Nicosia Ministers from the member nations of the
Organisation of Petroleum Exporting Countries (OPEC) are likely to
leave crude oil output on hold when they meet in Vienna on Thursday,
with oil prices trading above 60 dollars a barrel after the heavy
losses in January, the Middle East Economic Survey reported Monday.
The Cyprus-based weekly publication said that the latest surveys
of OPEC output indicate that member countries started cutting
additional volumes in February, so ministers are more likely to focus
on improving output compliance than discussing fresh cuts.
However, much will depend upon OPEC's latest supply and demand
balance forecast for the second quarter, a period when oil demand
tends to slip lower after the end of the high-demand northern
hemisphere winter, the MEES report said.
In particular, ministers will survey demand figures that show a
considerable softening of the Organisation of Economic Cooperation
and Development (OECD) demand during the first quarter and the extent
to which this is compensated for by strong Asian and Middle East oil
demand growth which, according to OPEC, accounted for more than 90
per cent of global growth in the first quarter.
But while oil prices are well below the 78 dollars-a-barrel peak
of 2006, there are concerns within OPEC that prices above 60 dollars
a barrel could damage demand in the longer run, by prompting
conservation and alternative energy technologies.
Although these concerns have yet top be articulated, the MEES
report suggested that some delegates are privately worried that
tighter monetary conditions and the ballooning of US trade deficit
could shave global economic expansion particularly in the developing
world, the source of the bulk of oil demand growth.
© 2007 dpa - Deutsche Presse-Agentur 
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