization of the Petroleum Exporting Countries next meets in March to discuss supply.

Shahristani said earlier this month he expected OPEC to reduce supply targets at the March meeting. The group pledged cutting 4.2 million barrels per day (bpd) since September had stabilized the market, he said on Tuesday. “After our previous decision, it has not kept slowing down, “Shahristani said.

U.S. crude has fallen by more than $110 from its July peak to trade at under $37 a barrel on Tuesday. Oil has mostly traded in a $35 to $45 range since December.

source : jang.com.pk

Oil prices steady in Asia

SINGAPORE: World oil traded steady in Asia on Monday after OPEC member Iraq predicted the cartel will announce further production cuts in a market struggling with weak demand.

New York’s main oil futures contract, light sweet crude for delivery in March, rose seven cents to 40.24 dollars a barrel in afternoon trade. Brent North Sea crude for March rose two cents to 46.23 dollars a barrel.

Iraq’s oil minister at the weekend predicted that the Organisation of the Petroleum Exporting Countries (OPEC) plans more output reductions.

“In March, OPEC will convene and there will be an intention for more production cuts to shore up prices and encourage production from non-OPEC members,” Hussein al-Shahristani said, according to his close adviser Falah al-Amiri.

OPEC recently signalled it would consider more output cuts in a bid to bolster prices. Since last July, when oil prices hit records above 147 dollars a barrel, prices have tumbled because of weaker demand in a slowing global economy, analysts say.

OPEC announced production cuts totalling 4.2 million barrels per day late last year but David Johnson, an oil analyst with Macquarie Securities, said 2.75 million barrels have so far been cut in practice. He said he does not see daily cuts exceeding four million barrels. “I don’t think they can do much more than that,” Johnson said.

Oil prices are stuck in the 40 to 45 dollar range, balanced between expectations of OPEC’s next moves and poor demand reflected in economic data such as Friday’s US unemployment figures, he said.

source : jang.com.pk

Gaza tensions push oil prices above 40 dollars

NEW YORK: Oil prices breached 40 dollars a barrel Monday on rising unrest in the Middle East, bargain hunting and evidence that OPEC members have begun complying with agreed output cuts, traders said.

New York’s main contract, light sweet crude for February delivery, rose 2.31 dollars from Friday’s close to end at 40.02 dollars.

In London, Brent North Sea crude for delivery in February was up 2.18 dollars to 40.55 dollars a barrel on the InterContinental Exchange after earlier rocketing almost five dollars.

Prices rose as Israeli warplanes pounded Gaza for a third day Monday in an “all-out” war on Hamas that has killed at least 345 people and prompted rocket fire from the Palestinian enclave.

The fighting fueled fears of wider tensions in the oil-rich Middle East, traders said. Thin trade owing to the year-end holiday season also made for some price volatility.

“Military action by Israel is always a grave concern because of the uncertainty of where it might lead,” said Mike Fitzpatrick of MF Global.

“The region has been, and remains, a tinderbox and so it has the ability to erupt into a conflagration that could involve oil supplies,” he said.

But while oil prices remained sensitive to geopolitical developments, especially in the Middle East, he cited “the declining dollar, low volume and the return of bargain hunting Europeans” as other factors driving the market.

Traders were also monitoring a Gulf Cooperation Council (GCC) leaders meeting in Oman at which the Gaza turmoil was expected to dominate the talks among Saudi Arabia, the United Arab Emirates, Oman, Qatar, Bahrain and Kuwait, which together sit on 45 percent of global oil reserves.

source : jang.com.pk

UPDATE 1-OPEC may call extra talks if oil falls-Khelil

MOSCOW, Dec 23 (Reuters) – OPEC could decide in mid-January to hold an extraordinary meeting before March if it sees that global oil prices continue to slide because of weakening demand, OPEC’s President Chakib Khelil said on Tuesday.
Khelil said he expected OPEC members to fall in line quickly with the group’s latest round of production cuts and he rebuked Russia, calling on the world’s No. 2 exporter to stop merely benefiting from OPEC’s policies and contribute with output cuts of its own.
“We will review the market again and make a proper decision if we see that prices still continue sliding despite the compliance,” Khelil told Reuters in Moscow on the sidelines of a meeting of Gas Exporting Countries Forum (GECF).
Some OPEC ministers will attend an Arab economic summit scheduled for Jan. 19 in Kuwait which could be a forum for the group to look again at the oil market situation, Khelil said.
“By Jan. 12, if we see that prices are still going down, we will call the meeting and call non-Arab members like Venezuela, Angola and Ecuador to come to that meeting and make a decision when (to meet),” he said.
Last week, OPEC oil ministers agreed at a meeting in Algeria on their deepest output cut, of 2.2 million barrels per day, in a bid to balance supply with rapidly crumbling demand.
The move failed to impress the markets and the price of oil fell yet further to below $40.
“We have all opportunities to correct our decision. We are trying to catch up with the demand as best as we can estimate things. As long as the market doesn’t stabilise we will still keep running after catching up the demand,” he said.
Khelil said he expected the overall compliance of OPEC members to be good as otherwise prices could fall ever deeper.
“I think by February we should see at least (compliance of) 80 percent,” he said.
He said OPEC saw global demand falling by 200,000 bpd in the first quarter and by another 1.2 million bpd in the second quarter: “So I think all members are aware and I think there will be full compliance by March 15”.
OPEC repeatedly called on non-OPEC producers to join production cuts at its meeting in Oran, Algeria but only secured a pledge from Azerbaijan to commit 300,000 bpd. Russia refrained from making firm pledges despite saying previously that it could do so.
Khelil said OPEC was disappointed.
“Well, they (Russia at the meeting in Oran) proposed everything except for a reduction… And maybe the reaction of the market was negative because of that,” he said.
“But wait… If there were no OPEC reductions in September and October, I think we would have seen prices today at maybe $20 (per barrel). So it was because of OPEC that revenues for Russia were at $40 now not at $20…,” he said.

Oil prices higher in Asia

SINGAPORE: Oil prices rose in Asia on Wednesday as traders awaited an expected cut in output by the OPEC cartel desperate to stop a slide in prices, analysts said.

New York’s main futures contract, light sweet crude for January delivery, rose 59 cents to 44.19 dollars a barrel after dropping 91 cents to 43.60 at the close of trading Tuesday on the New York Mercantile Exchange.

Brent North Sea crude for February rose 82 cents to 47.47 dollars a barrel. The January Brent contract expired at the close of trading on Tuesday, down four cents at 44.56 in London.

source : jang.com.pk

Iran calls for OPEC output cut of up to 2m bpd

TEHRAN: Iran’s oil minister said on Sunday that Tehran will call for an OPEC output cut of 1.5 million to 2 million barrels a day, when the cartel meets next week, the ISNA news agency reported.

OPEC slashes oil demand forecasts in face of economic turmoil

VIENNA: OPEC slashed its forecasts for growth of global oil demand both this year and next year on Monday citing the current “world economic turmoil.”

Global recession fears were undercutting oil demand in developed economies and that, in turn, was pulling down overall world oil demand, the Organization of Petroleum Exporting Countries wrote in its latest monthly report.

OPEC, therefore, revised downwards its demand growth forecast for 2008 to 290,000 barrels per day (bpd) from 550,000 bpd previously. And the cartel cut its demand growth forecast for 2009 to 490,000 bpd from 760,000 bpd previously.

Iran says it will support OPEC production cut: report

TEHRAN: Iran, number two oil producer in OPEC, would support a decision to cut production by the cartel at an extraordinary meeting set for Cairo later this month, the Mehr news agency reported on Friday.

“OPEC members have decided to hold a meeting on November 29 in Cairo to discuss recent prices. The current market situation is worrying,” it quoted Iran’s cartel’s representative Mohammad Ali Khatibi as saying.

“In light of dwindling oil prices and instability in the market, Iran will support an oil production cut,” he added.

The Organisation of Petroleum Exporting Countries (OPEC), which produces about 40 percent of the world’s crude oil, decided last month to cut output by 1.5 million barrels a day from November, after crude oil prices dived from record peaks above 147 dollars in July.

Oil prices closed mixed on Thursday from nearly two-year lows in New York after OPEC suggested it would hold an emergency meeting to consider another production cut amid a global economic slowdown.

The New York Mercantile Exchange, light sweet crude for December closed at 58.24 dollars a barrel, a gain of 2.08 dollars from Wednesday’s close.

The futures contract hit an intraday low of 54.67 dollars, the lowest level since January 2007.

OPEC has already scheduled an ordinary meeting for Oran, Algeria, on December 17 to review the 1.5 million barrels cut.

The cartel has made it clear it would consider another output reduction if oil continues to remain below 70 dollars a barrel.