GENEVA, 21 November 2003 — The head of the Organization of Petroleum Exporting Countries insisted yesterday that oil markets were well supplied despite the current price surge, as he gave backing to a new UN body aimed at harnessing the security of global energy supplies. “The level of prices is not due to scarcity of oil, the market is well supplied,” OPEC Secretary General Alvaro Silva Calderon said, blaming non-economic factors such as global insecurity and conflicts.
Silva Calderon hinted that the OPEC target price band of $22 to $28 a barrel was damping down oil prices, even though they have surged above $30 a barrel in recent weeks.
The band “is working well in order to stabilize the market. We don’t think to change those limits,” he told journalists. Silva Calderon was taking part in a meeting of a new United Nations Energy Security Forum, alongside government officials, mainly Russian oil producers, as well as major international banks and energy analysts. Participants - dominated by the Russian oil and gas industry -estimated that the energy sector would need $2 trillion to $3 trillion in new investment over the next ten years.
“It’s truly a daunting, ambitious level that prompts us to explore where it will come from and what the impact will be on other sectors if it is done, as well as if it is not,” said former US National Security Adviser Robert MacFarlane, who currently heads an energy consultancy.
Meanwhile, oil prices weakened yesterday. The price of benchmark Brent North Sea crude oil for January delivery fell five cents per barrel to $29.73. New York’s reference light sweet crude December contract was 27 cents lower at $32.65.