OPEC won’t add oil to global economic woes

  • Thursday, September 27, 2001 9:00pm
  • Business

Associated Press

VIENNA, Austria — OPEC members have decided to continue pumping at current levels of production despite a dramatic drop in oil prices since the terror attacks on the United States.

Representatives of the Organization of Petroleum Exporting Countries announced their decision Thursday after a final round of talks at the cartel’s headquarters in Vienna, Austria.

Confronted by shrinking demand for oil and uncertainty over U.S.-led military action against terrorism, OPEC delegates plan to reconvene on Nov. 14 to review market conditions. They said they would cut output at that time if necessary.

OPEC’s official output target is 23.2 million barrels a day. The group supplies almost 40 percent of the world’s oil, including overproduction estimated at between 700,000 and 1.5 million barrels a day.

It has cut back its official production three times this year already, most recently by 1 million barrels a day on Sept. 1.

The delegates agreed Wednesday to stick with their current production quotas but postponed announcing their decision until Thursday because they needed to wrangle over the precise wording of their official communique. The one-day delay reflected the difficulty OPEC’s 11 member nations have had in reaching a consensus amid the intense economic and political unease prevailing since the Sept. 11 attacks on the United States.

"The deteriorating global economic outlook, exacerbated by the recent tragic events in the USA, is expected to have a dampening effect on world oil demand," OPEC said in its communique. In order to maintain stability in oil markets, the group decided not change its official output and to maintain discipline among its members.

OPEC did not rule out adjusting output before its November meeting if prices remained unacceptably low.

"We still have as a target to stabilize prices between $22 and $28 (a barrel)," OPEC president Chakib Khelil told a news conference. He said the group would use "any measures," including holding telephone conferences as it did when it cut output in July, to try to defend that target.

Under an existing arrangement, OPEC has said it will cut its daily production by 500,000 barrels if its benchmark price for crude falls below $22 a barrel for 10 consecutive trading days. The OPEC benchmark price stood at $20.11 on Wednesday, the most recent day for which the information was compiled. It was the third consecutive day on which the OPEC benchmark was below $22.

Several delegates said they believed the slide in prices would be temporary.

"Prices will in the coming weeks return, I am sure, to an acceptable level," OPEC Secretary-general Ali Rodriguez told reporters.

Still, Kuwaiti Oil Minister Adel al-Subeih said he would not be concerned if the price stayed at or even slightly below $22 a barrel. "We would be satisfied with that," he said.

Energy analyst Raad Alkadiri seemed to agree.

Prices ranging from $20 to $22 a barrel are "not a nightmare" for OPEC, said Alkadiri of The Petroleum Finance Co., a Washington, D.C., consultancy. "They can still balance their budgets. This is not asking OPEC to tighten their belts too much."

The meeting took place amid unusually tight security, in the wake of the attacks on New York and Washington. German shepherd police dogs had earlier prowled the building sniffing for bombs, and extra police armed with assault rifles patrolled inside and outside the building.

Khelil, speaking to delegates at the start of their meeting, extended OPEC’s condolences to the families of the victims of the attacks, before saying that the attacks would have a "profound" impact on global demand for oil.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

A closing sign hangs above the entrance of the Big Lots at Evergreen and Madison on Monday, July 22, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Big Lots announces it will shutter Everett and Lynnwood stores

The Marysville store will remain open for now. The retailer reported declining sales in the first quarter of the year.

George Montemor poses for a photo in front of his office in Lynnwood, Washington on Tuesday, July 30, 2024.  (Annie Barker / The Herald)
Despite high mortgage rates, Snohomish County home market still competitive

Snohomish County homes priced from $550K to $850K are pulling in multiple offers and selling quickly.

Henry M. Jackson High School’s robotic team, Jack in the Bot, shake hands at the 2024 Indiana Robotics Invitational.(Henry M. Jackson High School)
Mill Creek robotics team — Jack in the Bot — wins big

Henry M. Jackson High School students took first place at the Indiana Robotic Invitational for the second year in a row.

The computer science and robotics and artificial intelligence department faculty includes (left to right) faculty department head Allison Obourn; Dean Carey Schroyer; Ishaani Priyadarshini; ROBAI department head Sirine Maalej and Charlene Lugli. PHOTO: Arutyun Sargsyan / Edmonds College.
Edmonds College to offer 2 new four-year degree programs

The college is accepting applications for bachelor programs in computer science as well as robotics and artificial intelligence.

FILE — Boeing 737 MAX8 airplanes on the assembly line at the Boeing plant in Renton, Wash., on March 27, 2019. Boeing said on Wednesday, Feb. 21, 2024, that it was shaking up the leadership in its commercial airplanes unit after a harrowing incident last month during which a piece fell off a 737 Max 9 jet in flight. (Ruth Fremson/The New York Times)
Federal judge rejects Boeing’s guilty plea related to 737 Max crashes

The plea agreement included a fine of up to $487 million and three years of probation.

Neetha Hsu practices a command with Marley, left, and Andie Holsten practices with Oshie, right, during a puppy training class at The Everett Zoom Room in Everett, Washington on Wednesday, July 3, 2024. (Annie Barker / The Herald)
Tricks of the trade: New Everett dog training gym is a people-pleaser

Everett Zoom Room offers training for puppies, dogs and their owners: “We don’t train dogs, we train the people who love them.”

Andy Bronson/ The Herald 

Everett mayor Ray Stephenson looks over the city on Tuesday, Jan. 5, 2015 in Everett, Wa. Stephanson sees  Utah’s “housing first” model – dealing with homelessness first before tackling related issues – is one Everett and Snohomish County should adopt.

Local:issuesStephanson

Shot on: 1/5/16
Economic Alliance taps former Everett mayor as CEO

Ray Stephanson will serve as the interim leader of the Snohomish County group.

Molbak's Garden + Home in Woodinville, Washington will close on Jan. 28. (Photo courtesy of Molbak's)
After tumultuous year, Molbak’s is being demolished in Woodinville

The beloved garden store closed in January. And a fundraising initiative to revitalize the space fell short.

Everett Mayor Cassie Franklin, Advanced Manufacturing Skills Center executive director Larry Cluphf, Boeing Director of manufacturing and safety Cameron Myers, Edmonds College President Amit Singh, U.S. Rep. Rick Larsen, and Snohomish County Executive Dave Somers participate in a ribbon-cutting ceremony on Tuesday, July 2 celebrating the opening of a new fuselage training lab at Paine Field. Credit: Arutyun Sargsyan / Edmonds College
‘Magic happens’: Paine Field aerospace center dedicates new hands-on lab

Last month, Edmonds College officials cut the ribbon on a new training lab — a section of a 12-ton Boeing 767 tanker.

Gov. Jay Inslee presents CEO Fredrik Hellstrom with the Swedish flag during a grand opening ceremony for Sweden-based Echandia on Tuesday, July 30, 2024, in Marysville, Washington. (Ryan Berry / The Herald)
Swedish battery maker opens first U.S. facility in Marysville

Echandia’s marine battery systems power everything from tug boats to passenger and car ferries.

Helion Energy CEO and co-founder David Kirtley talks to Governor Jay Inslee about Trenta, Helion’s 6th fusion prototype, during a tour of their facility on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
State grants Everett-based Helion a fusion energy license

The permit allows Helion to use radioactive materials to operate the company’s fusion generator.

People walk past the new J.sweets storefront in Alderwood Mall on Thursday, July 25, 2024, in Lynnwood, Washington. (Olivia Vanni / The Herald)
New Japanese-style sweets shop to open in Lynnwood

J. Sweets, offering traditional Japanese and western style treats opens, could open by early August at the Alderwood mall.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.