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| International-UN-NGOs | ||
| Opec fails to agree on date for cut in output | ||
| 2004-03-23 | ||
Some members of the Organisation of Petroleum Exporting Countries on Monday suggested the oil cartel postpone implementing the production cut it agreed last month. However, others stuck by the April 1 start date to reduce the group's production quota by 1m barrels a day to 23.5m b/d. That sent mixed signals to an already nervous oil market where some large institutional investors are beginning to cash in on their record long positions. Opec, which controls almost 40 per cent of the world's supply, will meet on March 31 to decide whether to stick to its decision last month to reduce its quota in expectation of lower demand this spring. Chakib Khelil, Algeria's energy minister, said: "Algeria feels that the decision that was made in Algiers on February 10 is a prudent and precautionary measure to avoid a tremendous fall in oil prices." He said the reduction was prudent "because in the second quarter we are going to have a lower demand of 2.5m b/d and if the hedging funds pull out of the market, we are going to have at least a $7 drop in prices".
Some economists and analysts said Opec's worry about a price collapse as demand for winter fuels subsided in the western hemisphere was misplaced. Opec's obsession with the need to cut output to prevent an oil price collapse in the fourth quarter four looked increasingly out of step with the behaviour of the oil market, the Centre for Global Energy Studies in London said in its monthly report on Monday. Opec ought to have little difficulty in keeping oil prices at or above $28 a barrel in 2004, a level that appears to have become the organisation's first line of price defence in what is a tight market. Demand from China and the US has been especially strong in the past year, surprising many analysts. Even if Opec decides at its meeting in Vienna next week not to postpone the implementation of its quota cut, it is by no means assured that the group will be able to enforce its decision, especially if prices remain strong, analysts say.
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| Posted by:Steve White |
| #7 [Off-topic or abusive comments deleted] |
| Posted by: TROLL 2004-3-23 10:03:53 PM |
| #6 The upcoming summer season is when people do a lot of their driving. Demand goes UP at this time, not down Gasoline demand goes up during the summer, but heating oil demand drops significantly. EU industry is weak and crude oil futures are priced in US $$. Both these factors mean less wealth to the oil producers unless they keep prices very high. The problem for them is twofold. First, very high prices encourage some to cheat in order to take more sales when demand slacks. And second, sustained high prices encourages a switch to alternatives. So, the Saudis, Venezuela and probably Mexico would like to see Bush defeated and therefore want to keep prices high (impacts US economy). OTOH, they also don't want to see a significant shift on America's part to other suppliers. Cartels are powerful, but they have some very real vulnerabilities too. Rumors are that the Saudis have been cashing out of US Treasuries and stocks in a probably effort to punish Bush for his Mid East Initiative. However, as the markets showed right after the Madrid bombings, when things are uncertain capital flocks to the safest investments - and despite our level of public debt, US treasuries and our equities are the best bets around. |
| Posted by: rkb 2004-3-23 12:10:48 PM |
| #5 The upcoming summer season is when people do a lot of their driving. Demand goes UP at this time, not down. It's also election time and it's all about the economy, stupid. Oh wait....it's all about oiiilll. ok..wait..if the ecomomy is affected by the price of oil, that would mean the left's is vote is all about oil. But they shouldn't feel bad, afterall, they don't shop at Wallmart....you know, because of the goods from China's sweatshops and all that. And they give their restaraunt doggie bags to the homeless as they walk by. So they are still cool. |
| Posted by: B 2004-3-23 6:51:50 AM |
| #4 And inventories, world-wide, are very low. That is why we are seeing immediate price rises with every twitch. Gutting OPEC, as a priority, strikes me as on a par with killing AlQ. The two are perversely linked and AlQ funding is definitely a function of oil prices. The most effective means of destroying OPEC should be elevated to this level. So, there's this stolen 40km wide strip along the Eastern coast of Saudi Arabia... |
| Posted by: .com 2004-3-23 12:49:41 AM |
| #3 Chakib Khelil, Algeria's energy minister, said: "Algeria feels that the decision that was made in Algiers on February 10 is a prudent and precautionary measure to avoid a tremendous fall in oil prices." What's this guy talking about? The upcoming summer season is when people do a lot of their driving. Demand goes UP at this time, not down. |
| Posted by: Bomb-a-rama 2004-3-23 12:33:51 AM |
| #2 Yes, and one of those gang of thieves is our Southern neighbor. I don't recall any of them opening up the spitgots. Vincente wants his people here, time for quid pro quo. |
| Posted by: Anonymous2U 2004-3-23 12:17:50 AM |
| #1 Don't you love it when this band of thieves falls out?! Can't wait until a U.S.-led Iraq (and perhaps our new pal Libya) starts to break the back of this Saudi monopoly! |
| Posted by: Jen 2004-3-23 12:11:05 AM |