Talking to RIA Novosti, a high-placed OPEC source noted that OPEC ministers will hold their informal conference Friday, May 21. That conference would be expected to elaborate the international oil cartel's agreed-upon position as regards OPEC's attitude toward oil-consuming countries, which will also attend the forthcoming energy forum.
According to the source, OPEC is highly unlikely to adopt any official oil-quota decision within the Amsterdam forum's framework. Nonetheless, the informal conference's agenda will feature a proposal by Saudi Arabia, which is the main OPEC heavy-weight warrior, on increasing daily oil-export volumes by 1.5 million barrels. (One barrel totals approximately 159 liters - Ed.) The Amsterdam energy forum is the appropriate venue for bringing the positions of all 11 OPEC members to a common denominator because, despite a statement by OPEC President Purnomo Yusgiantoro (Indonesia) about the need to support Riyadh's proposal or to go even further and to increase oil quotas by 15 percent, some OPEC countries are not very happy about the Saudi proposal. Nor do they have any intention of approving more substantial oil-export volumes, the source noted.
In his opinion, far from all OPEC oil ministers will attend the Amsterdam forum, with some of them preferring to coordinate the most topical issues over the phone.
OPEC conferences alone have the right to decide on such principled issues as oil quotas only by consensus, the source noted.
A barrel of WTI oil now costs more than $40 at the New York commodity exchange; meanwhile the OPEC oil-price limit is just $28. Therefore one can safely say that OPEC is unable to control global oil prices. This can be explained by the fact that oil-production volumes are now something irrelevant; specific oil prices depend on the stock-market situation. Increased global instability compels the stock market to channel its capitals into the commodity market, thus facilitating higher prices for all resources, i.e. oil, gas and metals, leading analysts say.
Riyadh's proposal on increasing total OPEC oil-output volumes by 1.5 million barrels seems impracticable because OPEC countries are now working at the limit of their capacity. Consequently, it's well-nigh impossible to expand oil production still further. Saudi Arabia itself is now forced to substitute domestic fuel-and-energy demand by natural gas for the sake of exporting more oil than before. Interesting, as it may seem, but the 1.5-million-barrel quota equals Iraqi quotas, which can't yet be fulfilled for objective reasons.
OPEC countries account for nearly 30 million barrels of daily global oil demand (78 million barrels). The so-called independent producers, including Russia, Norway and Mexico, provide the rest. Incidentally, Russian crude-oil exports now match Saudi oil-export volumes (8.5 million barrels a day), possibly even surpassing these levels.