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OPEC targets stability, vows vigilance on prices
AP / Ronald Zak
OPEC group President and Nigeria's Minister for Petroleum Resources Edmund Daukoru gestures as he talks during a press conference after a meeting of the Organization of the Petroleum Exporting Countries (OPEC) at their headquarters in Vienna, Monday, Sept. 11, 2006.By Adam Plowright
AFP
VIENNA
Petroleumworld.com 09 12 06
OPEC ministers decided after a meeting Monday to maintain their output ceiling at a 25-year high of 28 million barrels per day but said they were ready to respond to sharp price changes.
Qatari Energy Minister Abdullah bin Hamad al-Attiyah said the production quota implemented by the Organisation of Petroleum Exporting Countries would continue unchanged for now.
"We roll over," he told reporters.
However, the 11 oil-producing nations pledged in a statement to remain vigilant about developments in oil markets.
They said they were ready "to take decisions" if necessary at their next meeting on December 14 in Nigeria.
"Moreover, in light of the many downside risks identified, the Conference also agreed that its President would make the necessary consultations prior to the December Meeting, should market conditions so warrant," the OPEC statement added.
World oil prices fell to their lowest points since late March on Monday on easing concerns over an Iran-United Nations standoff prompted by Tehran's nuclear program.
In London Brent North Sea crude dropped below 64 dollars per barrel and in New York, light sweet crude fell under 65 dollars, just two months after they peaked at the 78 dollar mark.
OPEC said oil prices had "moderated substantially in recent weeks".
"The Conference reiterated that the Organization will continue its proactive policy of supporting market stability by restoring a balance between supply and demand, at prices reasonable to both producers and consumers and conducive to continued world economic growth," the statement added.
However, the oil producing nations signalled that they were "continuing to vigilantly monitor supply/demand fundamentals" and were ready to react to any major fall in prices.
"The Conference stressed its determination to ensure that crude oil prices remain at acceptable levels and Member Countries recorded their preparedness to respond rapidly to any developments which might jeopardize their interests," the statement said.
"A price that's too low would be below 60 dollars a barrel," Venezuela's Energy Minister Rafael Ramirez said shortly before the meeting.
OPEC's policy of maintaining stability in recent years was largely aimed at stemming overheating prices after oil tripled in value from 2002 on surging global demand.
However that policy could be switched later to stop prices dropping too shaprly by reducing the production ceiling or reining in output, analysts and ministers have said.
"If we feel the market needs to cut to stabilise, we will do (so)," Attiyah said on Sunday.
Some analysts believe the forecast slowdown in the world economy next year could amplify a seasonal dip in demand that traditionally follows winter in the western hemisphere, when consumption peaks in industrialised countries.
OPEC'S president, Nigerian Oil Minister Edmund Daukoru recognised that the cartel's production quota system had effectively been put aside by members in order to keep the market well supplied.
"It was never meant to be rigid. We had be flexible with it," he said.
The 10 cartel members bound by production ceilings were unable to meet their ceiling in July of 28.0 million barrels per day, falling short of the target by about 500,000.
Furthermore, the internal system of quotas, which requires each country to respect a specified limit, has also lost shape.
Some countries are producing less than their allowance while others are over-producing and making up the shortfall.
Individual quotas have been deliberately left in a state of "benign neglect", the OPEC President said.
AFP 11 1808 GMT 09 06
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