It looks like Opec will keep production levels unchanged, as predicted by the FT a month ago.
Wilson Pastor-Morris, the Ecuadorian natural resources minister and current president of the oil cartel, has said the present quotas had “served [their] purpose well” and “reduced volatility at a critical time for the world economy”. A pretty big hint that levels will not change, despite the desire of some Opec members to see oil at up to $100 a barrel.
David Blair has the full story from Vienna.
Opec said earlier this month that it was “comfortable” with crude oil prices at between $70 and $80 per barrel.
Well, if the latest analysis from the Centre for Global Energy Studies is to be believed, its members will remain “comfortable” for a while longer.
The centre’s “reference case” - its most likely scenario - predicts that macroeconomic declines will cut oil demand but supplies will also fall with fewer new projects coming onstream. Overall, the study says:
The rates of growth of both oil demand and oil supply decline in 2H10, but the slowdown on the demand side is more pronounced.
Fifty years after its creation, Opec’s carefully-worded announcements are now pored over like statements from the Kremlin at the height of the Soviet era. Nuanced phrasing and tone are studied for a sense of what member countries might do in terms of production.
So when Abdalla El-Badri, the secretary general said today, “Prices are moving $70-$80 a barrel. [This] is comfortable at this time,” the world took notice.
And among certain circles, it is not just opacity that makes Opec like the Kremlin, it is the menace it holds too. Here’s an excerpt from Foreign Policy magazine, for example, in an article entitled How to Ruin Opec’s 50th Birthday: