Khaleej Times reported that members of the Organization of Petroleum Exporting Countries are unlikely to enforce further oil production cuts before their next joint meeting in December, though they perceive that the market remains oversupplied.
Mr Jose Botelho de Vasconcelos president of OPEC said that “The situation is not stabilized. I think the market has, at this time, a lot of stocks and we need to wait until the meeting. The OPEC will meet in Luanda, Angola on December 22nd 2009 to decide on its oil production policy.
Conceding that the market is still a little bit oversupplied, he said that the current oil inventories give about 62 days of forward cover, whereas the ideal would be 52 days to 54 days of cover. He did not answer a question whether an emergency meeting of the OPEC would be convened to assess the market situation and devise appropriate changes in the production quota. However, he said that the rate of compliance by OPEC members with their production quotas is around 65% which he thinks is satisfactory.
The oil group had kept its official output targets unchanged at meetings this year after it agreed to curb output by 4.2 million barrels per day in 2008.
Mr Vasconcelos agreed that there was need for reflection on the current mode of pricing of oil in dollar and exploring alternatives. He said that “We don’t know it is an issue that we must do some reflection on.”
According to him, USD 75 per barrel to USD 80 per barrel is a satisfactory price for oil. USD 75 per barrel to USD 80 per barrel is a good price for the recovery of the world economy.
(Sourced from Khaleej Times)
