OPEC has lost control of crude prices

OPEC has lost control of crude prices: ex-Algerian oil minister

London (Platts)--14May2004


As oil prices hit new all-time highs of more than $41/bbl Friday, a former
OPEC oil minister said the oil producers' cartel had lost credibility and,
therefore, its control of the market. "OPEC, for all practical purposes, has
lost control of the price. It has lost credibility and therefore it has lost
control of the price," Geneva-based consultant and former Algerian oil
minister Nordine Ait-Laoussine said. It was "disconcerting," he said, that
announcements from OPEC were having little impact on prices. "And that's
worrying," he said. Just a year ago, OPEC was congratulating itself on its
success in managing the market, saying that the introduction of its $22-28/bbl
target price band three years earlier had helped it to respond to changes in
world oil market conditions and to increase stability. In its May 2003 Monthly
Oil Market Report, the group's Vienna secretariat noted that the OPEC crude
basket had averaged $25.30/bbl since the band was introduced--"evidence of the
Organization's success in stabilizing the market."

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