OPEC freezes oil output, sees prices easing<\/p>\n
VIENNA (Reuters): OPEC on Monday ratified an agreement on
\nunchanged export quotas that at first sight appears to do little
\nto soothe consumer concerns over high fuel bills this winter.<\/p>\n
Organization of the Petroleum Exporting Countries ministers
\ndecided not to top up production quotas that already have been
\nraised four times this year.<\/p>\n
The producer group has reached the end of a cycle that
\nreinstates most of the supply curbs it put in place when oil
\nprices crashed below US$10 a barrel in 1998.<\/p>\n
Ministers are predicting that crude, still well above $30,
\nsoon will fall into their target range of $22-$28 as the full
\nimpact of this year's 3.7 million barrels daily of supply
\nincreases is felt.<\/p>\n
\"We can only conclude that OPEC has more than fulfilled its
\nrole as a reliable oil supplier and that the true reasons for
\ncurrently high prices lie behind a series of other factors,\" said
\nOPEC President Ali Rodriguez of Venezuela.<\/p>\n
Rodriguez took aim in particular at shrinking refining
\ncapacity in the United States, the world's biggest importer.<\/p>\n
Oil dealers reacted cautiously to the OPEC decision. London
\nBrent futures rose just three cents to $32.05 a barrel with U.S.
\nlight crude unchanged at $34.02.<\/p>\n
The group meets again on Jan. 17 by which time oil market
\nanalysts expect a year-on-year deficit in inventories to have
\nturned into a surplus.<\/p>\n
\"At current production levels they are already oversupplying
\nthe market for 2001 requirements,\" said Gary Ross of U.S.
\nconsultancy Petroleum Industry Research Associates.<\/p>\n
\"If they want to sustain oil prices they may have to take
\naction on cutting supply in the first quarter.\"<\/p>\n
OPEC effectively suspended the automatic price stability
\nmechanism that earlier this month provided its latest increment
\nof 500,000 bpd.<\/p>\n
The mechanism might well have triggered more crude at the end
\nof this month because prices remain in advance of the group's
\ntarget range.<\/p>\n
Rodriguez, who as OPEC president would order extra output
\nunder the mechanism, told reporters that no more crude was coming
\nthis year.<\/p>\n
Saudi Oil Minister Ali al-Naimi left the door ajar for the
\nslim possibility of extra deliveries should prices go into orbit.
\nHe said Riyadh, in control of most of OPEC's spare capacity,
\ncould act alone on supply if necessary but that more time was
\nneeded to assess the impact of earlier increases.<\/p>\n
Many OPEC states remain more worried about a post-winter price
\nslide than the impact of high energy costs on inflation.<\/p>\n
\"OPEC wants to avoid an uncontrollable collapse in prices and
\nthat's why it will continue to micromanage the market by meeting
\nagain in January,\" said Raad Alkadiri of Washington consultancy
\nPetroleum Finance Corp.<\/p>\n
But Saudi Arabia is unlikely to let price hawks in OPEC
\nwithout spare capacity allow the cartel to get ahead of itself by
\nslicing supplies prematurely.<\/p>\n
Venezuela's Rodriguez emerged as a last-minute compromise to
\nreplace Rilwanu Lukman as cartel secretary-general after the
\nfailure to select from candidates put forward by Iraq, Iran,
\nSaudi and Libya.<\/p>\n
Venezuelan President Hugo Chavez will name a new Venezuelan
\noil minister in due course.<\/p>\n
Algeria's Khelil takes over as OPEC president from January 1
\nand Lukman becomes alternate president.<\/p>",
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