07-06-06

OPEC's president admonished oil market speculators, warning them "not to take advantage" of geopolitics.
Edmund Daukoru, made his comments following a joint European Union and Organization of Petroleum Exporting Countries meeting in Brussels.

A combination of supply concerns in Nigeria and Iraq and Iran's nuclear standoff with the West continue to underpin oil futures. US oil futures were trading just under $ 72.00 a barrel, as fresh security concerns in Nigeria's Niger Delta prevented an anticipated major price fall.
Earlier, Daukoru, who is also Nigeria's oil minister, reiterated that the oil producing group is uncomfortable with current high oil prices.

The UAE's oil minister Mohamed Bin Dhaen Al Hamli, also spoke of his concern that high oil prices may start to have a negative impact on the global economy.
"We are concerned about the impact of prices on demand. We have already had revisions (for global demand forecasts this year). We don't know at what (oil price) level the global economy will begin to slow and inflation rise as a result of this."

Hamli, who takes over the rotating OPEC presidency after Nigeria in December, also said the oil producing group is concerned by rising oil stocks. Hamli said the UAE is dealing with extra oil stocks by selling them in the spot market. He said the country hasn't yet had to discount its oil in order to sell it.
"We are not discounting to sell any extra crude. We sell it to existing clients and they'll take it and put it in to storage and use it later," he said. Hamli's comments closely follow news that OPEC's de facto leader, Saudi Arabia, has been cutting back its crude volumes.

EU Energy Commissioner Andris Piebalgs told on the sidelines of the conference that relations between the EU and Russia on energy matters had improved since a gas row between Russia and Ukraine in January led to a reduction in gas shipments to Europe.
"Absolutely, absolutely, I think the environment has gotten much better between us. We're talking more. I'm in regular contact with my counterpart (Russian Industry and Energy Minister Viktor Khristenko), Piebalgs said.

Piebalgs pointed to some progress being made in convincing Russian energy giant Gazprom to sign onto the International Energy Charter, which would require Russia to open its gas pipelines to foreign energy companies. But Piebalgs didn't point to concrete evidence to support how Russia, which has been steadfast in its reluctance to sign onto the charter, was softening its position on the matter. Russia supplies about one-quarter of Europe's natural gas supply.
"The key point (in EU-Russian energy relations) is that European companies could do investments in Russia and have access to its pipelines. That changes the role of Gazprom, because then Gazprom is much more free to have access to the European energy market," he said.

On the progress the EU and Russia are making on the energy charter, Piebalgs said, "We are making progress, but we still have a ways to go."
Saudi Oil Minister Ali Naimi, said the country's output in April averaged 9.1 mm bpd, its lowest level since January 2005. Global oil prices have risen 10 % from a first-quarter average of $ 65/bbl to remain above $ 70/bbl since the kingdom's cut was implemented.

Naimi, speaking after OPEC's Caracas meeting, said the reduction was in response to a decline in demand, not an attempt to limit supply and keep prices at current high levels.
However, Daukoru when asked as to whether other OPEC ministers were following the same lead as Saudi Arabia on cutting back oil supplies said: "I can't tell you what other countries are doing, there is no collective opinion on Saudi Arabia."

OPEC and the EU held their third energy dialogue in Brussels and announced that they will hold a round table on energy policies also in Brussels, Nov. 24.