Nigeria and others blame non-OPEC members for oil price woes

Apr 28, 2009 02:00 AM

Nigeria and other members of the Organisation of Petroleum Exporting Countries (OPEC) have accused non-members for oversupplying global market with 720,000 bpd.
The aggrieved members of oil cartel stated through one of their chieftains, Chakib Khelil that the non-OPEC members have continued to increase output at a time OPEC slashed 4.2 mm bpd from its production to save the price from the oversupplied market. Khelil, Algerian Oil Minister stated this just as oil sunk to $ 48.62 a barrel while events also suggested that the prices would continue to slide.

The United States, world's largest oil consumer said that its economy, which consumes over 50 % of Nigeria's oil exports, would continue to contract "for some time." Director of the White House National Economic Council, Lawrence Summers, stated this while Khelil added that increased output by non-OPEC producers has left the market oversupplied by about 720,000 bpd.
"On the downside we have weak demand worldwide that's leading to high inventories and massive spare capacity at the OPEC," said Eugen Weinberg, analyst at Commerzbank in Frankfurt.

Crude prices need to be at $ 70 a barrel to ensure continued investment in the industry, Abdalla el-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said in Algiers. Oil may reach $ 60 a barrel by the end of 2009, Khelil said.
OPEC pumps about 40 % of the world's oil. The group agreed last year to cut output by 4.2 mm barrels and will review production again when it meets again. Saudi Arabia, the biggest producer, is under pressure from the rest of OPEC to pare output further, the kingdom's former oil Minister Sheikh Ahmad Zaki Yamani said in Cairo.

Source / Daily Independent
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