OPEC's president, Venezuela's Energy Minister and next OPEC's Secretary General Ali Rodriguez Araque said on Monday to reporters that there is a need for new crude oil benchmark to reflect the reality of the market and better statistics to control speculation.
Mexican Energy Minister Ernesto Martens confirmed Monday that Mexico will join in efforts with other producers to find new benchmarks to price crude oil. Martens told reporters at a press conference on Monday.
Rodriguez said, that the current benchmarks, WTI, Brent and Dubai, do not reflect the reality of the supply market, they amount to just a small fraction of the trio's total.
The creation of a new benchmark would help to control the speculators.
" OPEC, Russia and Mexico, all agree that a new benchmark is necessary" he said. OPEC will be forming u a group that will look for a benchmark that better reflects the reality of the market", "a better marker will moderate the high levels of speculation." He said, that oil futures market speculation adds $4 to $8 to the price of a barrel of oil.
"The proposal is to look for a formula that gives more balance, compared with what exists today which is a band.
And there, obviously Mexico is willing to support that effort and use 'think tanks' to help us find a better formula if one can be found," Martens said at a press conference, wrote Dow Jones News Wire, late Monday.
He also added, that the weekly statistics on inventory levels are deceiving, every week the change of inventories reported does not mach the previous week numbers. "We can not believe official statistics," on inventory levels, he said.
Also, Rodriguez said once again, that there are other factors that influence prices, including refining constrains, high taxes, and transportation costs.
Rodriguez warned OPEC stands ready to cut production if the recent downward trend in prices continues.
The conclusions of the recent meeting between consuming nations and OPEC in Riyadh, show us that- consumers and producers we all want to achieve market stabilization.
Rodriguez said " agreement now exists between producing and consuming nations on the need for price stability within the band limits."
Rodriguez reiterated that world crude oil oversupply is currently at 1.4 million barrels per day and OPEC will probably cut production when it meets in January if prices continue falling.
However, Rodriguez said that if prices manage to maintain the current band levels, an output cut may not be necessary in Jan.
By Elio Ohep
© 2000 Mena Report (www.menareport.com)
