OPEC's Cairo meeting was over before it began. Saudi Arabian oil minister Ali Naimi had spoken, and what he said was that a decision on whether or not to cut crude production further would be taken at a meeting scheduled for December 17 in Oran, western Algeria, not in the Egyptian capital.
So what was the point of the Cairo meeting? Quite a significant one, as it happens, because it threw up an important piece of information that reporters, analysts, oil companies and producing and consuming countries have been puzzling over for some time--where Saudi Arabia, the world's most influential oil producer would like to see the price of oil.
Naimi said $75/b was a fair price that would guarantee investment in marginal projects and safeguard future supplies.
And, in an interview with a Kuwaiti newspaper published on Saturday, Naimi's boss, King Abdullah, also highlighted $75/b, saying the recent slide had affected the kingdom's oil export revenues.
With US light crude futures having closed at $54.44/b in New York on Friday, analysts will now be calculating what the kingdom and OPEC are likely to have to do on the production front to get prices up by more than $20/b.
Will a new cut be necessary at OPEC's December 17 meeting in Oran, western Algeria, which has been scheduled for some time?
Yes, according to some ministers, who have seen the Cairo talks as simply setting the stage for a drama that will take place in Algeria.
Not necessarily, according to Naimi, who said earlier OPEC decisions in September and October to rein in overproduction and then to cut production from November "should have an impact" on the market. Naimi also reminded reporters that winter was on the way and should reduce high consumer inventories to more normal seasonal levels of 52-53 days.
Asked if OPEC was likely to cut production again in December, Naimi said: "A cut is possible, I don't know."--Margaret McQuaile
BOO HOO...the Saudis are losing money. It just breaks my heart(snicker). They are the LAST ones that should complain about money problems. They spend it like water !!! Tighten your gold plated belts a little !!!!!