OPEC decided to keep pumping almost as much as it can, but the move may have little impact on soaring oil prices and didn't ease concerns that the global economy could be damaged.
The agreement by 11 oil-rich nations on Thursday to keep crude production steady came despite lobbying by Venezuelan President Hugo Chavez for a production cut.
Leading oil company executives doubted the decision would prompt prices to fall.
OPEC's decision, in the end, will do little to ease concerns on prices driven by "violence in Nigeria and Iran's nuclear ambitions" said Fumiaki Watari, the president of Nippon Oil, Japan's largest oil company.
But the Organization of Petroleum Exporting Countries doesn't factor the implications of such conflicts into its decisions about worldwide oil supplies, OPEC President Edmund Daukoru told reporters on Thursday after the group made the decision.
"We don't model Armageddon," Daukoru said.
The group, which produces more than a third of the world's oil, instead tries "not to get drawn into this kind of situation."
Daukoru added that current oil market conditions suggested there was no need for OPEC to meet again before its scheduled Sept. 11 meeting in Vienna this year. He said tightness the market is currently experiencing, "may well continue into next year."
"Stock levels are on the high side, gasoline stocks are on the low side, and the market looks as though it's balanced," said Daukoru, who is also Nigeria's oil minister.
Several OPEC ministers voiced concerns about rising global inventories and suggested that the cartel's 28-million-barrel daily quota might need to be trimmed later in the year if demand weakens.
In an official statement, OPEC said it maintains a "readiness to act swiftly ... to safeguard the interests of member countries."
Yet for the time being OPEC put aside these longer-term issues to focus on a more immediate problem: US$70-a-barrel oil.
While high oil prices mean big profits for oil producers in the near term, the longer-term risk is that they could cause a drop-off in economic growth and spur the development of alternative energy sources.
But Qatari Oil Minister Abdullah al-Attiyah made clear that "at this price level, OPEC won't cut production."
Most OPEC members "don't want to send any signals to the market that there's a floor at US$70," said Yasser Elguindi, senior managing director at Medley Global Advisors.
The cartel could face a more difficult decision in the second half of the year if inventories continue to build and global economic growth slows, said Michael Lynch, president of Massachusetts-based Strategic Energy and Economic Research.
"That can really accelerate weakening prices," he said.
In an apparent attempt to head off this possibility, Venezuelan President Hugo Chavez, a longtime price hawk, suggested trimming production now and repeated calls for OPEC to establish a minimum price of US$50 a barrel.
Chavez said an appropriate upper-end for prices would be "infinity."
Nigerian petroleum minister Edmund Daukoru said Chavez's idea was not formally proposed to OPEC, so it wasn't considered.
Daily global demand is expected to average nearly 85 million barrels per day this year, and the world's producers are believed to have less than 2 million barrels per day of excess production capacity that could be called upon in the event of a supply disruption.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary