OPEC will not have needed data to make accurate move in Dec: EIA

Bethesda, Maryland (Platts)--1Dec2006

OPEC does not need to cut crude output again when it meets in Nigeria in
two weeks, US Energy Secretary Samuel Bodman said Friday, indicating he was
concerned about the impact of such a cut on heating oil supplies as the US
enters the winter season.

"Another cut is not needed at this time," Bodman told reporters on the
sidelines of an African energy forum.

Bodman indicated mid-December was not the right time for a production
cut, considering the US is on the verge of peak demand season for heating oil
and he fears a cut could crimp supplies of the fuel.

"It is something I worry about," he said.

Still, Bodman acknowledged that OPEC "by and large" has tried to keep
markets well-supplied recently.

OPEC meets December 14 in Abuja, Nigeria. At the cartel's last meeting in
Doha, Qatar, October 19-20, it decided to reduce its production by 1.2 million
b/d from November 1.

Energy Information Administration chief Guy Caruso, attending the same
conference, told reporters not enough time will have passed by December 14 for
OPEC to sufficiently judge the effectiveness of the November 1 cut.

"OPEC won't have the full impact of the cuts they made in November," he
said.

In particular, Caruso said the cartel will not have full information on
US inventories and demand and fears OPEC could make "inaccurate decisions
based on limited information."

Bodman, meanwhile, said he was unconcerned about Angola, and possibly
Ecuador and Sudan, joining OPEC.

Angola's cabinet has decided to apply for full membership to the cartel
after attending several recent meetings as an observer. And Ecuador, which
left OPEC in 1992, is looking to possibly rejoin the cartel in the wake of the
election last weekend of leftist Rafael Correa, a friend of Venezuelan leader
Hugo Chavez.

"It's their judgment and decision to make," Bodman said of the countries'
possibly joining OPEC. He noted he had "lots of things to worry about and this
is not one high on my list."

Bodman also answered "no" when asked if he would do anything to
discourage the countries from joining OPEC, though said they would be giving
up "certain rights and flexibility" by linking with the cartel.

The energy secretary also said any move by the Democrats to roll back tax
breaks to oil companies after they take control of Congress January 1 could
result in less investment in the US. "These are international companies and to
the extent taxes are changed here, you will see investment going away from
(the US)," he said.

Democrats have already said they will target the billions of dollars in
tax incentives given to oil companies in last year's energy bill.

--Gerald Karey, gerry_karey@platts.com

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