OPEC should not cut 1-mil b/d if WTI above $60/bbl: Indonesia

Jakarta (Platts)--4Jan2006

Indonesia is of the view that OPEC should not cut production by 1-mil b/d
as suggested by Iran last week if benchmark West Texas Intermediate crude is
above $60/bbl, the country's OPEC governor Maizar Rahman said Wednesday.
     "If WTI remains at or above $60/bbl, OPEC should not cut its production
by 1-mil b/d," Maizar told reporters, adding that Indonesia will study market
conditions over the next 20 days to finalize its position at the OPEC meeting
in Vienna Jan 31. 
     OPEC would be happy for WTI values around $50/bbl and the OPEC basket
price around $45/bbl, Maizar said. "If WTI stands at $50/bbl, the ICP will be
around $47/bbl," the official said, suggesting that was a high enough price
for Indonesia. Maizar was referring to the average Indonesian Crude Price, the
official selling price for Indonesian crudes.
     Iranian oil minister Kazem Vaziri-Hamaneh told Iranian newspaper Sharq
last week that OPEC should cut output by 1-mil b/d when ministers meet in
Vienna Jan 31 to avoid a sharp fall in prices in an oversupplied market. 
     "I think if a decision for about 1-mil bbl is made, it would be a good
volume given market fundamentals," Vaziri-Hamaneh said.
     The minister added that he expected the 10 OPEC members bound by quotas
to agree to a production cut at their next meeting in Vienna. Vaziri-Hamaneh
has previously said he believes the market is oversupplied by more than 20-mil
b/d.
     Front-month NYMEX WTI futures had weakened to around $58/bbl when
Vaziri-Hamaneh's comments were published. However, the contract has been on an
upswing since Dec 28, and closed at $63.14/bbl Tuesday. A return of funds to
the market with fresh capital on the first trading day of 2006, a steep
sell-off in the US dollar and uncertainty over Russian gas supplies to
European countries as a result of Moscow's spat with transit country Ukraine 
were the factors cited for a $2.10/bbl jump in WTI during the New York trading
session.

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