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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: upanddown who wrote (1710)	3/15/2001 5:40:09 PM
From: excardog	Respond to of 23153

Some OPEC stuff: Rattled OPEC hammers out new oil supply curbs March 15, 2001 3:18pm Source: Reuters By Tom Ashby and Andrew Mitchell VIENNA, March 15 (Reuters) - OPEC producers on Thursday were negotiating new output restraint measures aimed at propping up oil prices hurt by a global economic downturn. Faced with evidence that world demand for the cartel's exports is faltering, the group is considering cutting between 750,000 and one million barrels daily. ``It's in that range. There's more or less a consensus in that range,'' said Venezuelan Oil Minister Alvaro Silva. Gathering for Friday's conference, ministers have had their calculations complicated by gloomy demand forecasts, a two-day price slide and the slump on world equity markets. ``To stabilise prices nobody really has a clue,'' admitted OPEC President Chakib Khelil of Algeria. ``There is no mechanical relationship between what you do and prices. There are many other factors.'' Fallout from economic deterioration in the United States has hit the cartel's main growth markets in Asia and fears are that slowing petroleum consumption could send prices into a tailspin. ``There are many factors like the slowdown in the U.S. economy and Japan,'' said OPEC Secretary-General Ali Rodriguez. ``We need to take some preventative measures.'' As ministers compared notes in hotel suites, delegates said the influential Saudi camp was set to guarantee at least a 700,000 bpd cut and might be prepared to back something larger. AGGRESSIVE ALGERIA Any cut bigger than 770,000 bpd would mean Riyadh swallowing an individual quota of less than its prized eight million barrels daily. But delegates said that would not necessarily be an obstacle for Saudi to go for more. Price hawk Algeria is pressing for an aggressive cut of up to 1.5 million barrels daily -- but moderate members are thought highly unlikely to support such a big reduction. Concern has grown among the producers, responsible for 60 percent of world oil exports, that prices might be on the verge of a collapse as spreading economic woes compound the seasonal decline in demad at the tail end of winter. London Brent blend crude recovered a modest 27 cents on Thursday to $24.20 having shed $1.90 over two previous days. That took OPEC's reference price down to $23.55, close to the bottom of the group's preferred $22-$28 target range, despite a production cut of 1.5 million bpd in January. ``The market has been wrestled out of their control by global economic circumstances,'' said consultant Gary Ross of PIRA Energy. ``It's all about market confidence. If they lose their momentum in maintaining prices they could be in for real trouble.'' DEMAND GROWTH DETERIORATES OPEC has been rattled by forecasts for a downturn in petroleum demand growth this year. On Wednesday the International Energy Agency, the body that represents petroleum consuming nations, revised down its projection for oil demand growth and said consumption in China and India fell sharply in December. The agency's latest revision lowers its original growth estimate for 2001 by 460,000 bpd to 1.41 million bpd for total world oil consumption of 76.8 million bpd. The IEA also said refiners ended the winter more comfortably stocked with spare inventories than had been expected. It says OPEC policy that has kept the heat under oil prices for the past year is in part to blame for the downturn in economic, and petroleum demand, growth. Crude hit a ten-year high of $35 for Brent last year sending consumer country energy bills rocketing. But OPEC says the West enjoyed cheap oil for too long during the 1990s and that its first priority is to protect precious cartel export revenues. ``I don't think $25 oil has any impact on growth or an inflationary impact,'' said OPEC President Chakib Khelil. Producers also will have to consider the supply prospects for 11th member Iraq, outside the group's quota system under United Nations Gulf War sanctions. Baghdad says it is planning this month to lift exports back to 1.8-2.0 million barrels daily after a shortfall in recent months under the U.N.'s oil-for-food programme. ^ REUTERS@