As OPEC Ponders Production Ceiling, Members Complain About Oil Prices
VIENNA, Austria (AP) _ OPEC ministers met today to debate how much oil to pump next year, grumbling as usual about the price but offering few clues on what they might do about it.
OPEC President Erwin Arrieta called the rise in non-OPEC oil production the biggest issue facing oil markets, citing ``an imbalance which points toward the potential risk of entering into a dangerous price war.″
OPEC members have recently stood on the sidelines as other producers, such as oil companies working in the North Sea, boost production to meet the rise in world demand.
Ministers have said OPEC is likely to roll over its production ceiling of 24.52 million barrels of crude oil a day, but some analysts say this might not be enough to support prices if some OPEC members don’t stop cheating.
OPEC has been selling oil for about $4 to $5 below its target of $21 a barrel. Before going into the closed-doors meeting, many OPEC ministers expressed their worries.
``For sure, I’m very concerned about the price,″ said Abdulla Al-Attiyah, Qatar’s oil minister.
Kuwaiti oil minister Abdul Mohsen Medej al-Medej told reporters today that OPEC was ``in good shape to do something″ for prices, but he declined to elaborate.
The Organization of Petroleum Exporting Countries has been unable to find ways to get non-OPEC producers to cut back. OPEC members fear they could be left out as more non-OPEC oil comes onto the market to meet demand that is rising _ though not enough to make room for more OPEC oil.
In his opening address to the ministers, Arrieta, who is also Venezuela’s oil minister, said that OPEC’s efforts ``to stabilize the oil market through self-imposed restrictions on output have been unduly abused.″
OPEC’s limits on production are allowing other producers to increase market share at OPEC’s expense, Arrieta said.
``This, in spite of the fact that OPEC’s proven oil reserves are three times the size of those of non-OPEC, vastly more accessible and less expensive to exploit,″ Arrieta said. ``There is a serious anomaly here.″
But with OPEC unable to persuade non-OPEC producers to cut back, there has also been a focus on what the cartel might do about members who overproduce, a constant problem.
For now, most accusing fingers are pointing at Venezuela, believed to be producing around 2.7 million barrels a day. Venezuela’s OPEC quota is about 2.36 million barrels a day.
Experts believe OPEC is exceeding its official ceiling by about 900,000 barrels a day _ with Venezuela responsible for more than one-third of the overproduction.
Venezuela has repeatedly denied breaking the rules.
``Absolutely none of the ministers has accused Venezuela as a violator,″ Arrieta told reporters Monday night.
Analysts have long predicted that OPEC would roll over its production ceiling at the winter meeting, with the main question being whether the group would set the ceiling for six months or a full year.
Shortly into its meeting, OPEC announced that Algerian oil minister Ammar Makhloufi would be the group’s next president. He had been expected to follow Arrieta in the post.
Iraq, which has been shut out of the global petroleum market since it invaded fellow OPEC member Kuwait in 1990, planned a news conference by oil minister Amer Mohammed Rasheed on Thursday, according to a statement from the Iraqi embassy in Vienna.
Rasheed said his topics would include Iraq’s compliance with United Nations conditions that would let it back into the market.
Iraq’s eventual resumption of oil sales will pose a big problem for OPEC, because if other members don’t cut production to make room for the Iraqi oil, the Iraqis could flood the market and send prices plunging.
OPEC members are Algeria, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.