Updated: Opec oil ministers have agreed to maintain the status quo and keep the group’s production quota unchanged. The decision was widely expected, but moved oil prices slightly higher.
The agreement has now been confirmed by Opec’s secretary-general Abdalla Salem El-Badri and Ali Naimi, Saudi Arabia’s energy minister and the group’s de-facto leader.
Oil prices moved slightly higher on the news. April West Texas Intermediate crude, the US benchmark futures contract, was up 61c at $82.31 a barrel, approaching a level it has not seen – other than once this January – since October 2008. The European benchmark Brent price was up 68c to $81.21.
Opec agreed to next meet in in Vienna in October, a month later than had been expected, because several ministers have other prior commitments in September.
As a rush of journalists entered the domed meeting room in Opec’s new headquarters building this morning, ministers from Libya to Saudi Arabia said they saw no reason to change tac. The oil price – at around $80 a barrel – is where they want it to be and the economy is showing good signs of recovery, they reasoned.
The most definitive quote came from Ali Naimi, Saudi Arabia’s powerful oil minister, who told a gaggle of journalists, including AFP, which had the quote up on line within seconds:
“There is no question: there is agreement, yes,” he said. When asked what Opec would decide at its meeting, he said: “To keep things as they are. We are very happy with the situation as it is.”
So unless ministers have been telling bald-faced lies, this meeting is over even before it has officially begun.
The most poetic quote of the opening ceremonies came from the official declaration, read by Germanico Alfredo Pinto Troya of Ecuador, who is currently Opec’s president. He described the economic recovery as “balanced on a knife’s edge of uncertainty.” In their comments over the past few days the ministers seemed far less concerned. No matter: a note of caution, a well-placed hedge and a bit of poetry all rolled into one is a rare gem in the usual tedium of Opec soliloquies.
More interesting than today’s Opec meeting, is the developing idea of a gas Opec, for which Chakib Khelil, Algeria’s energy minister, called on Tuesday.
The key to making the plan work is getting Qatar on board. Sitting diagonally opposite Khelil, Qatar’s jovial energy minister – Abdullah bin Hamad Al Attiyah – smiled, but would only say “no comment”. It was a brief statement, from one of the most chatty ministers of the group.
Russia, Europe’s biggest gas supplier and an observer of Opec, was not in Vienna this time. Khelil said he had not yet talked privately to either country’s minister about his plan.
If he doesn’t catch Al Attiyah today, the next chance comes as early as the end of this month when ministers meet again at the International Energy Forum – a summit of producing and consuming countries – in Cancun, Mexico, and then of course at the meeting of the gas exportting countries forum in Oran, Algeria on April 19.
Perhaps knowing that it took Opec 13 years – from its creation in 1960 until late 1973 – to make a big, effective common decision, Abdalla Salem El-Badri, Opec’s secretary-general, laughed and said “Good luck for them,” when asked whether he thought Khelil’s idea would take off.