Sept. 9, An Important Day for Oil Prices?by Tim Manni
Iran, the Organization of Petroleum Exporting Countries’ (OPEC) second-largest oil producer, may urge the group to limit the amount of crude they export, in order to keep oil prices from falling below $100 a barrel. OPEC will meet on September 9 to discuss future oil production targets. So far this year, the 13 countries that make up OPEC have maintained an official output limit of 29.67 million barrels per day:
OPEC’s daily shipments of oil will fall 1.5 percent in the four weeks to Sept. 13, according to industry consultant Oil Movements as refiners trim imports while undertaking seasonal maintenance. The 13-member group will load 24.2 million barrels a day in the period, compared with 24.58 million barrels a day shipped in the four weeks ended Aug. 16, the Halifax, England- based consultant said Aug. 28 in a report.
Iran’s Oil Minister Gholamhossein Nozari said $100 a barrel is the “minimum” suitable level for crude, the Oil Ministry’s official news agency Shana reported today. The Iranian official said he expected crude prices to rise because of the expected increase in demand for fuel oil during the Northern Hemisphere winter.
Many analysts predict OPEC will reject Iran’s proposition to trim oil supplies, and will continue to export at their current pace:
“They want to prevent a build-up of crude stocks, which rules out an increase, but don’t want to send prices skyrocketing by announcing a cut,” said Mike Wittner, head of oil research at Societe Generale SA in London. “OPEC won’t take any formal action.”
Despite a strong cutback in consumer consumption, OPEC is still exporting barrels of oil at a record pace. Hopefully with no exporting restriction in the near future, gas prices will continue to decline. OPEC forecasts that oil consumption will increase only one percent in 2009, the smallest consumer increase in seven years.