The latest rumblings in the Yukos affair this week have raised more questions about OPEC's ability to control oil prices and further strengthened a widely-held view that a US$50 barrel might not be too far in the future.
OPEC, which has in the past been known to keep a tighter ship, has recently issued a string of contradictory statements which question its ability to react to the current ructions.
Its president Purnomo Yusgiantoro began by putting the wind up traders by declaring the current rates "mad" and adding that even Saudi Arabia, fittest of all OPEC's members, could not increase production in the immediate future.
Prices surged as experts interpreted the declaration as a sign there was no margin for safety available should a country default, an eventuality that gains extra significance in the context of Iraq, Nigeria, Venezuela and Russia, where oil giant Yukos staggers from one setback to the next.
Yusgiantoro attempted to make amends by saying shortly afterwards that OPEC did in fact have spare production capacity of up to 1.5 million barrels per day, before adding that whatever happened, no decision would be taken before the organisation's next meeting in mid-September.
The inconsistency must also be seen in the light of a clear error in evaluation in April which resulted in OPEC reducing its production ceiling by 1 million barrels a day, even though the price of oil was already above US$30 a barrel.
It also led analysts and consumers to doubt OPEC's determination to genuinely stabilise the market. Since then the cartel has performed a U-turn, raising its quota several times.
These difficulties, compounded by the increasingly tenuous state of Yukos and the concerns swirling round a referendum in Venezuela that could lead to a change of regime, sent oil prices spiralling upwards.
On Friday they were hovering around the US$41.5 per barrel mark in London and were at an historic peak of US$44.77 in New York.
Analysts said there was little sign of any real let-up for several months given the patent imbalance between supply and demand.
Indeed, demand looks set to grow sharply in the months ahead (an increase of 3.2 percent to 81.4 million barrels a day), nudged on by the recovery of the world economy and by rapid growth in India and China. Supply, on the other hand, already virtually at a standstill, will almost certainly not keep up.
Experts rule out another major oil crisis, even though many now accept that the US$50 a barrel price is on the cards.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source