WASHINGTON, September 16 /PRNewswire/ --
At their September 8-10 meeting in Vienna, OPEC Ministers agreed to abide by their September 2007 production allocations (including new members Angola and Ecuador and excluding Indonesia and Iraq) totaling 28.8 million barrels per day (bpd) cutting production anywhere from 500,000 to 800,000 bpd.
The Abraham Energy Report (AbrahamEnergyReport.com) and its' Editor and Publisher, former U.S. Energy Secretary Spencer Abraham, advises the newsletter's monthly subscribers that the production decline may not be as definitive as the OPEC meeting's communique implies.
"Based on the comments of several Ministers before, during, and after the meeting, we think there may be considerable flexibility in actual production in the coming months to take care of unforeseen circumstances," the Report explains in an analysis posted on its web site AbrahamEnergyReport.com.
"This decision essentially gives OPEC and the market a bit more time to sort out the possible effects of the extreme volatility we have witnessed in oil prices on global economic activity and oil demand. It also gives the market more time to respond to seasonal demand and inventory patterns that are likely to be affected by Hurricanes Gustav and Ike, post-Olympic Chinese consumption and purchasing patterns, the response of the market to the recent decline in prices, and the approaching winter.
"With the majority of the OPEC Members' oil revenue targets being more than satisfied, and with OPEC spare oil production capacity set to rise in the next few quarters, OPEC now has considerable flexibility. They have plenty of room to adjust actual production to meet the seasonal and cyclical swings in global demand that we are likely to see in the period immediately ahead without having to resort to changes in the so-called informal production targets. Saudi Arabia, in particular, now appears to be more willing and able to take on the role of swing producer within OPEC than it has been for some time.
"Just as OPEC chose instead to allow actual production by Saudi Arabia and a few others to creep up above target levels to meet demands and calm overheated markets this summer, we think it is now just as likely that OPEC will allow production to fluctuate with market demands without regard to target levels this autumn.
"OPEC once again reiterated its pledge to keep markets adequately supplied, which is reassuring in a general sense because of the fog of uncertainty hanging over the market created by the deteriorating economic outlook, the Russian invasion of Georgia, and the heating up of the Atlantic Basin hurricane season."
The Abraham Energy Report's entire OPEC meeting analysis by Contributing Editor John Brodman is available on its web site at AbrahamEnergyReport.com
About the Abraham Energy Report
The Abraham Energy Report is a new subscription-based monthly newsletter which offers a unique blend of timely and exclusive insights into global energy markets coupled with sharp analysis of geopolitics and energy policy. The Report's publisher and editor is former U.S. Energy Secretary Spencer Abraham who currently serves as chairman and CEO of The Abraham Group LLC in Washington, D.C.
Web site: http://www.AbrahamEnergyReport.com
Joe McMonigle of the Abraham Energy Report, +1-202-393-4673
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