Archive for the ‘OPEC’ Category

Obama’s Many “Number One” Priorities

December 3, 2008

Remember this simple catchphrase for priorities: “It’s the economy, stupid”?

Many think that should be the watchword for the new President Barack Obama.  But a confusing and dangerous miasma of foreign policy challenges lurks and lurches ahead. Without carefully applied wisdom, the United States could make matters worse on a wide range of international fronts and issues…

President-elect Barack Obama waits to get on his plane with ... 
President-elect Obama with his two Blackberris and some light reading.
(Jeff Haynes/Reuters)

Yesterday, two think tanks said the U.S. should move away from Iraq and work like the devil on the nuclear covetous Mr. Ahmadinejad and Iran.

The Brookings Institution and the Council on Foreign Relations said it is time to make peace in the Middle east as a “top priority.”  For the past six years under President George W. Bush, U.S. foreign policy in the region has been dominated by Iraq, said Martin Indyk, director of the Saban Center at Brookings, and Richard Haass, president of the Council.

Now the two agree the real problem is Iran.

Iran's President Mahmoud Ahmadinejad arrives at the U.N. ... 
Nuclear aspirant: Mr. Ahmadinejad of Iran

One difficulty with this line of thinking is that, depending on the day, the think tank report one considers, and the newspaper headline, America faces stadium full of “top priorities.”

In Russia, Medvedev and Putin believe they should be tops on the Obama agenda.  Mr. Medvedev even threatened to deploy nuclear armed missiles in Eastern Europe unles and until the U.S. backed off of its missile defense ambitions with Poland and the Czech Republic.

And the Medvedev/Putin thrust cannot be overlooked: the two had no qualms about invading Georgia to get the attention of the U.S. and NATO: and it worked.

Russian President Dmitry Medvedev visits a ballistic missile ...
Russia’s Medvedev, in front of a startegic Russian missile, said his missile advances will overwhelm U.S. defensive measures in the next few years.
AFP/Pool/File/Dmitry Astakhov

Terrorism could be the number one priority.  Just yesterday the U.S. Director of National Security said in essence that the Pakistani Islamist radical militant group  Lashkar-e-Taiba  blew up Mubai, India, last week, killing nearly 200.

On the same day, yesterday, a group of wise men said the U.S. can expect to face a biological or chemical attack.

Is another 9-11 in America’s future?  And are we ready to defend or respond?

Pakistan itself might lay claim to Mr. Obama’s top priority.  Bankrupt, last weekend rioters ripped through the nations largest city, the Pakistani Army was pinned down by terrorists in the tribal areas, and the nuclear-armed government was under fire from all domestic and international sides over Mumbai.

A Pakistani newspaper wondered yesterday if the Army was about to break with the elected government of mr. Zardari and his Minister Mr. Gilani.

Then there are a few small matters with China, North Korea and you name it.

Oh and there are just a few domestic realities and campaign promises that need our next president’s attention: OPEC and oil, drill or not to drill, schools and education, tax relief, jobs and unemployment,health care, AIDS and the list goes on.

You won’t convince me for a second that the modern miracle of multi-tasking and several Blackberries will resolve this poisonous soup.

America needs to take a deep breath and close its eyes: too much Obama-mania could cause one not to think.

Mr. Obama, the United States, all Americans and all Western allies are in for some very hard work, sacrifices of an unknown nature, and difficult decisions.

Here’s a simple truth: The age of simplicity is over.

*****

From Wikipedia:

It’s the economy, stupid” was a phrase in American politics widely used during Bill Clinton‘s successful 1992 presidential campaign against George H.W. Bush. For a time, Bush was considered unbeatable because of foreign policy developments such as the end of the Cold War and the Persian Gulf war. The phrase, coined by Clinton campaign strategist James Carville, refers to the notion that Clinton was a better choice because Bush had not adequately addressed the economy, which had recently undergone a recession.

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Vietnam’s First Refinery Readies to Process Domestic Crude

December 1, 2008

Vietnam’s first oil refinery will use 4 million metric tons of crude from Bach Ho field during a one- year test-run, Vietnam News Agency reported, citing state- controlled Vietnam Oil & Gas Group.

Dung Quat refinery, scheduled to start up by February, will produce 3.4 million tons of petroleum products initially and 5.7 million tons by 2010, the report said today. The plant will need about 6.5 million tons of crude annually.

Bach Ho, the country’s biggest oil field, has been operated by Vietnam Oil & Gas and Russia’s OAO Zarubezhneft for more than two decades. The field produced 4.02 million tons of crude between January and July, according to the joint venture.

By Nguyen Dieu Tu Uyen
Bloomberg

Iran Again Pushes OPEC to Cut Oil Production, Raise prices

November 15, 2008

Iran called on OPEC Saturday to cut production by a further 1 million to 1.5 million barrels per day when it meets in Cairo later this month, state television’s website reported Saturday.

Iran’s OPEC governor, Mohammad Ali Khatibi, said the cartel needs to act to slash output because demand for oil has declined due to the global financial meltdown.

OPEC, which produces about 40% of the world’s crude oil, decided to cut production by 1.5 million barrels a day last month in response to a dramatic fall in oil prices from a record $147 in July to below $70 last month.

Despite the cut, oil prices have continued to decline. Light, sweet crude for December delivery fell $1.20 to settle at $57.04 a barrel on the New York Mercantile Exchange Friday.

Diving prices have forced OPEC to plan an extraordinary meeting in Cairo, scheduled for Nov. 29, to discuss the plunge.

Iran, OPEC's number two oil producer, favours a cut in crude ... 
Iran, OPEC’s number two oil producer, favours a cut in crude production of 1.0 to 1.5 million barrels per day when the oil cartel meets in Cairo later this month, state television has reported.(AFP/Getty Images/File/David McNew)

Read the rest from the Associated Press and USA Today:
http://www.usatoday.com/money/industries/energy/
2008-11-15-opec_N.htm?csp=34

Global Economic Mess Makes G-20 Summit Sober, Serious, Anti-Junket

November 14, 2008

There are no plans for sightseeing tours, shopping sprees or three-anything lunches when leaders from 20 countries, accompanied by large delegations of officials, business people and journalists, visit the capital during the next two days for a world economic summit.
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By Pamela Constable 
Washington Post Staff Writer

Instead, the event promises to be brief, sober and businesslike, in keeping with the grim financial outlook facing every country at the summit, including the host, and the timing of the meeting during a power lull between administrations in Washington.

“There will not be much time. Our delegation will arrive at 6 p.m. tomorrow and leave right after the meeting and possibly a press conference Saturday,” Emanuel Lenain, a spokesman for the French Embassy, said yesterday. Between formal discussions, he said, President Nicolas Sarkozy “will work and work.” His glamorous wife, former model Carla Bruni, will not be with him, and he will attend tonight’s White House dinner alone.

Read the rest:
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/13/AR2008111304039.html

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G-20 To Consider Monitoring World Banking Among Proposal

By Anthony Faiola and Glenn Kessler

Washington Post Staff Writers
Friday, November 14, 2008; Page A01

Nations are close to adopting a series of measures aimed at combating a global recession and laying the groundwork for a broad reconstruction of the international financial system, as world leaders arrive in Washington for a major economic summit this weekend.

Read the rest:
http://www.washingtonpost.com/w
p-dyn/content/article/2008/11/13
/AR2008111303844.html

Iran: OPEC may need further cut if prices drop

November 6, 2008

OPEC may need to cut its oil output more but it remained too early to tell if a further reduction was needed, Iran’s OPEC governor Mohammad Ali Khatibi told Reuters on Wednesday.

“It is too soon to say whether OPEC’s November cut agreement has been successful. We should wait and see,” Khatibi said.

“But if crude prices continue to fall, then an additional OPEC cut may be needed.”

The producer group agreed to cut output from November 1 by 1.5 million barrels per day (bpd) after oil prices dived from a July record of $147 a barrel to less than half that. U.S. crude was trading around $68 a barrel on Wednesday.

Venezuela said on Tuesday it will propose another cut of 1 million bpd at the cartel’s next meeting, which is expected to be held in December.

Iran, the world’s fourth largest oil producer, has already started informing buyers that it is cutting back sales. Iran’s share of OPEC cut was 199,000 bpd.

“Iran and other OPEC members have been committed to OPEC’s November cut agreement,” Khatibi said.

“Creating a balance between oil supply and demand is OPEC’s priority.”

An oil pump decorated to look like a bird stands at rest Wednesday, ...
An oil pump decorated to look like a bird stands at rest Wednesday, Nov. 5, 2008, in oil fields near Awali, Bahrain. Oil prices slid below US$68 a barrel Wednesday on expectations a slowing global economy will cut crude demand, and even indications OPEC is enacting its decision to take a daily 1.5 million barrels from the market failed to support prices.(AP Photo/Hasan Jamali)

Read the rest:
http://news.yahoo.com/s/nm/20081105/bs_nm/us_iran_opec_1

Oil drops near 6 percent on slumping demand

November 3, 2008

Oil fell nearly 6 percent on Monday as further indicators of falling demand linked to a potential recession offset OPEC plans to reign in output.

U.S. crude settled down $3.90 at $63.91 a barrel, after October saw the steepest monthly price decline ever for oil as global demand slowed. London Brent crude dropped $4.84 to settle at $60.48 a barrel.

By Edward McAllister, Reuters

Oil hit a record $147.27 a barrel in mid-July but has since more than halved as poor economic data added to pressure from weak demand reports in the United States and other key consumer nations.

Oil rigs extract petroleum in Culver City, Los Angeles, April ... 
Oil rigs extract petroleum in Culver City, Los Angeles, April 2008. World oil prices slipped on Monday as traders took profits after a pre-weekend rally, and tracked concerns about the impact of a global recession on energy demand, analysts said.(AFP/Getty Images/File/David McNew)

“The most devastating blow for crude oil today is data showing that U.S. manufacturing activity in October fell to the lowest level in 26 years, which means more worries for oil demand,” said Phil Flynn, an analyst at Alaron Trading, in Chicago.

“Manufacturing used to be a great forward indicator for oil demand, but if the manufacturing sector is down, it will be a struggle to keep oil demand up,” he added.

U.S. factory activity — a barometer for future oil demand — contracted sharply in October, falling to its lowest in 26 years as the financial crisis racked the world’s largest economy.

The Institute for Supply Management said its index of national factory activity fell to 38.9 in October from 43.5 in September. A reading below 40 is exceptionally weak.

BP (BP.L) Chief Executive Tony Hayward estimated U.S. demand has dropped 2 million barrels per day on the year over the last four weeks.

Read the rest:
http://news.yahoo.com/s/nm/20081103/bs_nm/us_markets_oil_9

Russia pushes an ‘OPEC’ for natural-gas nations

October 30, 2008

The nations with the world’s three biggest reserves of natural gas – Russia, Iran, and Qatar – are quietly moving ahead to form a “gas OPEC,” an organization modeled after the oil cartel.

By Fred Weir
The Christian Science Monitor
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In Tehran last week, representatives of the Russian natural-gas monopoly Gazprom met with counterparts from Iran and Qatar and agreed to create “a big gas troika.” The group will meet quarterly to discuss pricing and supplies. Between them, these three countries hold an estimated 55 percent of known global gas reserves. The possibility of a cartel has long been opposed in Washington and European capitals.

The new cartel plan may be finalized Nov. 18, when Russia hosts a forum of gas-exporting countries in Moscow, including possible additions to the group such as Algeria, Indonesia, Libya, and Venezuela.

For Russia, which blames the US for causing the current global financial crisis and the attendant collapse of oil and other commodity prices, forging new energy-based international relationships holds political promise. “There is a clear desire in Moscow to work toward breaking what it perceives as US dominance of the world economy, but it’s way too soon to predict where this global crisis is leading,” says Masha Lipman, an expert with the Carnegie Center in Moscow. “If the US should really go into decline, I suppose we shall see new groups of states, and new contenders, come forward.”

As global energy prices plunge, cooperating with the Organization of Petroleum Exporting Countries (OPEC) to stabilize markets has gained fresh traction in the Kremlin while the long-discussed idea of creating a “gas OPEC” of leading producers is suddenly getting a big push from Moscow.

Read the rest:
http://news.yahoo.com/s/csm/2008
1030/wl_csm/oredopec_1

Opec talks push oil prices higher

October 29, 2008

Global oil prices have risen on growing expectations that producers’ cartel Opec will vote to cut production.

US light crude was up $2.09 at $73.94 a barrel, with Brent up $2 at $71.62, ahead of Opec’s meeting on Friday.

Fears of a global economic slowdown have pushed oil prices down by half since July’s all-time highs.

Gulf of Mexico oil rig

Opec is meeting in Vienna on Friday

A number of Opec members, including Algeria, Iran and Venezuela, have already said they would like to see output cut to help shore up prices.

Growth risks

Opec’s meeting has been brought forward by three weeks in response to the recent fall in oil prices.

Algeria’s energy minister and Opec president Chakib Khelil said he expected the organisation to announce “substantial” output cuts.

Most oil analysts are now in agreement, with Merrill Lynch estimating that production could be cut by one million barrels per day.

Energy consultancy CGES says Opec will argue that it has to cut production to prevent a further “price collapse”.

Read the rest:
http://news.bbc.co.uk/2/hi/business/7680671.stm

OPEC slashes production; crude continues to tumble

October 24, 2008

OPEC said at an emergency meeting Friday that it will slash oil production by 1.5 million barrels to stem the “dramatic collapse” of oil prices, but crude prices plunged 7 percent anyway as financial markets spiraled downward across the globe.

By GEORGE JAHN, Associated Press Writer

Demand for crude has evaporated and the supply levers held by the Organization of Petroleum Exporting Countries appear to have little influence in the current economic climate.

Iran and Venezuela pushed for a cut of 2 million barrels a day, but there were concerns among other OPEC members that a more severe production cut would exacerbate a deteriorating economic crisis and further destroy demand.

OPEC officials, however, signaled they were prepared to slice deeper quickly if crude continues its freefall.

OPEC is already producing 300,000 barrels a day above its own quota of about 29 million barrels.

If that overproduction is stopped, and all members comply with the 1.5-million cut, OPEC would produce about 1.8 million fewer barrels of oil a day.

OPEC officials, however, left no doubt that they were ready to slice production again quickly if Friday’s decision does not end the price freefall.

The emergency meeting was initially scheduled for Nov. 18, but that was abruptly rescheduled for Friday in response to prices that have entered a tailspin since their historic high of nearly $150 in July.

OPEC President Chakib Khelil said OPEC was ready to convene another emergency session before its next planned gathering in December in Algeria “if there are further decisions that have to be made.

Analyst John Hall of London-based John Hall Associates said the OPEC decision will not have a dramatic effect, adding he assumed any upward trend would stop at between $80 and $90.

But there was no such trend Friday as markets plunged global and fear of an extended recession spread.

Wall Street joined world stock markets in a precipitous plunge, with the Dow Jones industrials dropping more than 400 points in the opening minutes of trading.

Oil futures slid $4.46 to $63.38 a barrel on the New York Mercantile Exchange.

“It’s clear that the ministers are attempting to underpin at $60 a barrel,” said James R. Crawford an analyst with Inter Emirates. “But where the market will settle remains open.”

Read the rest
http://news.yahoo.com/s/ap/20081024/ap_on_bi_ge/eu_opec_
meeting;_ylt=AtVi.2T5ipPpGTmFXXdm3Ais0NUE

OPEC Ponders Price Rise, Production Cut

October 23, 2008

VIENNA (AFP) – OPEC President Chakib Khelil said Thursday that the oil producers’ cartel will decide to cut production at an emergency meeting due in Vienna but was wary of worsening a global financial crisis.

Chart showing the price of New York light sweet crude from January ... 

“We are going to reduce (output on Friday). By how much? We don’t know. This is something we are going to decide tomorrow,” Khelil, who is also the energy minister of OPEC member Algeria, told reporters in Vienna.

“It’s a concern that we could make the financial crisis worse by taking too strong a reduction,” said Khelil, adding however that the decision “should not impact the world economy which is already in pretty bad shape.”

Iran — OPEC’s second biggest oil exporter — and Libya both called for a reduction of two million barrels per day, while Venezuela said there should be a cut of at least one million barrels.

British Prime Minister Gordon Brown recently said that any reduction made in a bid to push up oil prices would be “scandalous” at a time when major economies are close to recession.

The price of New York oil dived Thursday to a 16-month low, as recession fears stoked concerns about falling crude demand, traders said.

New York’s main contract, light sweet crude for December delivery, sank as low as 65.90 dollars per barrel — a level last seen on June 13, 2007.

Crude futures in New York and London have plunged 56 percent from record highs of above 147 dollars a barrel reached only three months ago when supply concerns sent prices soaring.

“The market focus today (Thursday) and particularly tomorrow will be on the OPEC emergency meeting,” said analysts at Barclays Capital in London.

“Indicating the inevitability of a substantial cut, Chakib Khelil, the OPEC president, commented yesterday that ‘the stocks are very high… some of us are not able to sell the crude.'”

The Organization of Petroleum Exporting Countries produces 40 percent of the world’s oil and its official output quota stands at 28.8 million barrels per day.

Saudi Oil Minister Ali al-Nuaimi refused to be drawn on talk of a scaling-back to output as he arrived in the Austrian capital on Thursday.

However Libya’s Oil Minister Shukri Ghanem told reporters that “a huge cut” of “two million barrels” was required to create a balance between supply and demand.

Venezuelan Energy Minister Rafael Ramirez said there should be a cut of at least one million barrels. Ramirez added that he believed there was a consensus among OPEC’s 12 members for a cut.

OPEC’s Gulf state members led by Saudi Arabia, the world’s biggest oil exporter, are expected to oppose a reduction of more than one million barrels, analysts said on Thursday.

Read the rest:
http://news.yahoo.com/s/afp/20081023
/bs_afp/opeccommoditiesoilprice