OPEC Sucks Donkey Dongs

OPEC Loves World Economic Crisis: Plans To Force Oil Prices Through The Roof

ALGIERS: Current OPEC President Chakib Khelil refused Saturday to rule out another cut in the cartel’s output if the price of crude oil remains below $70 per barrel before an OPEC meeting in December. “We have always said that our objective is $70 to $90 a barrel,” said Khelil, who is also Algeria’s energy minister, at an energy industry seminar in Algiers.

“If the barrel price does not reach this level, there will probably be another [production] cutback,” he said, adding however that there must be consensus among all OPEC nations, “and everyone has their own interests.” Oil prices closed mixed Friday after striking 21-month lows, with light sweet crude for delivery in December at $60.04 in New York and Brent North Sea crude for December at $57.35 in London.

The Organization of Petroleum Exporting Countries – which accounts for 43 percent of the world’s crude oil – decided on October 24 to cut output by 1.5 million barrels a day, after the crude oil price fell by half from its July record high of more than $147 (115 euros).

The cartel’s total daily output was thus set at 27.3 million barrels per day – but Khelil’s remarks left open the prospect of another cut ahead of an extraordinary OPEC meeting in Oran, Algeria, on December 17.

“We could always discuss another cut in production, but whether there will be consensus, I cannot say for now,” Khelil said. “We have to await news that we are going to have within a month to see what is going to happen.”

He said the Oran meeting “will take stock of the oil market situation” in the wake of the October 24 meeting in Vienna, where OPEC is headquartered, “and study the market outlook for the first half of 2009.”

He said the oil market is now seeing “a downward trend in 2008 and 2009 … a stronger dollar … relatively high OPEC production and an acceptable level of trading inventory.”

Industrialized nations, he went on to say, have entered “a recessionary phase due to the financial crisis that will weaken them and continue into 2009,” resulting in “a strong contraction in oil demand.”
“The retreat of crude oil prices is the result of this situation,” he said, adding that “OPEC’s strategy has always been to call for, and work for, a fair oil price” for producers and consumers alike.

Ahead of the Oran meeting, the Arab member states of OPEC will meet in Cairo on November 29, Khelil added. Besides Algeria, they are Kuwait, Libya, Qatar, Saudi Arabia, the United Arab Emirates and Iraq.

Other OPEC members include Iran, Venezuela, Indonesia, Nigeria, Ecuador, Angola and Gabon.
Khelil deplored the fact that non-OPEC oil producers had failed to cut back on production in order to stabilize prices.

“We cannot impose OPEC’s decisions,” he said. “We asked Russia to help us; it replied that it had other priorities. Norway refused and Mexico did not answer.” On Wednesday, Russia said it was ready to cooperate with other oil producing nations to support the price of crude, but let it be known that it held the final say over how much it would pump out of the ground.

“Russia now is the first or second oil producing country and it has the right to determine its own position,” said Russian deputy prime minister Igor Setchin, when asked about Moscow’s willingness to coordinate with OPEC.

Russia accounts for 12.6 percent of global oil production.

by Abdelleh Cheballah, (AFP)