JAKARTA, 26 November 2004 — OPEC President Purnomo Yusgiantoro said yesterday he is confident that global oil prices will fall in the second quarter of 2005 due to a decline in world demand.
“I am convinced that in the second quarter of 2005, demand for oil will go down and this will surely have an impact on the development of oil prices. Therefore, I am confident oil prices will go down in the second quarter of 2005,” Yusgiantoro told reporters here.
Oil prices have fallen by about 16 percent in New York from all-time highs seen last month but remain up 44 percent so far this year.
Analysts said prices are also drawing support from expectations that the OPEC will soon reduce output after increasing production to close to full capacity in recent months in response to record-high prices. Organization of Petroleum Exporting Countries ministers are due to meet next in Cairo on Dec. 10.
However, Venezuelan President Hugo Chavez said yesterday that world oil prices should not be allowed to fall sharply, Interfax reported. “We must never allow it that oil price falls sharply,” the news agency quoted him as saying on the first of a two-day visit to Russia.
Chavez said that minimum oil price should be $30 per barrel and the maximum should be “today’s market price”. Venezuela, the eighth-largest oil producer in the world, is one of the five founding members of the OPEC. Russia is the second-biggest oil producer after Saudi Arabia but does not belong to OPEC.
Meanwhile, oil prices rose in London yesterday, supported by worries about a possible supply shortage of US heating oil stocks during the northern hemisphere winter. In London, Brent North Sea crude oil for January delivery was 24 cents higher at $45.06 a barrel at about 1700 GMT. Trading in New York’s main oil contract, light sweet crude for January delivery, was suspended because of the Thanksgiving holiday in the United States. New York oil closed up 50 cents at $49.44 a barrel on Wednesday from Tuesday.