Saudi Arabia fires warning at
OPEC cheats
By Richard Mably
CAPE TOWN, October 27 (Reuters) - Saudi Arabia on Tuesday
fired a warning across the bows of fellow OPEC producer states by
making its sharpest call yet for full compliance with promised oil
supply cuts.
Saudi Crown Prince Abdullah, in a rare public statement, said other
OPEC nations were to blame for continued low oil prices because
they had failed to fully implement agreements on cutting supply from
the glutted world market.
"There were decisions by OPEC which would have maintained the
oil prices had everybody kept to them," the Crown Prince, heir to
the Saudi throne said in an interview with Saudi al-Riyadh
newspaper. "But unfortunately there are some brothers in OPEC
who did not abide by these decision," he said.
Market analysts said the Saudi warning appeared to all but
extinguish the prospects of any serious discussion at an informal
meeting of OPEC ministers in Cape Town of further output
reductions.
"If they're saying they haven't met their existing cuts it doesn't make
sense to me that they would cut further," said Mehdi Varzi at
Dresdner Kleinwort Benson.
"I would have thought this rules out any idea that the Saudis might
seriously entertain further cuts," said a London-based analyst.
"Although overall compliance seems to be good the Saudis are
obviously upset with one or two who are not toeing the line," said
the analyst who declined to be named.
OPEC members agreed this year to remove 2.6 million barrels a
day (bpd) from the 75 million bpd world market after oil prices hit a
10-year low.
Non-OPEC producers, led by Mexico, chipped in with another
500,000 bpd of cuts but oil prices, at little more than $13 for
benchmark Brent, remain mired $6 lower than last year.
Industry monitors have identified both Venezuela and Iran as having
patchy records on compliance since a second round of cuts was
agreed in June.
Venezuela remains about 100,000 bpd above its 2.85 million ceiling
and Iran only recently got close to its targetted supply cut.
Organisation of the Petroleum Exporting Countries members have
said they expect to meet on the sidelines of a conference in Cape
Town which starts on Thursday.
Ministers and senior officials from some 50 oil producing and
consuming nations on Tuesday began gathering for the talks which
are a sixth in a series since the 1990-1991 Gulf crisis.
business-times.asia1.com.sg
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