OPEC struggles as oil prices remain low
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SPECIAL TO WORLD TRIBUNE.COM
Wednesday, October 24, 2001
ABU DHABI Ñ OPEC has confronted a dilemma in efforts to drive oil
prices back to the level of $22 a barrel.
Industry sources said most OPEC members, including Arab allies of the
United States, agree that the current price of less than $20 a barrel is too
low. But they disagree on whether a cut in oil production would result in a
price increase.
Several OPEC members are calling for a cut in production of up to three
million barrels a day. But Kuwait and Saudi Arabia oppose the move, saying
this will merely leave the oil market to independent producers.
The sources said OPEC appears to have failed in an attempt to coordinate
the cartel's steps with independent producers. These include countries from
Africa and Central Asia.
The result is that some analysts are warning that oil prices will
continue to drop amid a global economic downturn. "We are in a classic
uncertain world where a number of events are taking place," Peter Parris,
Middle East advisor to Energy Industries Council, UK, told the Abu
Dhabi-based Gulf News. "In fact, oil prices may go lower."
OPEC producers are meeting independent oil exporters later this month in
Vienna to discuss a coordinated strategy. Industry sources said the pressure
is greatest on Gulf Arab countries, who have assessed their expected incomes
for 2001 on an average oil price of $25 a barrel.
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