UAE urges oil producers to cooperate

The UAE has urged cooperation among all oil producers to support sagging crude prices, and the call was promptly backed by non-OPEC Oman. Obeid bin Saif Al Nasiri, UAE Minister of Petroleum and Mineral Resources, said cooperation among producers inside OPEC and outside the group was needed because they all are hurt by lower prices.
"There is a need for all oil producers, whether they are OPEC members or not OPEC members, to control any surplus output especially in the current global economic circumstances," Nasiri told an economic conference in Abu Dhabi. "World demand has noticeably receded and if we do not move, then oil prices will continue to decline. This will deprive producing countries of a fair price and this in turn will have a negative impact on their economies." Nasiri said cooperation among oil producers and "understanding" by consumers would benefit the world's economy in the long term as it will create balance in the oil market and ensure supplies to consumers.

Oil prices plunged to their lowest level in two years amidst a global economic gloom aggravated by September 11 attacks in the US The decline has prompted calls by some OPEC members to cut production, although this means a further loss in the group's market share.
OPEC Secretary-General Ali Rodriguez said the 11-nation organisation could slash output by more than 1 mm bpd when it meets in Vienna on November 14. But he stressed independent producers must join the effort to revive prices that could otherwise slide further.
"We support OPEC's efforts to boost prices. We have always supported the organisation," Omani Oil Minister Dr. Mohammed Al Rumhi told at the Abu Dhabi conference. "We are also with the UAE's call for cooperation among all oil producers because supporting prices is the responsibility of all." Rumhi, whose country has acted as a co-ordinator between OPEC and other producers, said Oman would attend the November 14 meeting of the group as an observer to show its support for any decision to stabilisethe market.

Rumhi spoke after talks on the oil market on the sidelines of the conference with Nasiri and Qatari Energy and Industry Minister Abdullah bin Hamad Al Attiyah. Similar talks were held in Riyadh between Nasiri and his Saudi and Qatari counterparts. Oil prices have remained below $ 20 over the past few days, diving from more than $ 24 a barrel last month.
The fall has prompted the London-based Centre for Global Energy Studies to revise its scenario for average crude prices, which it earlier projected at around $ 24 this year. It now forecasts $ 22-23 for OPEC's basket compared with more than $ 27 last year.

The income of the UAE and other GCC states climbed last year to its highest level in 18 years to around $ 135 bn and the latest slide could push revenues down by nearly $ 30 bn. But they will remain much higher than the 1998 earnings of around $ 56 bn.