The foreign, oil and finance ministers from the OPEC nations were converging on Caracas on September 25th, with their respective leaders expected to arrive in Venezuela the next day in advance of the second-ever OPEC heads of state conference on September 27th-28th.
In the lead up to the summit, the Group of Seven (G7) leaders agreed on September 23rd in Prague to send a letter to the OPEC rulers at their Caracas summit asking the group to do more to bring down high crude prices that have raised fears of inflation and its impact on world economic growth.
Crude prices, however, continued to fall on September 25th following U.S. President Bill Clinton’s September 22nd announcement that he was releasing as many as 30 million barrels from the Strategic Petroleum Reserve (SPR), with the possibility of more down the line. U.S. Treasury Secretary Lawrence Summers on September 25th suggested that other nations are considering tapping into their own national reserves to help contain crude prices.
Though OPEC continues to face pressure from consuming nations to do more, most of the member countries are already producing flat out, with only Saudi Arabia seen as having capacity enough to accommodate the organization’s September 10th decision to increase group output by 800,000 b/d.
In addition, as one industry analyst tells Oil Navigator™, “The summit was never supposed to be a volume meeting.” The heads of state are gathering at a time when Saudi Arabia and Venezuela appear to be vying for political leadership of the group and when Iraq has provoked new tensions among its Gulf neighbors.
( oilnavigator )
