Daily Archives: March 14, 2009

Carola Hoyos

As ministers of the Opec oil cartel arrive in Vienna today, they are being greeted by dozens of wire service reporters lying in wait behind laptops propped on hotel lobby coffee tables. Analysts and oil company executives watch from the sidelines as the Dictaphone-wielding journalists dash to the entrance every time a minister steps out of his limo. The scene of Austria’s Cobra secret service personnel, Opec ministers and the herd of journalists precariously negotiating the hotel’s revolving entry doors may appear almost comical.

But there is good reason for this mayhem: Almost anything a minister says could be worth millions of dollars. Comments land on the computer screens of commodities traders from New York to Singapore within moments of being dispatched by reporters working for Dow Jones, Reuters or Bloomberg.  Seconds can mean the difference between a trader profiting handsomely from an information advantage and being part of the herd.

This time traders are even more desperate than usual for news of whether Opec will decide to cut its production further. This has been reflected in 5-10 per cent fluctuations in oil prices over the past few days as Opec ministers and ‘unnamed sources’ have been dropping their hints.

Here are the quotes wires are dispatching today:

Reuters quotes Ali Naimi, Saudi Arabia‘s powerful oil minister, saying: “Compliance is very good … We’d like to see compliance as high as possible, it is over 80 percent now, it can be better.”

He also appeared pleased about the falling amount of oil in storage, though he said the market was not yet balanced. “Inventories are coming down and will come down in due time,” he said.

Carola Hoyos

Saudi Arabia, Opec‘s most powerful member, appears to be going out of its way to say the cartel will refrain from making a new round of cuts at its meeting Sunday. “Most members agree that … compliance with current [output] reductions will have better … impact on price stability than new production cuts,” al-Riyadh newspaper quoted an Opec source as saying.

That should please the White House. Late Friday Steven Chu, US energy secretary, said: “We will continue to send a strong and clear message to Opec nations about the importance of protecting the world economy from significant price increases that aren’t good for any nation.”

The International Energy Agency, the developed countries’ watchdog of which the US is the biggest member, drove home that message in its most recent monthly market report by showing what would happen to oil inventories if Opec simply adhered to its existing cuts:

But will Opec simply pledge to boost its compliance from an already impressive (and unusual) 80 per cent?

Energy Source is no longer updated but it remains open as an archive.

Insight into the financial, economic and policy aspects of energy and the environment.

Read our farewell note

About the blog

Archive

« Feb Apr »March 2009
M T W T F S S
 1
2345678
9101112131415
16171819202122
23242526272829
3031