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Oil Prices Dip to $104 as OPEC Worries about Demand
As international oil prices continue to fall, the meeting held by the International Petroleum Exporting Organization (OPEC) in Vienna yesterday was once considered by the market to be a "production reduction" summit. However, all member countries participating in the meeting yesterday expressed their intention to maintain output unchanged.Affected by this, international oil prices continued to decline yesterday. As of 21:35 Beijing time yesterday, the October crude oil futures price in New York was US$104.20 per barrel, down US$2.15 or 2.02% from the previous trading day, another record high in the past five months. New low. Statistics show that oil prices have fallen by nearly 30% since July.
"The oil market is currently balanced between supply and demand, and inventories are sufficient." Saudi Oil Minister al-Naimi said when he arrived in Vienna to attend the OPEC meeting yesterday that oil-producing countries have worked hard to increase production since June, causing oil prices to drop to current levels. He believes that Saudi Arabia's production increase has been successful in curbing surging oil prices, suggesting that Saudi Arabia will not cut current OPEC production levels, and said, "The market supply and demand are quite balanced, and the inventory is sufficient. We can provide as much as the market needs." "He also reiterated that Saudi Arabia's consistent oil production policy is in line with market demand.
Ahead of the OPEC meeting, analysts expect OPEC to maintain its current production cap, but some member countries may call for informal production cuts due to recent production exceeding self-imposed target levels.
Iran's director to OPEC, Khatibi, also said yesterday that members of the OPEC advisory team generally agreed on the evening of the 8th that OPEC must stick to its formal production quotas. Khatibi said that the Ministerial Monitoring Committee (MMC) meeting on the 8th deemed it necessary to adhere to the quota, and OPEC will hold a meeting of all members on the evening of the 9th to discuss the issue.
A representative attending the OPEC meeting told the outside world that the oil ministers of OPEC member countries have reached an informal consensus and may convene a special OPEC meeting in November. Previously, OPEC's next regular meeting was scheduled to be held in Oran, the capital of Algeria, on December 17. However, some member countries were worried that the oil market would be oversupplied by then, causing oil prices to face further downward pressure.
Slowing demand is an important reason why some OPEC members requested production cuts on the eve of this meeting. According to data from the U.S. Energy Information Administration, a group of industrialized countries that organizes economic development, oil demand fell from an average of 48.92 million barrels per day in 2007 to 48.39 million barrels per day in 2008. In 2009, its oil consumption will be reduced to 48.12 million barrels per day.
Merrill Lynch pointed out that in the long run, OPEC is worried that slowing demand will lead to an increase in inventories at the end of the year, causing crude oil prices to continue to fall. Even if OPEC cuts production, it will not change this situation. The Merrill Lynch report believes that any attempt to boost oil prices will only increase oil reserves and make people seek alternative energy sources, leading to a decline in oil demand.
According to relevant statistics, OPEC's actual output is much higher than official data. According to data from the U.S. Energy Information Administration, the crude oil production of OPEC member countries in May 2008 was 33.69 million barrels per day. If Iraq is not included, it was 31.25 million barrels per day. But its official data does not include Iraq, which is 29.67 million barrels per day.
Analysts from the Cambridge Energy Research Association pointed out that this OPEC meeting exposed the differences between countries on the bottom line of oil prices. Saudi Arabia believes that oil price of US$80 per barrel is a reasonable price bottom line, but Iran and Venezuela do not want oil prices to drop to US$100 per barrel. the following. He predicted that formal discussions on oil production cuts would have to be postponed to at least a meeting in Algeria on December 17.
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