OPEC sets emergency November meeting

OPEC has scheduled an emergency meeting in Vienna for Nov. 18 to discuss the global financial crisis, the world economic situation, and the impacts on the oil market.

Oct 9th, 2008

By OGJ editors
HOUSTON, Oct 9 -- The Organization of Petroleum Exporting Countries has scheduled an emergency meeting in Vienna for Nov. 18 to discuss the global financial crisis, the world economic situation, and the impacts on the oil market.

In a press release OPEC reiterated its determination to ensure that oil market fundamentals are kept in balance and market stability is maintained.

The Center for Global Energy Studies (CGES) said the pressure to hold a meeting—and presumably to discuss cutting oil output—came from the usual group of member-countries whose revenue ambitions have risen in step with the soaring oil prices of recent years but who have yet to adjust to the more recent downward correction in those prices.

Among this group of members, both Nigeria and Venezuela are producing below their unofficial quota allocations and would be relatively unaffected by the implementation of any agreement to reduce output, according to CGES.

"OPEC would be misguided in the extreme if it were to cut oil production in an attempt to boost oil prices as the Northern Hemisphere heads towards winter and global inventories remain tight," CGES said.

London-based CGES added that an easing of energy prices will provide a chance for the global economy to begin to recover, but a rebound in those prices would undermine confidence further and cut demand by even more.

"The wise heads in OPEC may well have preferred to avoid the November meeting. They may be persuaded once again to agree to output cuts on paper, but may once again decide to continue to produce the oil that their customers wish to lift," CGES said.

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