June 11, 2008 - The EU-OPEC meeting heard a progress report on an joint study of the
impact of financial markets on oil prices but Piebalgs said that any tighter
supervision of financial markets would only make it "more certain" that there
was no market manipulation taking place.
"The producers and consumers are very much worried about the level of oil
prices and the volatility of this price because it undermines consumer action
and the stability of investment for producers," Vizjak said after the meeting.
"We need to work much more closely to discover which actions need to be
taken."
Ahead of the meeting, Piebalgs had said he would ask OPEC to abolish its
crude production targets as part of measures to help reduce record oil prices,
despite Badri's comments that there was little OPEC could do to bring prices
down.
"In my opinion there is no need to keep any more ceilings for production,
because it's very clear that, if there was no ceiling, the market will adapt
much faster to the [price] impact and we could expect prices to go down,"
Piebalgs told reporters ahead of the meeting.
Piebalgs said he had raised the issue with OPEC producers at oil talks in
the Saudi city of Jeddah on Sunday but that he would reiterate the point with
Khelil at the meeting.
OPEC's twelve members bound by production limits--13th member Iraq
remains outside the quota system--have a combined crude output ceiling of
29.673 million b/d.
"It was a necessary ceiling when poor producers were uncertain whether
the prices would be high enough to support future investment, but I think
today nobody doubts that the price level, even if goes down, will be a
sufficient incentive to really invest in future production facilities,"
Piebalgs said.
"In my opinion it's not necessary to keep it any more, I will express
this as my wish."
Despite the nominal production ceiling, most OPEC producers have been
pumping at close to maximum capacity in recent months.
Saudi Arabia, the only significant holder of spare capacity, is currently
pumping well above its nominal allocation of 8.943 million b/d.
Looking ahead, Khelil said he expected oil prices in the coming months to
be determined by the strength of the US dollar and news about Iran and its
controversial nuclear program.
"On oil prices, it all depends on what happens to the dollar. The market
is probably waiting to see how the dollar will evolve in July, how the
geopolitical situation is going to evolve with threats of an attack on Iran,"
Khelil said.
Vizjak said the meeting also discussed the results of a joint study on
global refining capacity and said the two parties would push ahead with a
report on impact of the financial markets on oil prices.
"Refining is moving in the right direction, there are new investments,
still bottlenecks, but we shouldn't be too worried about refining capacity in
the medium and longer term," Vizjak said.
Return to top
|
Fast-breaking, global petroleum and gas news written by correspondents around the world and covering supply and demand trends, corporate news, government actions, exploration, technology, and more.
▪ Request a free trial
▪ See a sample
▪ Get your newsletter subscription now
|
Printer-friendly format