Thursday February 26 11:26 AM EST
OPEC Consults on How to Boost Weak Oil Market
By Sam Arnold-Forster
LONDON (Reuters) - Ministers from the Organization of Petroleum Exporting Countries
are consulting on ways to boost oil prices, OPEC officials said Thursday.
Crude oil prices have tumbled in recent months to near the lowest level in four years.
North Sea Brent, a leading world grade, stands at about $14.33 a barrel, $5 below the
average price of last year.
OPEC Secretary-General Rilwanu Lukman has contacted cartel members and an
emergency meeting has not been ruled out, officials said.
"He is in permanent consultations with all (OPEC) ministers to decide what to do. The
question of an emergency meeting is always open," said one OPEC source.
Indonesia's Mines and Energy Minister and OPEC President Ida Bagus Sudjana called
for an extraordinary group meeting to discuss the price fall.
"I have told OPEC Secretary-General to contact OPEC ministers to see whether they
will agree to gather for an extraordinary meeting," Sudjana told reporters in Jakarta.
But Sudjana's call may fail to stir enthusiasm for emergency measures from the core of
Gulf OPEC members, analysts said.
"He'll probably meet a cool response," said one industry analyst in the region.
"Emergency meetings look like you are panicking."
Saudi Arabia, the world's biggest oil exporter, has said it wants to check the group's
March output before giving its crucial support to an emergency meeting.
Riyadh has also made it clear that it wants Venezuela, viewed as the country that most
often exceeds its OPEC-set production limit, to make the first move toward reining in
overproduction among the 11-member cartel.
"There is a possibility of an April (emergency) meeting," a Saudi official said last week.
"But we would like first to see the March (production) figures."
Saudi Arabia's oil minister Ali al-Naimi last week called for "meaningful efforts" by
OPEC members that have been pumping more oil than the quotas set by the cartel.
Last November OPEC raised its combined output ceiling by 10 percent to 27.5 million
barrels per day. But by January, production had already jumped beyond 28 million
barrels daily.
Saudi Arabia's King Fahd said Monday that oil prices and the stability of world oil
markets were the responsibility of all producing states.
"Protecting the market and restoring its stability is the responsibility of all exporting
states inside and outside OPEC," the official Saudi Press Agency quoted the king as
saying at his weekly cabinet meeting.
Iran's former President Akbar Hashemi Rafsanjani, on a visit to Saudi Arabia this week,
also said OPEC should get tough with members who overshoot their quotas.
Last week a Saudi official said greater quota compliance would allow it "to consider
collective additional measures to bring stability to the market like readjusting quotas
and reducing the ceiling."
By offering the sweetener of a possible adjustment of quota restraints within the group,
Riyadh was hoping that countries exceeding their quotes -- Nigeria and Qatar but
mainly Venezuela -- would be tempted to comply, analysts said.
But the Saudi call appeared to fall on deaf ears in Caracas. Venezuelan Oil Minister
Erwin Arrieta responded immediately, telling reporters he would "absolutely not" cut
production. |
