Monday, March 16, 2009

OPEC in Fully Compliance with Economic Crisis

OPEC lost the ability to surprise oil markets many years ago. That happened once more yesterday. OPEC agreed to keep oil production quotas unchanged, deciding against a further output cut that risked damaging the ailing global economy.

The Organization of Petroleum Exporting Countries, supplier of about 40 percent of the world’s crude oil, will aim to complete existing production cutbacks agreed late last year and meet again on May 28 to review policy. This decision of no new cut of production but instead fully compliance with current production quotas, was well expected from all the analysts and journalists which read the news and analysis, except of them who serve opportunistic and speculative interests. The signs that cartel members wouldn’t reduce their daily production in yesterday’s critical meeting in Vienna, were clear from the last days of the previous week, when the Saudis –and their close allies- said in clear words that they preferred the full compliance with current quotas and a future cut of production in the near future if that is necessary, that means if oil prices continue to fall. “We would like to see compliance as high as possible,” Ali al-Naimi, the oil minister for Saudi Arabia, the group’s biggest producer, told reporters when he arrived at his hotel in Vienna on Saturday. “It is over 80 percent now, it can be better.”
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