Gauging OPEC's oil pressure
OPEC ministers met today to consider pumping more oil to relieve high gas prices. Doug Krizner talks to Robin Pagnamenta of The Times of London about whether the weak U.S. dollar has been a major deciding factor.
Oil refinery (Getty Images)
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TEXT OF INTERVIEW
Doug Krizner: More than 40 percent of the world's oil comes through OPEC. The cartel's ministers met today in Abu Dhabi to consider pumping more. That would bring relief to economies stung by near-record prices. Indications are OPEC will keep production steady for now.
Let's bring in Robin Pagnamenta of the Times in London. Now Robin, given crude prices are down about 10 percent in the last two weeks, that drop has taken some pressure off of OPEC to raise production. But the dollar has been very weak, and how much of a factor was that in keeping production steady?
Robin Pagnamenta: Well, it's certainly an issue that was the subject of a lot of discussion at the OPEC heads of state summit meeting in Riyad last month. They were discussing whether or not oil should be priced in a basket of currencies other than than the dollar. You know, the weak dollar has undermined the value of earnings, so even though we've seen oil placed at $100 a barrel, some countries have been complaining that their revenues have not been sufficient. OPEC views oil prices a little bit like Goldilocks and the Three Bears -- they want prices to be high, but not so high as to encourage consumers to seek out alternatives.
Krizner: So early indications then seem to be that they will keep production targets unchanged. Now we look to the March meeting, is that right?
Pagnamenta: That's correct, yeah. I mean, it's possible that they might decide to lift production in March. The increase that they annoucned in September actually only came on stream in beginning of November, and there are also some other things going on within the oil market. For example, Angola and Iraq are also likely to increase production by at least 200,000 barrels a day. So there is going to be some natural increase in supplies going into the market, which may have an impact on prices.
Krizner: Robin Pagnamenta is business correspondent for the Times in London. Robin, thanks so much for speaking with us.
Pagnamenta: Thank you.
