OPEC resumes push to raise oil prices
Buttonholes producers: Analysts expect cut-back plea to fall on deaf ears
Gabrielle Monaghan -- Bloomberg with files from Reuters
nationalpost.com
VIENNA - OPEC, facing oil prices near a two-year low, yesterday resumed lobbying one-time allies such as Norway, Mexico and Russia to curtail production and revive the crude oil market. Analysts expect little co-operation.
Oil advisers from OPEC producers met in Vienna with counterparts from Russia, the world's third-largest producer, Mexico and Norway, plus smaller producers such as Angola, Kazakhstan and Egypt, an OPEC spokesman said. They were to decide how much oil needs to be constrained to lift prices, Saudi Arabian Oil Minister Ali al-Naimi said Saturday.
"We came out of the meeting with more or less the same picture, the same assessment of market conditions for the fourth quarter," Adnan Shihab-Eldin, OPEC's director of research, said after the meeting. "Consultation will continue between OPEC and non-OPEC at a higher level."
While OPEC is probably nearing its fourth output cut this year, the move may be "useless" without outside help, Hugo Chavez, president of No. 3 OPEC producer Venezuela, has said. Oman, which produces less than one-sixth as much as Russia, is the only non-OPEC country so far to back another reduction.
OPEC's benchmark oil price has dropped 25% to US$19.18 a barrel since the Sept. 11 terrorist attacks on the United States accelerated a slowdown in energy demand. An agreement obliges the alliance to consider production cuts if its oil index stays below US$22 for 10 straight trading days. Friday marked the 25th.
While the prospect of an OPEC cut pushed Brent crude up as much as 2.4%, or US50¢, to US$21.52 a barrel in London yesterday, taking oil off the market unilaterally may just hand sales to non-OPEC producers without boosting prices, analysts said. "OPEC is in a bit of a corner," said Roger Richards, who helps manage about US$12-billion in Europe for Prudential Bache Ltd. "They can try to persuade [non-members] of the economic rationale for cutting production, but I don't think anyone really believes it's going to happen."
Oman, a Persian Gulf state pumping some one million barrels of oil a day, on Saturday backed a supply cut of at least one million barrels from OPEC and non-OPEC producers. Russia, which produces 6.5 million barrels a day, has remained mute on the question, saying it can't control private oil companies that now account for four-fifths of its production.
Mexican President Vicente Fox said yesterday the nation has no plans to reduce oil production. "No, there will be no reduction in Pemex production at this time."
Yesterday's meeting in Vienna didn't involve OPEC oil ministers, who are scheduled to meet Nov. 14.
While OPEC could agree on new production targets by telephone, Venezuela and Algeria have said a final decision probably won't be made until the gathering.
Meanwhile, Venezuelan Oil Minister Alvaro Silva said yesterday OPEC is considering an oil production cut of 1 million barrels per day as one of its options to raise declining oil prices.
"What is being talked about and analyzed is that figure of around one million barrels [per day]. It is one of the figures that is under consideration,"Mr. Silva said. |
