OPEC ready to cut supplies in 2013 to support oil prices

Updated 20 December 2012

OPEC ready to cut supplies in 2013 to support oil prices

VIENNA: OPEC does not see increased US oil output as a threat to its interests but is skeptical about current forecasts on the boom of American shale gas production, a senior official of the 12-nation group said.

OPEC Secretary-General Abdullah Al-Badry also said figures supplied by Iran show it producing around 3.7 million barrels a day. That is the same amount as Tehran pumped before international embargos on its crude that took effect this year and had been estimated to have cost it hundreds of thousands of barrels a day in sales.

Al-Badry spoke to reporters a day after OPEC ministers agreed to keep their daily crude production target unchanged at 30 million barrels. 

They also extended his term for a year after failing to agree on a successor for the post because of rivalries among member states.
OPEC, which accounts for about a third of the world’s oil production, is projecting a slight fall in demand for its crude next year, and world inventories are well stocked, in part because of resurgent production by the United State, which is tapping into oil extraction from shale.
The Paris-based International Energy Agency is predicting that America will be a net exporter of oil by the next decade and could overtake Saudi Arabia as the world’s top crude producer by 2020. Analysts have suggested a looming dent in OPEC influence as a result.
But Al-Badry said his organization “is not really concerned” about any increase in world supply due to US shale extraction.
He questioned industry estimates that US shale extraction could amount to an extra 3 million barrels of oil a day within 20 years as well as forecasts of US energy independence. At the same time, he said any extra supply was welcome.
“It’s fine with us, it’s another source of energy and the world really needs this oil, I don’t see it as a threat to OPEC” he said.
His comments on Iranian production indicated that figures from other organizations may be off or that Tehran’s statistics might be inaccurate.
Oil exports from Iran have dropped this year as a result of international sanctions imposed due to concerns that Tehran may be seeking nuclear arms — something Iran denies. The International Energy Agency, which offers energy expertise to industrialized country, said last month that Iranian oil output was at a daily 2.7 million barrels in October.
But Al-Badry said Iran has told OPEC that it is producing 1 million barrels a day more than that, which would equal output before the embargoes took hold.
Ahead of Wednesday’s OPEC oil ministers’ meeting, Iranian Oil Minister Rostam Ghasemi played down the effects the sanctions were having on his country, claiming the Iranian state had cut its financial dependence on oil income by 20 percent in the last three years.
“Next year we will do the same,” he said.

What We Are Reading Today: Varoufakis on how Marx predicted our present crisis

Updated 22 min 55 sec ago

What We Are Reading Today: Varoufakis on how Marx predicted our present crisis

‘Marx predicted our present crisis and points the way out,’  writes Yanis Varoufakis in The Guardian’s Long Read Series.

Most people think communism has been consigned to the dustbin of history, but Yanis Varoufakis, former Greek finance minister, goes back to the source and examines “The Communist Manifesto,” written by Karl Marx and Friedrich Engels, and published in 1848.

Varoufakis said the book remains unsurpassed as a work of literature that foresaw the predatory global capitalism of the 21st century.

“Today, a similar dilemma faces young people: conform to an established order that is crumbling and incapable of reproducing itself, or oppose it, at considerable personal cost, in search of new ways of working, playing and living together?” Varoufakis wrote. “Even though communist parties have disappeared almost entirely from the political scene, the spirit of communism driving the manifesto is proving hard to silence.”

Marx and Engels forecast that a powerful minority would prove “unfit to rule” over polarized societies.

“The manifesto gives its 21st-century reader an opportunity to see through this mess and to recognize what needs to be done so that the majority can escape from discontent into new social arrangements,” Varoufakis said.