Interesting news on the energy front, today:
VIENNA -Wall Street Journal- The Organization of Petroleum Exporting Countries on Sunday decided against new production cuts and urged its members to fully implement the output reductions the cartel announced in late 2008, Iraqi oil minister Hussein al-Shahristani and OPEC delegates said.
“It’s a rollover, and they’ve urged everyone to get into line [and comply],” one delegate said.
OPEC’s top oil producer Saudi Arabia resisted new production cuts Sunday out of concern for the economy, a delegate said.
“We have agreed that all members [should] adhere to previous cuts,” Qatari oil minister Abdullah bin Hamad Al Attiyah said. “We agreed to remove 800,000 barrels a day, the remaining [amount] of the previous cuts.”Iran and Kuwait had wanted more cuts but agreed to leave the group’s existing production ceiling unchanged for now, the delegate said.
Saudi Refinery
The group agreed to fully comply with the existing output cuts that OPEC announced late last year, Mr. Attiyah said.
Some background:
The reasoning behind Iran and Kuwait wanting more production cuts is that they need the price to be raised to be able to make any serious money out of their oil fields. They’re production costs on a per barrel bases are much higher than everyone else is. There is much in the way of speculation that the Saudis are intentionally keeping the Iranians at bay financially so that they don’t have to keep them at bay militarily.
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