An announcement is expected on OPEC quota much earlier than expected at 14:00CET instead of 16:00CET. Instead of the rows we saw last time, things on this instance were so amicable that they've wrapped up early. Saudi minister Ali Al-Naimi has left the building having patched-up with his Iranian counterpart, a trusty Venezuelan has just confirmed that a 30 million bpd OPEC quota agreement is a done deal and the Oilholic has just done a comment piece on an OPEC TV webcast.
Rostam Ghasemi, Minister of Petroleum of Iran and current President of the OPEC Conference noted that the last meeting on June 8th, the international oil market has witnessed further volatility. The OPEC Reference Basket price has risen to US$113 a barrel on several occasions, and it fell below US$99 a barrel briefly at the start of October as well.
“Uncertainty about economic growth translates into uncertainty about oil demand. In the aforesaid five-month period, we have reduced our forecast for world oil demand growth in 2012 by around 600,000 barrels a day. This leaves us with a demand growth estimate for 2012 of 1.1 million barrels per day over 2011,” Ghasemi said.
“Therefore, when reviewing the market outlook for 2012 and beyond, we face a very unclear picture. On the one hand, we are committed to ensuring that the world oil market is always well-supplied. Yet, on the other hand, we are faced with the prospect of a world economy which could swing either way in the coming months. It could enter a welcome period of sustainable economic recovery or return to a new downturn or even recession,” he added.
A relatively small impulse in an economy, or a group of economies, could be a deciding factor in this unstable global environment. The situation is not helped by the still considerable influence of the international financial sector in over-stating market trends in one direction or another, out of line with fundamental factors,” Ghasemi continued.
All this, according to Ghasemi presents a huge challenge to OPEC's Member Countries, when it comes to investing in future production capacity in an industry with high capital-outlays and long lead-times. More shortly, after the official confirmation of the OPEC quota!
© Gaurav Sharma 2011. Photo: OPEC HQ, Vienna, Austria © Gaurav Sharma 2011.