OPEC
maintains oil quota, Iran ambiguous over crude exports
AP
OPEC President Edmund Maduebede Daukoru and Nigerian Petroleum
Resources Minister
By Zoltan Simon and Ben Perry
AFP
VIENNA
Petroleumworld.com
03 08 06
OPEC kept its oil output quota at a near 25-year high here on
Wednesday, as major energy producer Iran blew hot and cold on
whether it would halt crude exports if punished over its nuclear
programme.
After the Organization of the Petroleum Exporting Countries decided,
as expected, to keep official production at 28.0 million barrels
per day, world oil prices plunged below 60.0 dollars per barrel
in New York and London.
However the sharp drop was owing mainly to official data that
showed US crude oil inventories were at the highest level in nearly
seven years, analysts said.
Prices had traded at almost 64.0 dollars per barrel in New York
just last Friday amid ongoing tensions in key energy producers
Iran and Nigeria -- twin concerns that had led OPEC Wednesday
to decide against cutting output.
In Nigeria, Africa's biggest producer of crude and a member of
OPEC, attacks by militants on the country's oil installations
have forced a 20.0-percent cut in the country's crude production.
OPEC tends to reduce its crude production during the second quarter
in response to lower demand for heating fuel following the end
of the northern hemisphere winter.
But in its communique following the latest one-day ministerial
meeting, it said:
"Although all indicators show that the market is fundamentally
well-supplied with crude oil... prices remain volatile, these
being driven by geopolitical factors and associated concerns regarding
potential future supply disruptions."
It added that it had decided to maintain the current production
ceiling "in order to contribute further to market stability
and robust global economic growth, as well as maintain prices
at levels reasonable to both producers and consumers".
OPEC was set to meet next on June 1 in member-nation Venezuela,
but some ministers have indicated that it could possibly gather
in late April on the sidelines of the 10th International Energy
Forum in Doha.
The cartel's latest meeting was dominated by concern over the
potential impact on the market of Iran's nuclear standoff with
the West.
Speaking after OPEC had maintained its output, Iranian Oil Minister
Kazem Vaziri-Hamaneh gave assurances that his country, the second
biggest producer in OPEC, would not halt its oil exports, even
if hit by economic sanctions over its nuclear programme.
But a top Iranian security official, also speaking in Vienna,
said Iran would have to "review" its policies in case
the political environment changed.
"We will not use the oil weapon now because we don't want
to confront other countries," Javad Vaidi told AFP on the
sidelines of a meeting of the UN nuclear watchdog, the International
Atomic Energy Agency.
"But if the situation changes, we will have to review our
politics and adopt our policy."
The IAEA met here this week to discuss a report on Iran's nuclear
activities, which the United States and the European Union fear
could have military applications despite denials by Tehran.
Iran's Oil Minister Vaziri-Hamaneh meanwhile insisted on Wednesday:
"(Iranian) Oil flow is continuing. The exports will not be
stopped."
He comments came after the 11-member OPEC, which produces 40.0
percent of world crude, had held its 140th official meeting on
Wednesday.
"We are not interested in cutting production," Saudi
Arabian Oil Minister Ali al-Nuaimi told reporters after OPEC decided
to maintain its quota, which has remained at 28.0 million barrels
per day for eight months.
"We hope we don't have to" cut production this year
added al-Nuaimi, whose country is the world's biggest producer
of crude.
Among OPEC's members, only Venezuela had called publicly for a
cut -- of 500,000 barrels per day -- at Wednesday's meeting, arguing
that the oil market was oversupplied.
The cartel is actually producing more than 29.0 million barrels
of crude per day including output from Iraq, which is not included
in the official quota.
"Crude is still flooding in despite supply disruptions,"
Societe Generale analyst Deborah White said in London on Wednesday,
adding that the extra oil was weighing on prices.
On Wednesday New York's main contract, light sweet crude for delivery
in April, dived 2.03 dollars to 59.55 dollars per barrel in pit
trading.
In London, the price of Brent North Sea crude for April delivery
sank 1.67 dollars to 59.50 dollars per barrel in electronic deals.
OPEC, which is headquartered in Vienna, has Saudi Arabia as its
biggest producer followed by Iran, Venezuela, Kuwait, the United
Arab Emirates, Iraq, Nigeria, Libya, Indonesia, Algeria and Qatar.
AFP
03 08 06
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