Venezuela Prefers Higher Oil Prices
Venezuelan Oil Minister Alvaro Silva said on February 6th that his country would like to see the price of OPEC’s basket of seven crudes in the range of $25 to $28 a barrel, because lower prices hurt OPEC producers.
Silva said that: “The official band is still between $22 and $28 but we have noticed that it can be between $25 and $28 without causing disturbances [to the world economy].
Below $25 it causes problems for the countries [of OPEC].” U.A.E. Oil Minister Obaid bin Saif al-Nasseri also said on February 6th that possible cuts or increases in the group’s production should not be discussed until the next OPEC meeting on March 16th.
He said that: “If there is an increase in supply and intervention is needed then the right decision would be taken.”
The remarks from Silva and al-Nasseri follow talks on February 5th between Saudi Oil Minister Ali Naimi, Norwegian Oil and Energy Minister Olav Akselsen and Mexican Energy Minister Ernesto Martens in Olso.
Naimi said following that meeting that: “The market is at a reasonable price level today and there is no need to take additional movements.”
Norway and Mexico had worked with OPEC to stabilize oil prices since 1998, when prices dipped below $10 a barrel, but decided not to cut production after the cartel moved in January to slash its output by 1.5 million b/d beginning February 1st. Martens said on February 5th that: “Right now we find an excellent balance between supply and demand.”
Mexico has said that it will fix output at 1.75 million b/d from February 1st, below the 1.825 million b/d level set in the 2001 Mexican budget, but up from the 1.69 million b/d of production averaged between July and November 2000.
Norway indicated that it would keep output steady at 3.2 million b/d because prices are still high enough. Akselsen said that: “I think it is very important for Norway to be in close contact with other big oil producing countries, both in or outside OPEC.
On the other hand, it is important to be friends with, and have close contacts with, the big importers and consuming countries.”
© 2001 Mena Report (www.menareport.com)