OPEC president says oil cuts supporting price
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Cherry [2011-05-20]
VIENNA - OPEC's Angolan president said on Sunday the group's existing supply curbs had brought some stability to the market, although prices remained too low to encourage investment in new supplies.
The Organization of the Petroleum Exporting Countries decided earlier on Sunday to leave formal output targets unchanged and step up adherence to previously agreed oil output cuts. The group meets again on May 28.
"There has been a certain stability. The price of oil has been fluctuating between $40 and $50 per barrel and that is a sign that OPEC's decision is being implemented," Jose Botelho de Vasconcelos told Reuters in Vienna.
"The current trend has not shown us a significant rise in prices and that is a sign that the market, due to the ongoing (economic) crisis, has yet to respond."
"There are a series of factors that have stopped oil from reaching the expected levels like the financial and economic crisis, lack of demand for oil and an excess in stocks. These factors have a big influence on the price of oil," he added.
CRISIS
Oil has recovered to around $46 a barrel from a low of $32.40 a barrel reached in December. But the price is still over $100 below last year's record high as the global downturn erodes demand.
But the group, which pumps more than a third of the world's oil, has some way to go to deliver on its pledge to remove 4.2 million barrels per day (bpd) of oil from the market to boost prices.
"Because some of the members of OPEC have not yet completely complied with the cuts, although 80 percent have been made, the group decided to take this decision," said Vasconcelos, who is also Angola's oil minister.
"Their compliance has produced some results," he said, adding that oil prices remained too low to encourage investment in new supplies.
Angola is one of the country's that still has work to do to meet its OPEC target. It has cut around 25 percent of the 240,000 barrels per day of the country's pledged reduction under OPEC's agreements, according to Reuters data.
"It is necessary that we find a balance between oil prices and the ability for the world economy to function," he said. "We need to find a price that will enable oil-related activities to develop without any disruptions."
"It is necessary that we find a price that will enable more oil to be discovered so that the world economy can continue to expand."