It's official folks - For 1999, bands are -
DEAD DEAD DEAD - Nice try though, bears. You managed to knock oil prices down for a few seconds! But now your goose is COOKED!
gulf-times.com
Saudi wants oil stocks to guide Opec's price policy
DUBAI: Opec powerhouse Saudi Arabia wants the level of world oil stocks not prices to determine the group's future moves in the market, a Saudi oil official said yesterday.
"The name of the game is the level of oil stocks not the prices. This is the most important market fundamental," the official said.
"Any decisions that are made should be mainly based on stock levels. This should determine the decisions," he added.
The comments came two days after the oil ministers of Saudi Arabia, Venezuela and Mexico held a meeting in Caracas and said output cuts the three countries spearheaded over the past 18 months should be kept in place until next April at least.
Opec will hold a ministerial meeting on September 22 in Vienna. The group seems eager to end speculation that producers might seek to ease output curbs after seeing oil prices double since February.
"We should not shoot ourselves in the foot and raise production just because prices have risen," said the Saudi oil official.
Oil prices have shown a strong recovery due mainly to strict compliance with the March production cut agreement between Opec and producers outside the group.
"The prices are high only because of strong compliance with the production cuts. We need to make sure that there are strong market fundamentals all around before considering any new moves," he added. "We have to be vigilant".
Inventories still remain high compared with the average over the past five years. And after falling slightly last year, world oil demand growth this year is expected to be only between one and 2%.
The market recovery has raised questions over how Opec can keep prices in a target range of $18-$20 for a barrel of international benchmark Brent.
At the Caracas meeting, the oil ministers of Saudi Arabia, Venezuela and non-Opec Mexico floated ideas on how to stabilise prices in future, including a proposal by Venezuela which calls for an automatic mechanism to manage oil supply to keep prices within a specified range.
Saudi Arabia, the world's largest oil producer and exporter, would want such a mechanism to be a device to gauge supply and demand, not to act as firm price band, the Saudi oil official said.
"We see this (proposed mechanism) as a point of reference. This issue will take time. Nothing has been agreed upon. It is a concept," he said.
"Saudi Arabia believes that market forces should be the main factor," another Saudi source said.
The official Saudi Press Agency issued a statement after a cabinet meeting on Monday saying that the ministers had been briefed on the Caracas meeting.
"The cabinet stressed the kingdom's commitment to the stability of the oil market and its emphasis that this matter could not have been achieved without working within what had been agreed upon between members of Opec and other producers for the general benefit of producers and consumers," it said. - Reuters |
