MercoPress. South Atlantic News Agency

OPEC leaves output unchanged: market remains well supplied

The Organization of Petroleum Exporting Countries, OPEC, left its oil production ceiling unchanged on Friday ignoring United States demands for an increase. The cartel insisted that the market remained well supplied and seemed to focus on supporting prices which have fallen 10% since the beginning of the year.

In its official statement at the end of the meeting in OPEC headquarters in Vienna the organization said that after reviewing developments since December and short term prospects "OPEC production decisions had ensured that the market remained well supplied throughout 2007. It also noted that the first half of 2008 was likely to witness a crude inventory build, and supply/demand forecasts indicate that commercial oil stocks are in line with the seasonal trend and are expected to remain within their five-year average during the traditionally lower-demand season in 2008". Thus in view of the current situation coupled with the projected economic slow down, "the Conference agreed that current OPEC production is sufficient to meet expected demand for the first quarter of the year". However, "the conference noted that the significant uncertainties associated with the projected downturn in the global economy called for vigilant attention to their impact on key market fundamental until its next meeting on 5 March 2008". OPEC remains determined to take every measure deemed necessary "to keep the oil market stable" Algerian oil minister and OPEC conference president Chekib Khelil explained the extent of the decision during a press conference. "I don't think the world should be concerned about a lack of oil; it should be more concerned about the financial crisis we are witnessing and its impact on world growth". The 13-member OPEC pumps 40% of world oil production which amounts to 29.67 million bpd. Since striking 100 dollars plus per barrel at the start of the year, the price of oil has slipped on fears of a US recession and a global economic slowdown but it is still almost double the level of a year ago. Oil hit a record high of 100.09 dollars on January 3. "We are more concerned about the economy and the crisis in the US" said Khelil who admitted that the "the ramifications and impact (of a US recession) on the world economy in the medium term and longer term, probably will have some impact on (crude) demand". Kuwait's acting oil minister, Mohammed Al-Aleem told reporters that OPEC was concerned about the impact of an economic slowdown on oil prices. "The price, so far, has been sliding a bit; within three weeks it has lost about 10 dollars. We have to see why, what the problem is and whether it's going to continue at the same pace" he said. OPEC's Friday oil ministers gathering in Vienna was an extraordinary meeting that had been scheduled at the group's last official meeting on December 5 in Abu Dhabi.