OPEC asks U.S. to tap oil reserveshttps://www.iht .com/articles/2004/10/27/business/oil.html
OPEC asks U.S. to tap oil reserves
I won't even begin to comment on the absurdity of this...the times, they are a
changin!
The New York Times, Reuters
Thursday, October 28, 2004
JAKARTA The Organization of Petroleum Exporting
Countries has called on the United States to dip into its strategic petroleum reserve
to help deflate oil prices, the cartel's president said Wednesday.
.
"We had communication with them," OPEC's president, Purnomo Yusgiantoro,
told reporters, referring to U.S. policy makers. "I asked them to use their reserves."
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Purnomo, who is also Indonesia's oil minister, did not describe Washington's
response.
.
Crude prices were down slightly after the comments. Crude for December
delivery was at $55.05, down 12 cents, in premarket trading on the New York
Mercantile Exchange.
.
Oil prices have soared around 70 percent this year, to over $50 a barrel, on rapid
demand growth that has strained global supply and left OPEC members little spare
production capacity to cool prices.
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The Bush administration has consistently rebuffed calls to use U.S. emergency
reserves to reduce prices. The reserve was set up after the 1970s Arab oil embargo
as a counterweight to OPEC's market power. The White House says only a severe
supply disruption would warrant a release.
.
Analysts said Purnomo's request to Washington was unusual, as OPEC usually
regards government stockpiles as a threat to its own market influence.
.
"The OPEC president has the mandate to make unilateral approaches on behalf of
the whole organization," an OPEC official said. "He has already called on all
producers to raise output, so it's not really a departure from that policy. It is an
irony though."
.
In a report Tuesday, the International Energy Agency stressed the need for oil-
producing countries and international oil companies to increase their investments
in finding and pumping oil.
.
The agency said there were sufficient oil reserves to meet demand for at least the
next 30 years. But it said that not only would oil companies have to increase their
spending, oil-producing countries would also have to allow more outside access to
their reserves.
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It predicted that world oil demand would grow about 50 percent, to 121 million
barrels a day, by 2030. To meet that growth, the industry would have to spend
about $105 billion each year "from the wellhead to the consumer," according to the
agency, an adviser to oil-consuming nations.
.
The agency acknowledged in its annual report, the World Energy Outlook, that it
failed to foresee the growth in demand for oil by China but said that its predictions
should improve now that China had agreed to share its data on production and
consumption.
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The report warned of a drop in oil production and shortfalls in supplies if oil
companies and oil-producing countries do not make huge investments, totaling $3
trillion over the next three decades, in everything from developing new fields to
building more tankers, pipelines and refineries.
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"The availability of oil in terms of reserves and geology isn't an issue but the
problem is whether the oil can find the money," Fatih Birol, chief economist of the
International Energy Agency and the principal author of the report, said in an
interview.
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"Will that strategic meeting take place?"