OPEC: Risk Remains, Oil Production Unchanged and a Word About Climate Change
The Organization of Petroleum Exporting Countries will keep its oil production levels unchanged -- as expected -- in large part to avoid destabilizing a fragile economic recovery.
OPEC ministers from its 11 member countries gathered Sept. 9 and 10 for its 154th ordinary meeting in Vienna, Austria. OPEC determined it will maintain output of 24.845 million barrels a day, a level it set last December. But the oil cartel warned it could rapidly respond "to any developments which might jeopardize oil market stability" and member countries' interests. The group will meet in an extraordinary session Dec. 22 in Luanda, Angola.
OPEC will instead turn to compliance, which some of its member countries have failed to meet.
"Compliance has not been excellent," OPEC's secretary-general Abdalla Salem El-Badri said during a press conference following the meeting. "But it's good considering the circumstances surrounding us."
El-Badri's tone during the press conference was one of cautious optimism.
"We are walking on a very thin line," El-Badri said. "We don't want to take action that will jeopardize the recovery that you are seeing at this time."
In statements to the press, El-Badri clearly seemed pleased with current crude prices, which have risen about 60 percent this year. Light, sweet crude oil for October delivery settled at $71.31 a barrel on the New York Mercantile Exchange.
Crude prices $75 and higher have been pinpointed by OPEC as ideal. Anything below $75 a barrel would not encourage our member countries to invest," El-Badri said.
"We need to have more capacity, we need to add more oil to the market and we can not do this without an adequate and reasonable price for our member countries," he said.
The environment, and more specifically, the upcoming climate change talks in Copenhagen, produced some predictable comments from OPEC. The world's leaders will meet this December in an effort to craft and agree to a new accord to combat climate change before the Kyoto Protocol expires in 2012.
OPEC president Jose Maria Botelho de Vasconcelos, Angola's oil minister, urged in his opening remarks that oil producers must make sure their interests are properly represented as the post-Kyoto agreement is drawn up.
El-Badri later expanded on those comments to say the environment is a concern, but is not the sole responsibility of developing countries.
"The environment is important, we are concerned about the environment, we live in the same world," El-Badri said. "We don't want to be paralyzed. They can not shift the responsibility of cleaning the world or cleaning the environment on the developing countries as a whole."