Norway, Mexico Won’t Slash Production
Norwegian Oil and Energy Minister Olav Akselsen and Mexican Energy and Mines Minister Ernesto Martens agreed on March 1st that current market conditions do not warrant production cuts.
Akselsen was in Mexico discuss world old prices and supply ahead of an upcoming OPEC meeting on March 16th. The Norwegian minister said that market fundamentals indicate that there is a “quite good balance” between supply and demand. He said that: “I don’t see that there is any need for a change now.”
Martens also reiterated his position that current conditions do not warrant an adjustment in supply levels.
Venezuelan Energy and Mines Minister Alvaro Silva indicated on March 1st that he would meet with Akselsen in Caracas on March 5th to discuss possible production cuts.
Silva also said that he could attend talks with Saudi Oil Minister Ali Naimi and Martens in Riyadh between March 10th and 12th, although Martens said he had no knowledge of the meetings.
Mexico and Norway had cooperated with OPEC in the past to bolster falling oil prices in 1998 and 1989 and to reign in soaring prices in 2000, but both now appear to be taking independent stands.
Akselsen said that while Norway will keep in close contact with OPEC, “we must make our own decisions based on the knowledge we have at the time.”
Even OPEC, though, seems hesitant to cut production at a time when demand levels historically decline, fearing an economic slowdown in the U.S.
Contradictory statements from OPEC ministers have left oil markets uncertain as to what the group’s next move will be, with the OPEC basket price falling further to $23.64 on March 1st.
© 2001 Mena Report (www.menareport.com)