OPEC unity helps strengthen oil price

Saudi Arabia is shipping less oil to customers. OPEC by February reduced daily output by one million barrels. Global inventories this year fell the most in a decade.

OPEC’s unity may keep oil from dropping below $US50 a barrel for years to come, energy experts say.
“They’ve learned their lessons,” said Daniel Yergin, author of the Pulitzer-winning history of the oil industry, The Prize: The Epic Quest for Oil, Money & Power. “They like this band from US$50 to US$60 and they prefer the upper part of the band rather than the lower part,” he said last week in Washington. “They’ve been pretty effective.”

OPEC, producer of 41 percent of global crude supplies, is generating record revenue, easing disputes among members about production quotas. Revenue was US$661 billion last year, up from US$554 billion in 2004, according to estimates by the Centre for Global Energy Studies.

In a sign of the group’s growing cooperation, they decided at their March 15 meeting in Vienna to wait six months for their next conference. Last year oil ministers met about every two months to debate production quotas.

Africast