OPEC, which controls about half of world oil exports, was due to meet in the Venezuelan capital, Caracas, on 31 May, against the backdrop of world prices reaching new record levels above $US70 per barrel, reported The Australian Financial Review, (31/5/2006, p.15).
OPEC to keep 28m barrel/day llimit: Asked on Monday local time if OPEC would alter its 28 million barrel-per-day ceiling, OPEC president Dr Edmund Daukoru replied: "I don’t see it. We will just free ride. We will all do the best we can within our capacities, without formally announcing unrestricted production. Asking people to do more when they are already doing all they can doesn’t make sense. I don’t think anyone is holding back spare capacity," said Dr Daukoro, who is also Nigerian Minister of State for Petroleum.
Member nations support Daukoro’s claim: His comments were in line with recent statements by fellow members Iran, Kuwait and Algeria, in which they advocated no change for the 10 members subject to quotas. Eleventh member Iraq, which pumped 1.95 million barrels a day in April, is exempt from the quota system.
Oil exporters wary of competition from alternatives: Dr Daukoro said oil exporters did not want prices at levels that would divert investment into competing energy sources. "We don’t want prices to trigger investment in alternatives, where these alternatives are still immature technologies and divert investment away from oil."
Productions cuts could see prices rise to $US100/barrel: Host Venezuela, which has become the cartel’s fiercest price hawk under left-wing president Hugo Chavez, said OPEC should cut production because there was already too much oil in stock. Some analysts have forecast that prices could spike above $US100 a barrel if any major supply interruption occurs as global demand rises towards the end of the year.
OPEC unable to enforce price: Dr Daukoro, who previously spoke of $US50 to $US60 as an acceptable level, said he had given up talk of a price target because OPEC did not have enough spare capacity to enforce it.
Source: Erisk Net