OPEC unlikely to cut production
no surprise here. why would they want to cut production when oil is at $~60 a barrel? they'd cause a nasty oil shock that could permanent damage the world's economies
fossil_fuel: I think the news media is reporting that demand for oil has been declining.
depends on who's numbers you believe. if demand has been declining, why has the price remained fairly constant in the low to mid 60's? if demand is declining and the price is staying the same, it would mean that supply is declining as well... and i don't think that most people are ready to admit that we've reached peak oil.... YET
i would agree that demand GROWTH is slowing, however.
Considering that I'm paying less than the inflation-adjusted price of gasoline in 1974, they could jack the price of a barrel a few bucks, and I'd be hard pressed to get pissed off over it.
One, reason why the Arabs will be keeping the spigots for the crude oil max'ed out, wide-open is to blunt the fact that Geo. Bush Jr. said that we the USofA is going to be petreolum independent within x years. This is scarcing the $hit out of the Middle East. Remember, what else do those countries export outside of that region? Pastashios, dates, and various other inconsequential nick-nacks, and their pastashios are repidly being pushed aside by the Calif pastashio. Those countries will be in world of hurt when and IF the USofA finds that it is not necessary to buy crude oil from them. And in the short-term, to take advantage of the record high oil prices.
OPEC to keep pumping at full tilt
Cartel president says there are too many geopolitical factors to cut production; Iran issues warning to regulators.
March 8, 2006: 8:41 AM EST
VIENNA (Reuters) - OPEC reassured Wednesday it will keep oil output close to the limit to bring prices within consumers' comfort zone and fill supply gaps, but a threat by Iran to review its oil exports undermined the message.
Iran issued its warning at the United Nations' International Atomic Energy Agency, even as the nation's oil minister sat down across town with OPEC colleagues to discuss oil output, export disruptions in Nigeria and Iraq, and prices above $60 a barrel.
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OPEC ministers said there will be no change to the group's 28 million barrels per day (bpd) ceiling that has been in place since July 2005, despite forecasts for lower demand in spring. An OPEC delegate told Reuters a formal agreement had been reached.
"There are simply too many geopolitical factors to change production," OPEC President Edmund Daukoru said.
At the Vienna-based IAEA, the tone hardened in talks over Iran's uranium enrichment work. Failure to agree could leave the world's fourth-biggest oil exporter at risk of sanctions.
Javad Vaeedi, deputy secretary of Iran's Supreme National Security Council, said Iran would have to review its oil policies if world pressure grew over its atomic program.
Rebel attacks have cut exports from the world's eighth-biggest supplier, Nigeria, by 11 million barrels since the start of the year. Fellow OPEC member Iraq is in crisis, and oil prices are at their highest level in real terms in 25 years.
On Wednesday, U.S. crude stood at $61.35 a barrel, down 23 cents.
But supply and demand numbers tell a different story.
OPEC's economists forecast world oil demand will slow in the second quarter. Iran is struggling to sell its hard-to-refine high-sulfur crude and top exporter Saudi Arabia has kept output flat since May 2004 in response to its customer needs.
Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah said OPEC is working to bring U.S. crude below $60. He believes there is no need for the organization to cut output all year.
"If we continue with the same production, I believe the price will go below $60 in the second quarter," the minister said.
Saudi Arabia, the most influential voice in OPEC, has said it believes a production cut now would be counter-productive.
Fellow OPEC ministers have lined up in support, drowning out price hawk Venezuela's call for the group to look at reducing production by 500,000 barrels daily.
Some analysts are looking with concern to the peak winter season, fearing OPEC, which pumps more than a third of the world's oil, may struggle to meet demand if output problems persist. "If demand continues to be strong we are going to be struggling," said Yasser Elguindi, senior managing director at Medley Global Advisors. "OPEC appears to be taking the view that the risks are weighted more to the upside than the downside."
Demand from the United States, consumer of a quarter of the world's oil, and China has been the main driver in a rally that has seen prices double in the past two years.
So far the world economy has coped, but analysts say an upward shift of $10 a barrel for about two years would begin to bite, driving inflation about 0.25 of a percent a year higher and paring growth by the same amount.