Opec Rejects Pressure from Hawks for New Cut in Oil Output after Price Slide
The Opec cartel has resisted calls from hawkish members to reduce oil output and instead urged better compliance with the cut agreed in December of 4.2 million barrels per day.
The cartel pledged yesterday to remove an overhang of surplus oil in the market by not exceeding its target production of 24.8million barrels per day (bpd). The 11-strong club of oil exporters is overshooting the agreed quota by 800,000 bpd.
Russia said yesterday that it would be appointing a permanent observer to attend the cartel's meetings, a signal of the closer interest that the Kremlin is showing in Opec's deliberations.
Before yesterday's Opec meeting, Igor Sechin, the Russian Deputy Prime Minister, promised to join in any cut and said that Russia had joined in the recent cut with a 1.9 per cent fall in Russian output in January against a year earlier. He promised to host a meeting of oil producers in Russia at the end of the year.
The Russian gesture was, however, dismissed by oil analysts, who said that Russia's output fall was a result of lack of investment rather than voluntary restraint.
Abdalla Salem el-Badri, Opec's secretary-general, said that better compliance “will reduce the overhang” of oil in the market. Mr el-Badri said: “If we have more compliance, we can reduce [the overhang] further. We've called another meeting in May. If something happens between now and May, we will have to correct the market in May.”
Opec members have suffered a huge cut in revenue because of the two thirds fall in the price of crude oil since July last year. The output cut agreed in December arrested the decline and Brent crude has hovered at about $45 per barrel, but Saudi Arabia has said that it believes $75 to be an appropriate price for crude.
The cartel pledged yesterday to remove an overhang of surplus oil in the market by not exceeding its target production of 24.8million barrels per day (bpd). The 11-strong club of oil exporters is overshooting the agreed quota by 800,000 bpd.
Russia said yesterday that it would be appointing a permanent observer to attend the cartel's meetings, a signal of the closer interest that the Kremlin is showing in Opec's deliberations.
Before yesterday's Opec meeting, Igor Sechin, the Russian Deputy Prime Minister, promised to join in any cut and said that Russia had joined in the recent cut with a 1.9 per cent fall in Russian output in January against a year earlier. He promised to host a meeting of oil producers in Russia at the end of the year.
The Russian gesture was, however, dismissed by oil analysts, who said that Russia's output fall was a result of lack of investment rather than voluntary restraint.
Abdalla Salem el-Badri, Opec's secretary-general, said that better compliance “will reduce the overhang” of oil in the market. Mr el-Badri said: “If we have more compliance, we can reduce [the overhang] further. We've called another meeting in May. If something happens between now and May, we will have to correct the market in May.”
Opec members have suffered a huge cut in revenue because of the two thirds fall in the price of crude oil since July last year. The output cut agreed in December arrested the decline and Brent crude has hovered at about $45 per barrel, but Saudi Arabia has said that it believes $75 to be an appropriate price for crude.
quoted from: Times Online
