Opec does not need to make any further output cuts to support oil prices. The reductions already made by Opec's 11 member countries (excluding Angola), combined with the arrival of cold weather across much of North America and slower than expected non-Opec output growth, has tightened oil market fundamentals and reduced inventories, according to the London-based Centre for Global Energy Studies (CGES).
In its latest monthly report ( February 19), the centre warns that, by cutting output before the winter has played out, Opec is running the risk of repeating the pattern of 2002 when it cut output just as the global economy started to recover from the impact of the 9/11 attack on the US. Over the past month, 200,000 barrels per day (bpd) have been taken out of production.
The CGES states: "The depletion of stocks that this led to, coupled with Opec's policy of preventing commercial inventories from rising, set the scene for the subsequent explosion in oil prices that accompanies the surge in oil demand growth in 2003and 2004. The slowdown in demand growth more recently is a directly result of this surge in prices." Continue to the full story from Source.
In its latest monthly report ( February 19), the centre warns that, by cutting output before the winter has played out, Opec is running the risk of repeating the pattern of 2002 when it cut output just as the global economy started to recover from the impact of the 9/11 attack on the US. Over the past month, 200,000 barrels per day (bpd) have been taken out of production.
The CGES states: "The depletion of stocks that this led to, coupled with Opec's policy of preventing commercial inventories from rising, set the scene for the subsequent explosion in oil prices that accompanies the surge in oil demand growth in 2003and 2004. The slowdown in demand growth more recently is a directly result of this surge in prices." Continue to the full story from Source.
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