By Mahmoud Kassem and Maher Chmaytelli
Nov. 28 (Bloomberg) -- OPEC ministers, arriving in Cairo for a meeting tomorrow, said they may delay a decision on production levels until December as they assess the impact of their last supply cut amid falling demand.
“Now we are preparing the data and we will take the final decision in Algeria,” Iranian Oil Minister Gholamhossein Nozari said at his hotel in Cairo. Saudi Oil Minister Ali al-Naimi declined to speak as he arrived in Egypt today.
Qatari Oil Minister Abdullah bin Hamad al-Attiyah and Kuwaiti Oil Minister Mohammed al-Olaim also said the group would probably wait until its Dec. 17 conference in Oran, Algeria, before making a final decision. OPEC agreed last month to reduce production quotas by 1.5 million barrels a day.
The 13 members of the Organization of Petroleum Exporting Countries, which supply more than 40 percent of the world’s oil, are meeting for the third time in as many months to discuss a further cut in production after crude prices plunged more than 60 percent from July’s all-time high of $147.27 a barrel in New York.
“The market is very related to the global economic crisis,” al-Attiyah said after arriving at Cairo airport today. “There’s pressure on demand.”
Brent crude oil for January delivery rose 0.1 percent to $53.19 a barrel at 1:19 p.m. on London’s ICE Futures Europe exchange, after falling 1.5 percent yesterday when New York trading was shut.
Full OPEC Meeting
The Cairo meeting, originally intended just for ministers from Arab nations, was expanded into a full OPEC gathering including countries such as Venezuela, Iran and Angola.
“Presenting a moderate stance, but with a clear message that supply will be cut in Algeria, is the most likely outcome from the Cairo meeting,” Lawrence Eagles, global head of commodities research at JPMorgan Chase & Co. in New York, said in a Nov. 25 research note.
“If OPEC producers agree to cut production, we will support it,” Venezuelan Oil Minister Rafael Ramirez said today in Cairo. Venezuela is “concerned” the oil market is oversupplied, he said, adding that “stocks are very high.”
Ramirez’s comments were echoed by United Arab Emirates Oil Minister Mohamed al-Hamli, who said the market is “certainly oversupplied,” and by Kuwait’s al-Olaim.
“There is a surplus on the market,” al-Olaim said today at Kuwait airport. “Everybody knows that. The decline in demand is there and it is a big amount” because of the slowdown in the global economy.
‘Firm, Reasonable Decision’
“At this meeting maybe we will not see a cut because we still need to see more information” on the market, which may not be available for another two weeks, he said. “We have to take a decision, a firm and reasonable decision, but we have to take it a little bit later.”
OPEC produced 32.18 million barrels of crude a day in October, according to Bloomberg estimates. The target output for 11 members with quotas is 27.3 million barrels a day in November. Last month, actual production from those 11 was 29.1 million barrels a day, according to Bloomberg data.
Economic reports this week showed a deepening recession in the U.S., the world’s largest oil user. Consumer spending slumped the most in seven years and orders for durable goods including refrigerators and washing machines declined twice as much as forecast, the Commerce Department said Nov. 26.
Eleven years ago, OPEC members bickered over quotas as oil prices slid 28 percent in 10 months amid the onset of the Asian financial crisis. At a meeting in Jakarta in November 1997, they raised quotas, even as economic turmoil in Asia was slowing demand and prices fell another 44 percent by December 1998 to a low of $10.35 in New York.
“We have seen this cycle before, just nine years ago the price was below $10,” al-Attiyah said today. “For the last 20 years this is a normal cycle, but we will come back.”
To contact the reporters on this story: Mahmoud Kassem in Cairo at mkassem1@bloomberg.net; Maher Chmaytelli in Cairo at mchmaytelli@bloomberg.net
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