ABU DHABI, Dec 6 (Reuters) - OPEC oil ministers are resting easy with oil around $86 a barrel, satisfied they have met consumers’ fuel requirements and benefiting from a near record price they have no power over, officials said on Thursday.
While voicing concern over a surge in prices to almost $100 last month, the Organization of the Petroleum Exporting Countries, at a meeting on Wednesday, rebuffed consumer calls to pump more crude.
“We’re concerned about the price, but we’re not losing sleep over it,” said an OPEC insider.
“There was a time when we thought $60, $70 a barrel was too high. But now we can’t control the price. What we can do is what we’re good at — keeping the market well supplied.”
The group, which pumps about 40 percent of the world’s oil, decided to keep output steady despite calls from the United States and other consumers to boost production. OPEC meets again on Feb. 1 in Vienna.
Oil hit a record high of $99.29 late last month, driven by an influx of fund money and a weak U.S. dollar. It has since fallen about $13, partly due to rising inventories of oil products in top consumer the United States.
OPEC has sought to avoid letting prices rise too high to avoid destroying demand.
But ministers, in saying their sway over prices has been lost, recalled what happened after they met in September and agreed to boost supplies by 500,000 barrels a day from November — only for prices to continue rising.
Algeria’s oil minister and incoming OPEC president, Chakib Khelil, told Reuters that record high prices were not an issue at Wednesday’s meeting because world demand was holding up.
“There was no discussion on that because we haven’t really seen demand destruction up to now — just like we haven’t seen an impact on economic growth,” he said.
While some in OPEC say they are worried by expensive oil, their governments are grateful for the record revenues they are bringing in.
“The ministers are happy with these high prices,” an OPEC delegate said, commenting on why the group did not raise output. “At the end of the day, it’s all about revenues.”
OPEC’s 12 members, all excluding Ecuador which rejoined in November, are expected to earn $658 billion in oil revenues this year, according to the U.S. Energy Information Administration.
Many of the producer countries are sinking their billions into social programmes, projects from roads to shopping malls and acquiring assets abroad.
And for consumer nations, costly oil might not be a major setback.
“It encourages them to develop alternatives and conserve,” said the OPEC delegate.
OPEC ministers believe the world has weathered higher prices. Some analysts say oil could resume its march towards $100 after the group’s decision and strain the economy.
“There’s been some suggestion of lower growth in the United States but that same trend has not been seen in Asia,” Nigerian Minister of State for Oil Odein Ajumogobia said on Wednesday
“So as one is going down the other is not affected, I don’t think it’s significant in terms of a slowdown.”
Analysts say the world is coping well with high prices because, adjusted for exchange rates and inflation, they are lower than during previous price spikes and some economies have become less energy intensive.
OPEC insists that it cannot control the price of oil given the growing role of factors beyond supply and demand.
“The market is controlled by speculators. They are considering oil as a financial asset,” said OPEC Secretary-General Abdullah al-Badri on Wednesday.
“Until this factor is out of the market, we will see this volatility day after day, and month after month.” (Editing by Anthony Barker)