OPEC maintains output as prices hold above 60 dollars
by Sim Sim Wissgott and Ben Perry Thu Mar 15, 3:16 PM ET
The Organization of Petroleum Exporting Countries, which supplies over a third of the world's oil, left its official quota unchanged following decisions to cut production at its two previous meetings in October and December. Ahead of the latest meeting the International Energy Agency had signalled that the oil cartel would need to boost exports in the coming months owing to weak energy inventories. OPEC also decided on Thursday against handing a first quota to Angola, which joined the organization on January 1, but indicated that Ecuador -- which left the cartel in 1992 -- could return at any time. Regarding output, OPEC Secretary General Abdullah al-Badri told a press conference after the ministerial meeting in Vienna: "The market is stable, the market is healthy, we do not need to touch it (output) at this time." Oil prices have switched between big gains and losses in recent weeks, mirroring heavy falls and rebounds to global stock markets caused by concern about a weaker US economy. Crude futures remained above OPEC's unofficial 60-dollar target level in London trade after the production announcement. Meanwhile in a statement after the meeting in OPEC's Austrian headquarters, the cartel focused on volatility in the oil market. "Although all indicators clearly show that the market remains well-supplied with crude oil ... overall oil market volatility is likely to continue," OPEC said. "In light of this volatility, the conference decided to continue closely monitoring market developments to ascertain that oil market stability is achieved and that global economic growth is sustained," the official statement added. Ahead of the gathering there had been suggestions from some ministers that OPEC would also announce plans to hold an extraordinary meeting in June owing to the unsettled situation on global financial markets. But the cartel said its next meeting would be an ordinary session, in Vienna on September 11. Following that it would convene in Abu Dhabi for an extraordinary meeting on December 5. In its monthly report, also published on Thursday, OPEC noted that "downside risks to the world economic outlook are coming to the fore." The cartel meanwhile said that world oil demand would grow by 1.5 percent in 2007 from the level last year, matching its forecast in January and February. Members of the cartel had said Wednesday that oil demand could be hit should there be a long-term downturn in the stock markets that leads to slower US economic growth. Global equities were higher on Thursday, but traders warned about a return to losses ahead. Last December, OPEC decided to slash its output by 500,000 barrels per day from February 1 this year, following a reduction of 1.2 million bpd in November. According to oil industry experts, OPEC is currently producing about 700,000 barrels above its official daily target of 25.8 million barrels.
" News | News Photos | Images | Web Iraq is not included in the quota system because of disruption to its output.The cartel's move to cut production towards the end of last year came after crude prices had tumbled from record highs above 78 dollars in mid-2006 to about 60 dollars. They went on to fall below 50 dollars in New York in mid-January, the lowest point for 19 months, owing to strengthening energy stockpiles in the United States, but have since rebounded as supplies dropped once more. |
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