OPEC, the oil producers' group that pumps about 40 percent of the world's crude, risks oversupplying the market if it decides to hike output at a policy meeting this week, analysts said.
But leaving output quotas unchanged could send oil prices to fresh record highs and even above the psychological US$100-a-barrel mark for the first time, they said.
Member nations of OPEC will hold an official output meeting in Abu Dhabi on Wednesday, with uncertainty surrounding the outcome of their decision.
"With the economic problems hanging over the global economy now, OPEC is probably thinking that [oil] demand is more likely to go down than up in terms of current forecasts and they'll probably want to keep things steady" regarding output, said Simon Wardell, an oil expert for Global Insight, an independent analyst group.
Veronica Smart, an analyst at the Energy Information Centre consultancy, said that while OPEC would find it hard to justify doing nothing with production quotas should prices remain around US$90-a-barrel by the time of its meeting, the cartel was likely to keep output on hold.
"If OPEC did decide to increase production levels it probably wouldn't come into effect until January 1 or perhaps February 1 and it might be seen as a little bit too little too late," she said.
Such a decision would place extra oil onto the market towards the end of the northern hemisphere winter, when demand for heating fuel drops, and ahead of the second quarter when OPEC does not like to see a large build-up of inventories, Smart said.
"If OPEC decided to do nothing ... they probably would be some bullish [price] impact on the market," the analyst said. "You can argue that [no change to output] could be used to have a bull run to [US$]100."
World oil prices slumped last week on increasing speculation that OPEC may decide to hike crude output on Wednesday.
OPEC last decided to raise production in September when it agreed to provide an extra 500,000 barrels of crude a day to the market, which took effect on Nov. 1.
Although some OPEC ministers have expressed concern that expensive crude could also dampen demand for oil, they reject blame for the nearly triple-digit prices.
Instead the cartel argues they are the result of speculators being drawn to the market on geopolitical tensions, such as between crude-producer Iran and the US.
"There is a huge element of speculation in the market," Smart said. "However, the speculation is largely around supplies and if OPEC were producing perhaps slightly more, that would take some of the fear premium out of the market."
Saudi Oil Minister Ali Al-Nuaimi last Wednesday insisted the world oil market was well supplied and that high prices did not properly reflect the supply-demand situation.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
SECURITY RISK: If there is a conflict between China and Taiwan, ‘there would likely be significant consequences to global economic and security interests,’ it said China remains the top military and cyber threat to the US and continues to make progress on capabilities to seize Taiwan, a report by US intelligence agencies said on Tuesday. The report provides an overview of the “collective insights” of top US intelligence agencies about the security threats to the US posed by foreign nations and criminal organizations. In its Annual Threat Assessment, the agencies divided threats facing the US into two broad categories, “nonstate transnational criminals and terrorists” and “major state actors,” with China, Russia, Iran and North Korea named. Of those countries, “China presents the most comprehensive and robust military threat