CAIRO, 14 December 2003 — Non-OPEC oil exporting countries will be asked to participate in a potential reduction of the global oil supply that OPEC could decide for the second quarter of 2004, ministers from the oil organization said here yesterday.
They were speaking against a background of surging oil prices in the face of higher demand and ahead of a meeting of the Organization of Petroleum Exporting Countries slated for Feb. 10 in Algiers.
OPEC President and Qatari Energy Minister Abdullah ibn Hamad Al-Attiyah told reporters, “We will invite Russia, Mexico and other non-OPEC countries to the meeting in Algiers to discuss the market situation.”
He was answering a question on whether the 11-member organization was concerned about the increase in production next year coming from non-OPEC countries.
Algerian Energy Minister Chakib Khelil said: “Of course, any decision in OPEC, whether it is for cutting or raising (production), we always ask for cooperation with non-OPEC countries”.
Khelil said that there was currently “good supply in the market and balance between supply and demand” but expected oversupply in the second quarter to reach 2.5 million barrels per day.
But he declined to specify by how much OPEC was considering to reduce its output in the second quarter, saying that the volume to be potentially reduced depended on the weather in the United States, the US and European economy and on demand in the second quarter.
Both ministers were speaking before the opening of a meeting of the Organization of Arab Petroleum Exporting Countries (OAPEC) in Cairo that gathers several members of OPEC.
The Arab ministers signaled at the Cairo meeting that they were prepared to tolerate current high prices because of the decline in the value of the US dollar against the euro.
They also blamed the strong prices on “speculators and geopolitical factors” related to the Middle East and Iraq.
“It is on the high side but not too high, bearing in mind the decline in the US dollar”, said the oil minister of the United Arab Emirates, Obaid ibn Seif Al-Nassiri.
“Our revenue (purchasing power) has lost 20 to 25 percent since the beginning of this year. What we gained in terms of oil prices, we lost in terms of currencies”, he added.
Saudi Minister of Petrolum and Mineral Resources Ali Al-Naimi said: “We have nothing to do with what the price is today, the (high) price has nothing to do with supply shortages, there are absolutely no shortages in the market”. He indicated that the jump seen in prices recently was caused by the weather and the gasoline stocks situation. “We want a stable oil price”, he said.
Khelil acknowledged that prices “are definitely too high (..) but I think the prices are mainly due to geopolitical problems in the Middle East and the role of speculators”.
Khelil and Attiya repeated that OPEC’s target remains to keep prices within a band of $22-$28 per barrel of its reference basket of crude.
“We will do anything to maintain it but we can only act on factors that are in our control, not geopolitical and speculators”, said Khelil.
World oil prices surged Friday as traders braced for higher demand in the northern hemisphere winter and against the background of strong Chinese demand.
New York’s benchmark light sweet crude contract for delivery in January raced $1.19 higher to $33.04 a barrel, the highest finish since Nov. 18. Brent North Sea crude oil for January delivery gained 80 cents to $30.37.
