OPEC Shuns Calls to Hike Oil Output
From Chika Amanze-Nwachuku in Vienna, Austria, 02.02.2008
Despite repeated calls by the United States for more oil to be pumped into the international market, Nigeria and 12 other members of the Organisation of Petroleum Exporting Countries (OPEC) yesterday resolved to maintain output quotas of 29.67 million barrels per day citing fears that a softening global economy would translate into weak demand.
At its 147th Extraordinary Meeting in Vienna, Austria, the group after a review of oil market developments since its December 2007 meeting in Abu Dhabi, United Arab Emirates, concluded that the market was well supplied, asserting that to further increase production quotas would be counterproductive.
In a communique issued at the end of the meeting, the ministers noted that stockpiles of crude were likely to increase in the first half of this year.
“It is observed that OPEC production decisions had ensured that the market remained well supplied throughout 2007. It is also noted that the first half of 2008 was likely to witness a crude inventory build up, and supply and demand forecasts indicate that commercial oil stocks are in line with the seasonal trend and are expected to remain within their five-year average during the traditionally lower demand season.
"In view of the current situation, coupled with the projected economic slowdown, the conference agreed that current OPEC production is sufficient to meet expected demand for the first quarter of the year.
"At the same time, however, the conference noted that the significant uncertainties associated with the projected downturn in the global economy called for vigilant attention to their impact on key market fundamentals of supply and demand until its next meeting on March 5, 2008,” the group said while reiterating its determination to take every measure to keep the market stable.
Speaking with newsmen after the conference, Minister of State for Petroleum and leader of the Nigerian delegation, Mr. Odein Ajumogobia (SAN) noted that the group was closely monitoring the market situation as a demonstration of its responsiveness to the plight of consumer nations.
“Nothing has really changed since after the December meeting. We all agreed to keep things as they are,” he said.
On his part, OPEC President and Algerian Minister of Energy and Mines, Chakib Khelil said the focus should not be about the lack of oil but about the economic crisis, maintaining that supplies are not at risk.
“The world should not be concerned about the lack of oil. We are more concerned about the economic crisis and its ramifications and impact on the world economy.”
Crude oil prices reached a record high of $100.09 on January 3, a development which heightened calls by the US to increase output. Total OPEC output is estimated at about 31.5 million barrels a day – representing about 40 percent of daily world demand.
