3 items found for your search. If no results were found please broaden your search.
(04/08/03 4:52am)
LONDON -- OPEC members plan to hold an emergency meeting this month aimed at curbing runaway crude production to avert a possible price crash, a source at the producers' cartel said Monday.\nOil ministers at the Organization of Petroleum Exporting Countries have agreed to meet April 24 in Vienna, Austria. The meeting will take place whether the war in Iraq has ended, the source said, speaking on condition of anonymity from OPEC headquarters in the Austrian capital.\nMost OPEC members have been producing at maximum capacity to keep world oil supplies plentiful during the war. But oil ministers are increasingly worried that OPEC might be oversupplying the market just as demand starts falling to its seasonal low.\n"There is some serious concern among some of the ministers that prices could be headed for a crash if they don't act quickly to stop the trend," the source said. "No one is talking about cutting production of course, but that would be the only feasible thing to do."\nThe group has decided not to wait until OPEC's benchmark price for oil falls below the group's minimum threshold of $22 a barrel.\n"You don't wait for the crisis to happen. You act before," the source said.\nOil prices have fallen sharply since peaking at almost $40 a barrel on Feb. 27, before the outbreak of fighting in Iraq. May contracts of U.S. light, sweet crude fell to a low on Monday of $27.15 before bouncing more than a dollar on news of OPEC's planned meeting. U.S. crude for May delivery was trading at $28.12 by early afternoon in New York, still 50 cents lower than Friday's close.\nIn London, contracts of North Sea Brent crude for May delivery slipped as low as $23.40 a barrel before rebounding in the afternoon to $24.50, down 18 cents from Friday's close.\nOnly last month, OPEC signaled that it would pump more oil to make up for any supply disruption caused by hostilities in Iraq. Although members agreed in March to stick with their production target of 24.5 million barrels a day, some analysts say that rampant quota-busting has boosted OPEC's current output to around 27 million barrels a day.\nKevin Norrish, head of commodities research at Barclays Capital, said OPEC is right to be concerned about weak prices.\nSaudi Arabia, the group's biggest member, has made "a massive increase" in output, while exports from Venezuela are growing steadily following the recent collapse there of a nationwide strike. Output in Nigeria is starting to recover from disruptions caused by social unrest, and Iraq will eventually resume production, Norrish said.\nDemand typically falls in the second quarter due to declining sales of winter heating oil in the northern hemisphere. Demand for gasoline often doesn't pick up until the peak summer driving season.\nThis year, springtime demand is expected to fall more sharply than usual. With a wartime supply shortage looking unlikely, oil-importing countries will stop buying crude for their strategic reserves, Norrish said.\n"I think OPEC is correct to identify the possibility of a sharp fall," he said. "They're being pre-emptive because once the market starts to get away from them it could be very difficult to bring it back."\nIf OPEC does nothing to cut production, Norrish predicts that U.S. crude futures will fall to $21.50 by June or July.\nOne item that won't be on the agenda for this month's meeting is how to reintegrate Iraq into OPEC's production-quota system. Iraq hasn't participated in the group's production agreements since the 1991 Gulf War because the United Nations has regulated its exports.\nA postwar government in Iraq would almost certainly want to maximize crude exports to help pay for reconstruction. Such a policy would further add to global supplies unless other OPEC members, chiefly Saudi Arabia, agree to reduce their own quotas to make room for a resurgent Iraq.\nThis issue is potentially explosive, and the OPEC source said oil ministers have deferred trying to tackle it until at least June, when they plan to meet again in Doha, Qatar.
(01/13/03 5:11am)
VIENNA, Austria -- OPEC members agreed Sunday to boost the cartel's oil production target by 6.5 percent to stabilize a world market jittery over a crisis in Venezuela and the possibility of war in Iraq.\nThe increase of 1.5 million barrels a day -- to 24.5 million barrels -- would take effect Feb. 1, OPEC President Abdullah bin Hamad Al Attiyah told a news conference at the group's headquarters in Vienna.\nAl Attiyah confirmed that the Organization of Petroleum Exporting Countries wants to keep prices of its benchmark blend of crudes at $22-$28 per barrel. Friday prices hovered around $30.\nEarlier in the day, Saudi Arabian Oil Minister Ali Naimi said the ceiling should remain at 23 million barrels. Saudi Arabia is OPEC's most influential member and has the bulk of the cartel's spare production capacity.\nOPEC said it wanted to calm fears of a supply crunch caused by an ongoing strike in Venezuela. The agreed output hike was near the upper end of what analysts expected.\nThe strike, launched Dec. 2 by political opponents seeking to oust President Hugo Chavez, has slashed Venezuela's exports by about 2 million barrels a day. Venezuela normally is OPEC's third-largest producer and a major oil supplier to the United States.\n"OPEC is trying to send a very strong message that it will do its utmost to stabilize demand and supply," Al Attiyah said after delegates reached their decision in informal talks.\n"Now we will wait for the market to react."\nThe United States praised the move, saying the hike would support economic growth and stability.\n"It's a global oil market and the more oil on the market the better for all," U.S. Energy Department spokeswoman Jeanne Lopatto said Sunday. "Instability in the oil market hurts producing and consuming countries alike."\nHowever, Al Attiyah said the arrangement would be only temporary. When Venezuela resumes its normal level of exports, the group's members will meet again to reassess its production target, he said.\nIt appeared the actual increase in output would be somewhat smaller than 1.5 million barrels a day, as Venezuela is unable now to use its higher quota.\nThe suddenness of OPEC's decision to call the meeting reflects its surprise at the deterioration in market conditions. Oil ministers for four of the group's 11 members could not make it because of prior commitments.\nA fifth minister, Libya's Abdulhafid Mahmoud Zlitni, was due to arrive Sunday but canceled his trip because a sandstorm prevented his plane from leaving the Libyan capital, Tripoli.\nCrude prices surged in recent weeks but then fell sharply in anticipation of OPEC's boosting production. Fears about a possible U.S.-led war against Iraq have put upward pressure on world prices.\nAl Attiyah insisted that OPEC had not been pressured by the United States or other importers to approve a large increase in production.\nOPEC's new production ceiling will be shared among 10 members, but not Iraq. Although it is the 11th member, Iraq does not participate in the group's production agreements because the United Nations oversees its exports under sanctions dating to the 1991 Persian Gulf War.\nOPEC pumps about a third of the world's crude supplies, which total 79 million barrels a day.\nVenezuela resisted the Saudi plan for fear of losing market share to OPEC partners that have spare capacity, said Ali Rodriguez, head of the state-run Venezuelan oil company Petroleos de Venezuela S.A.\nRodriguez, speaking at a separate news conference, said his company aimed to increase its production by February to 2.5 million barrels a day from its current, constrained level of 700,000 barrels. Other delegates expressed doubt that Venezuela could restore output so quickly.\nThe main message for the oil market is that "there will be more barrels," said Yasser Elguindi of Medley Global Advisers, a New York consultancy.\nBut, "I think this is a very confusing and difficult message, and it will take a while for the market to work out the logistics of it," Elguindi added.\nIraq has the second-biggest oil reserves after Saudi Arabia, and there has been a steady buildup of U.S. troops in the Persian Gulf.\nOn the New York Mercantile Exchange, February contracts of light, sweet crude futures fell 31 cents Friday to close at $31.68. On London's International Petroleum Exchange, February Brent crude ended at $29.67 a barrel, up 3 cents.\nOPEC announced its final decision at a hurriedly called news conference after canceling plans for a formal meeting.
(04/11/02 3:55am)
LONDON -- OPEC has no plans to pump more oil to replace the crude Iraq is withholding from the market, reasoning that the recent spike in oil prices will ease once violence between Israel and the Palestinians abates, the group's top official said Wednesday. \nOPEC Secretary-General Ali Rodriguez defended the decision to keep output steady until at least late June by insisting that global supplies were "normal" in relation to the physical demand for crude. \nOil prices seesawed on a day of conflicting market signals. Iran's oil minister reaffirmed that his country wouldn't join Iraq in suspending its crude exports unless other Muslim countries also do the same. \nHowever, the International Energy Agency warned that political uncertainties in the Middle East and labor strife in Venezuela could yet upset the market. \nMay contracts of North Sea Brent crude rose 22 cents a barrel in London before slipping to $26.10, up 2 cents from Tuesday's close. In New York, contacts of light, sweet crude for May delivery jumped 48 cents and then eased slightly to $26.15, up 33 cents. \n"Twenty-six dollar Brent isn't a terrible, terrible number," said Peter Gignoux, head of the petroleum desk at Salomon Smith Barney. But he hastened to add: "It's not a great number." \nThe big question, Gignoux said, is how quickly other oil producers can replace the crude that Iraq has kept away from markets. Iraqi President Saddam Hussein suspended oil exports on Monday for 30 days or until Israel withdraws from the Palestinian territories. \nIraq, which has a daily production capacity of 2.5 million barrels, exports at least 1.8 million barrels a day under the close supervision of the United Nations. Iraq is OPEC's third-largest producer but doesn't participate in the group's production agreements. \nIran and Libya had earlier expressed support for the idea of using an embargo as a means of pressuring the United States to lean on Israel to end its military offensive against the Palestinians. \nLibya has been quiet on the issue since Iraq began its boycott, but Iranian Oil Minister Bijan Zangeneh insisted that Iran would not act on its own to suspend its crude shipments. Iran is OPEC's second-largest producer after Saudi Arabia.