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OPEC summit seeks to set critical oil production

06-14-2012 19:40 BJT

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Oil has fallen 24 percent since late February. And on Thursday, the world’s key oil cartel is meeting in Vienna to decide whether to cut production to reverse that decline. But as Jack Barton reports, members of the Organization of Petroleum Exporting Countries are divided on what to do next.

The Hapsburg Palace in Vienna, a suitably dramatic venue for this year’s OPEC summit, which seeks to set critical oil production and price ranges for the year to come.

A twenty-five percent plunge in oil prices is prompting Iran and Venezuela to push for a reduction in global supply. They also want OPEC countries to stick strictly to any new quota.

Thomas Bachheimer, oil trader, said, "Some OPEC member countries are selling more than they should according to the OPEC rules and they like to prevent this situation and I think OPEC will place some strong words to those overproduction countries".

But there is also some strong resistance here to the higher oil price drive by Tehran and Caracas.

Cornelia Meyer, independent energy consultant, said, "That’s mediated by countries such as the Kingdom of Saudi Arabia and other sort of more rational people say look basically we can’t really get prices up too high given the world state of affairs. Economies are in very dire straits. We need to make sure we fuel the economy for growth not stifles it".

Iraq wants to boost its production quota even higher. Then there’s the uncertainty of upcoming oil sanctions targeting Iran’s nuclear energy program, which the US and Europe believes is aimed at developing weapons. Amid all these uncertainties the expectation is that OPEC may just leave the current 30 billion barrels a day quota as it is.

Cornelia Meyer, independent energy consultant, said, "On one side we have the geo-political pressure from Iran pushing prices up but then we have what’s happening in the global economy in the Euro in the US and also now in China and India where we see a marginal slowing of growth, which has a downward pressure. So there’s really not that much of an urgency to do something. Wait and see might serve everybody best".

And it won’t just be supply and demand that ministers haggle over at a meeting that some observers expect could be extended until the end of the week.

The Libyan secretary general of OPEC Abdullah El-Badri is set to retire at the end of the year and there will be discussion here on who should replace him with Iran, Iraq, Saudi Arabia and Ecuador all vying for the top job.

Editor:Wang Chuhan |Source: CNTV.CN

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