AFP: Saudi Oil Minister Ali al-Nuaimi said Tuesday there is no need for an emergency OPEC meeting to discuss a possible output cut since the situation in the crude oil market is “healthy”. by Pratap Chakravarty
NEW DELHI, Jan 16, 2007 (AFP) – Saudi Oil Minister Ali al-Nuaimi said Tuesday there is no need for an emergency OPEC meeting to discuss a possible output cut since the situation in the crude oil market is “healthy”.
“Actually there is no reason for a meeting as all the fundamentals are significantly healthier than they were at the time of the Doha meeting (in October),” Nuaimi said.
The Saudi minister was speaking in New Delhi at a gathering of oil ministers from several members of the Organisation of Petroleum Exporting Countries (OPEC), including Iran.
The minister said production cuts already agreed by OPEC were working well and there was no need to panic over oil prices that have fallen 14 percent since the beginning of 2007.
“The market doesn’t need to panic at all and there is a need to protect interests of both producers and consumers. The market is in a healthy condition and moving in the right direction,” he said.
“We took measures in Doha and measures in Abuja and I believe these measures are working well,” he said.
“Inventories in the fourth quarter have come down, which puts the market closer to balance,” the minister added.
This year’s slump in oil prices has led to calls from Venezuela and Algeria to deepen two production cuts agreed at meetings in Doha in October and Abuja in December, before the next scheduled meeting on March 15.
Nigerian energy minister Edmund Daukoru, also attending the meeting here, said the oil market was oversupplied.
“The winter has been very mild. There is substantial oversupply in the market,” said Daukoru, whose term as OPEC president ended on January 1.
The Nigerian minister was replaced as OPEC head by UAE oil minister Mohammed Al-Hamili.
“There is new non-OPEC production expected to come on stream very soon. I suspect that is the reason why the market is so soft,” Daukoru said.
OPEC has an output cut of 500,000 barrels per day (BPD) set to start February 1 after a reduction of 1.2 million BPD in November as it tries to hold the line on prices, which have fallen from peak highs of 78 dollars in July to around 53 dollars.
Daukoru, whose country is the sixth-largest producer in OPEC, said the oil cartel was waiting to see how the February cut affected prices.
“We will simply wait it out. The sky is not falling because prices are at 52 dollars a barrel,” he told reporters.
Last week, prices fell to levels last seen in June 2005 due to unusually warm winter both in the United States and Europe, which have stalled demand for heating oil.
Daukoru also spoke about “energy poverty” in Africa and other parts of the developing world, saying there was an urgent need to invest in production and distribution networks there.
“See a satellite view of the world at night and the stark contrast of the blackness of Africa surrounded by the radiance of every other country,” he said.
“These nations are being left behind. We are losing our forests,” he said.
The Nigerian minister said the OPEC Fund for International Development, the World Bank, the Asian Development Bank, the United Nations and aid agencies must work together to improve access to energy sources in Africa.
“We must declare a world energy decade comparable to the millennium development goals,” said the minister, who later met with India’s petroleum minister Murli Deora.