Monday, January 31, 2011
OPEC worried about Egypt, but not acting yet
OPEC is concerned by unrest in Egypt but sees no need for an immediate boost in its output as there is no shortage of oil, the group's top producer Saudi Arabia and its leading official said.
Oil prices have spiked due to tensions in Egypt. Brent crude is near $100 per barrel on fears instability could spread through the Middle East, which together with North Africa extracts over a third of the world's oil.
The unrest spurred the oil price rally, which was already gathering pace after a bigger than expected jump in demand due to the global economic recovery. Today, Brent traded at $99 per barrel and U.S. crude hovered near $90.
OPEC Secretary-General Abdullah al-Badri told reporters in London the Organization of the Petroleum Exporting Countries did not think it was necessary to call a meeting before its next planned gathering in June, But he added that the mood was changing due to the situation in Egypt.
"Before the Tunisian and the Egyptian crisis, we don't see it (an extraordinary meeting). But now, I don't know if this crisis will escalate. I hope not," Badri said when asked about chances for an OPEC meeting before June.
Badri confirmed OPEC ministers and consumers would discuss oil output policy on the sidelines of an international energy conference in Saudi Arabia on Feb. 22, but said a formal decision there was unlikely.
"Riyadh is not an OPEC meeting. Nobody asked me to prepare anything, so I really cannot tell you anything," he said.
"We don't want 2008 to be repeated," Badri said referring to July 2008 when oil rose to $147 a barrel. "OPEC is always ready to meet when we see the market is out of balance," he said adding he had not yet discussed unrest in Egypt within OPEC.
Oil prices have spiked due to tensions in Egypt. Brent crude is near $100 per barrel on fears instability could spread through the Middle East, which together with North Africa extracts over a third of the world's oil.
The unrest spurred the oil price rally, which was already gathering pace after a bigger than expected jump in demand due to the global economic recovery. Today, Brent traded at $99 per barrel and U.S. crude hovered near $90.
OPEC Secretary-General Abdullah al-Badri told reporters in London the Organization of the Petroleum Exporting Countries did not think it was necessary to call a meeting before its next planned gathering in June, But he added that the mood was changing due to the situation in Egypt.
"Before the Tunisian and the Egyptian crisis, we don't see it (an extraordinary meeting). But now, I don't know if this crisis will escalate. I hope not," Badri said when asked about chances for an OPEC meeting before June.
Badri confirmed OPEC ministers and consumers would discuss oil output policy on the sidelines of an international energy conference in Saudi Arabia on Feb. 22, but said a formal decision there was unlikely.
"Riyadh is not an OPEC meeting. Nobody asked me to prepare anything, so I really cannot tell you anything," he said.
"We don't want 2008 to be repeated," Badri said referring to July 2008 when oil rose to $147 a barrel. "OPEC is always ready to meet when we see the market is out of balance," he said adding he had not yet discussed unrest in Egypt within OPEC.
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