OPEC
set to ignore Iranian call to reduce output: analysts
By
Amelie
Herenstein
AFP
PARIS
Petroleumworld.com 01 27 06
OPEC, which next week will set its policy for the coming months,
is likely to steer clear of a conflict pitting Iran against Western
oil consuming nations by rejecting Tehran's call for a cut in
production, experts say.
The Organisation of Petroleum Exporting Countries was due to meet
Tuesday in Vienna just two days before the UN's nuclear watchdog
covenes in the same city to decide whether to refer Iran to the
UN Security Council for possible sanctions.
OPEC, which pumps about 40 percent of the world's oil, has to
decide whether or not it should cut its output in the second quarter,
when demand usually eases as warmer weather comes in the northern
hemisphere.
Iran, the cartel's number-two producer behind Saudi Arabia, has
called for a cut from April of a million barrels per day (bpd)
from the current production ceiling of 28 million bpd.
And it warned last week of a world oil crisis if sanctions were
imposed over its nuclear program, which it insists it is entirely
peaceful but which Western countries suspect is a clandestine
nuclear weapons project.
But Tehran is likely to find itself isolated next week when the
oil cartel, which says it is an apolitical organisation, meets
in its Austrian headquarters, analysts say.
Saudi Arabia said this week it expected OPEC to maintain current
output levels and that the oil-rich kingdom could even increase
supply in the last quarter of 2006 if demand warrants.
"Unless the market changes significantly between now and
the meeting, there is probably no real reason to do anything different,"
Saudi Oil Minister Ali al-Naimi said during a visit to India.
Comments such as that have helped world oil prices fall back from
the 69 dolars they reached at the start of this week. But as they
hovered around the 65-dollar mark Thursday they still guaranteed
sound revenues for producers.
"Barring surprises, I don't think (OPEC countries) will budge,"
said Pierre Terzian from the Petrostrategies group of oil-industry
analysts in Paris. "They think the prices are good, the market
is well supplied and they will probably meet again before the
second quarter."
Even Venezuela, Latin America's only OPEC member and another country
at odds with the United States, is unlikely to back Iran's call
for a cut in production, said Terzian.
"But even if it does that won't be enough. The others don't
want it. Saudi Arabia, Kuwait, the Emirates, don't want a cut
for the moment," he said.
Bruce Evers, an analyst with Investec in London, agreed.
"They'll say the market is well supplied and prices are where
they are for reasons beyond their control," he said.
"They will monitor the situation. They could easily have
a conference call to cut production if the need arises. But with
prices in the mid-60s, it would be irresponsible to cut production
with demand continuing to rise."
The recent attacks on oil plants in Nigeria, Africa's biggest
oil producer, have also put pressure on world crude prices and
make it unlikely that OPEC will opt for a production cut at its
meeting next Tuesday.
The cartel was set to meet again on March 8.
AFP
01 26 06
Copyright
© 2006 AFP. All rights reserved
Send
this story to a friend
Your
feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write
to editor@petroleumworld.com
Any
question or suggestions, please write to:
editor@petroleumworld.com
Best
Viewed with IE
5.01+
Windows
NT 4.0, '95, '98 and ME +/ 800x600 pixels
|
|
