Milan (AsiaNews) Energy needs in China and India are expected to keep demand for oil high and was probably one of the reasons why, at a meeting in Vienna, OPEC decided not to reduce current production levels and defend a US$ 40 price floor for US crude. But in March, at a scheduled meeting in Tehran, prices might go up.
OPEC producers agreed to keep output limits on hold at current levels of 27 million barrels per day convinced that current oil prices are not stifling world growth. In fact, with inflation in the world's big economic powers under control and interest rates still low cartel ministers see above average economic growth.
With prices at "US$ 50, oil will not play a big role in slowing up growth of the economy. Some analysts say even US$ 60 oil will play a small role in affecting growth," said OPEC President Sheikh Ahmad al-Fahd al-Sabah.
OPEC now appears ready to defend oil prices at a floor of about US$ 40 a barrel for US crude, or US -5 for a reference basket of cartel crudes, replacing the old US$ 22-28 range for the basket that was set in March 2000,.
Qatar's Oil Minister Abdullah bin Hamad al-Attiyah said OPEC would probably have a surplus of 1.5 million barrels a day during the second quarter. This means that a cut in production might be decided in next OPEC's March meeting in Iran.
Some OPEC delegates stress that sustained economic growth in China and India will keep demand for oil high. Other analysts point to continued tensions between the US and Iran over the latter's uranium enrichment plants as a factor in high prices.
Speaking at the World Economic Forum in Davos (Switzerland), Thierry Demarest, chairman of the French oil group Total said that continuing tightness of spare production capacity was the main reason oil markets remained nervous. Prices would be maintained by growing demand from China, India and other fast-growing economies, he added.