Retrieved From: Lexis Nexis
Date: October 29. 2008
Title: OPEC Says Oil Markets Need Time To Adjust To Output Cuts
Byline: Daniel Booth, Margaret McQualie, Jacinta Moran.
Length: 533 Words.
Link to relevant WorldOilNews blog posting.
World oil markets need time to react to OPEC's decision last week to cut supply by 1.5 million b/d from November, the cartel's Secretary General Abdalla el-Badri said October 28, adding he was not overly worried by the fact that oil prices had declined further after the deal was announced.
"We just have to give some time to the market to react. This is an abnormal situation," Badri said, referring to the fact that OPEC was trying to restore equilibrium to world oil markets against a background of global financial turmoil.
International crude benchmarks have fallen by some $87/barrel since peaking above $147/b in early July. Earlier this week, North Sea Brent crude futures traded at $59.02/b, its lowest level in 19 months.
Badri, speaking on the sidelines of the annual Oil & Money conference in London, added that if circumstances warranted new action by OPEC, the group would meet again.
Qatari Oil Minister Abdullah al-Attiyah, also particating in the conference, said he thought OPEC was unlikely to call another emergency meeting before its next scheduled conference on December 17 in Oran, Algeria. "I don't think we will meet" before December, he said.
Badri, meanwhile, said OPEC did not like dramatic price movements up and down, and that this kind of volatility was good neither for producers, consumers or investment. "If we have a price decline, then most of our projects will be either delayed or canceled," Badri warned.
Qatar's Attiyah said many companies were requesting delays to their planned cargo lifting dates as the global financial crisis continued to deepen. "We are seeing a lot of lifters ask to start delaying lifting," he said. "Today is the first time we are seeing a global financial crisis...Today we are seeing a lot of oil and no one will buy it."
Paolo Scaroni, CEO of Italian oil and gas major Eni, said the oil industry expected prices to continue to fall. "Everyone in this room is agreed that the oil price will continue to collapse and stay there," he said, adding this could lead to a new price spike three or four years from now.
OPEC's decision to cut production last week drew criticism from consumers, including the UK, whose energy minister Mike O'Brien described the move as "disappointing."
But Badri said the world should not look to OPEC to help find a way out of the current financial crisis. "What surprises me is that everybody is looking to OPEC to bail out this crisis," he said. "Please don't look at us to bail you out."
Meanwhile, the UAE's Abu Dhabi National Oil Company said October 28 it will cut crude allocated to term customers loading in November and December as part of its commitment to OPEC's 1.5 million b/d oil output reduction starting in November.
ADNOC will cut 5% of its Upper Zakum grade loading in November to buyers with long-term agreements, an ADNOC official said. In addition, the producer will cut by between 5% and 15% four grades of crude, including Upper Zakum, allocated to term customers in December.
ADNOC will cut 5% of Upper Zakum term liftings in December, along with a 15% cut in Murban, a 10% cut in Lower Zakum and a 5% reduction in Umm Shaif.
Margaret McQuaile, Jacinta Moran, with Daniel Booth in Singapore
No comments:
Post a Comment