Oil price danger looms over OPEC meeting
Tuesday, 11 September 2007
VIENNA, Sept 10 (AFP): OPEC oil ministers arrive in Vienna today, under pressure to help combat high crude prices, which have surged to near-record highs and loom as a new risk for the global economy.
The outcome is uncertain of a formal meeting Tuesday, when the group will decide whether to raise output, amid speculation that Saudi Arabia is preparing to persuade its reluctant partners of the need for an increase.
High oil prices, which are within striking distance of 80 dollars a barrel, have become an added burden for the world economy in addition to financial market turbulence from a crisis in the US "subprime" housing market.
OPEC producers find themselves under pressure from consumer countries to bring down prices, but they are aware that the outlook for oil demand is clouded given the question marks over global economic growth.
Qatari Oil Minister Abdullah bin Hamad al-Attiyah summed up the dilemma for the 12-member group as he arrived Sunday, saying that an increase in supply risked coinciding with a fall in demand because of weakness in the United States.
"What if I increase oil (production), and nobody will buy it?" said al- Attiyah, who is in favour of keeping output unchanged.
OPEC produces about a third of world crude supplies.
His remarks reflect anxiety in OPEC that the oil exporters' group could bow to pressure to increase production, only to find demand falling as a result of slowing economic growth, particularly in the United States.
In 1997, OPEC increased output as the Asian financial crisis was developing and crude prices crashed to 10 dollars in 1999 because of falling demand and fears of a global recession.
Last week, oil prices in New York tested their record level of 78.77 dollars per barrel, reached on August 1, before closing at 76.70 dollars Friday.
Qatar, Iran, Kuwait, United Arab Emirates and Libya have all spoken in favour of keeping output unchanged, but kingpin Saudi Arabia was said Sunday to be in favour of an increase.
The outcome is uncertain of a formal meeting Tuesday, when the group will decide whether to raise output, amid speculation that Saudi Arabia is preparing to persuade its reluctant partners of the need for an increase.
High oil prices, which are within striking distance of 80 dollars a barrel, have become an added burden for the world economy in addition to financial market turbulence from a crisis in the US "subprime" housing market.
OPEC producers find themselves under pressure from consumer countries to bring down prices, but they are aware that the outlook for oil demand is clouded given the question marks over global economic growth.
Qatari Oil Minister Abdullah bin Hamad al-Attiyah summed up the dilemma for the 12-member group as he arrived Sunday, saying that an increase in supply risked coinciding with a fall in demand because of weakness in the United States.
"What if I increase oil (production), and nobody will buy it?" said al- Attiyah, who is in favour of keeping output unchanged.
OPEC produces about a third of world crude supplies.
His remarks reflect anxiety in OPEC that the oil exporters' group could bow to pressure to increase production, only to find demand falling as a result of slowing economic growth, particularly in the United States.
In 1997, OPEC increased output as the Asian financial crisis was developing and crude prices crashed to 10 dollars in 1999 because of falling demand and fears of a global recession.
Last week, oil prices in New York tested their record level of 78.77 dollars per barrel, reached on August 1, before closing at 76.70 dollars Friday.
Qatar, Iran, Kuwait, United Arab Emirates and Libya have all spoken in favour of keeping output unchanged, but kingpin Saudi Arabia was said Sunday to be in favour of an increase.