Chika Amanze-Nwachuku With Agency
31 October 2007
Lagos — Crude Oil prices dropped to $92 a barrel yesterday, after rising as high as $93.80 a barrel on Monday, on a growing perception that the partial disruption in Mexico 's oil output is only temporary.
Also yesterday, the Organisation of Petroleum Exporting Countries (OPEC) stated that it has no power over many of the factors buffeting oil markets even as it expressed concern over the record high prices that are threatening the world economy and future demand growth.
Light, sweet crude for December delivery fell $1.53 to $92 a barrel on the New York Mercantile Exchange. The contract settled at a record $93.53 a barrel Monday, after rising as high as $93.80, a new trading record.
Monday's price surge was largely driven by news that Mexico 's Petroleos Mexicanos, or Pemex, was to temporarily halt as much as 600,000 barrels of daily crude production, or one-fifth of its output, due to stormy weather. But concern over the disruption of supply from Mexico was easing, analysts said.
But OPEC ministers have said they are to blame or the rising crude prices, insisting that the market is well supplied.
"Please don't blame us for $93 oil,' Qatari Oil Minister Abdullah Al Attiyah was quoted as saying.
However, the OPEC President, Mohammed bin Dhaen Al Hamli has reiterated that OPEC would always step in to meet supply shortfalls, but a 34 percent surge in the oil price since mid-August was driven by a flood of speculative investment and international political tensions.
"The market is increasingly driven by forces beyond OPEC's control, by geopolitical events and the growing influence of financial investors. We are of course concerned about high oil prices.'
'We will do what we can, mainly responding to changing demand fundamentals", said Hamli, who is also United Arab Emirate oil minister.
OPEC oil ministers will meet for informal talks as OPEC heads of state gather in Riyadh in mid-November. They have however ruled out any policy decision at those talks.
The organization had in September agreed to add 500,000 barrels per day of oil from November 1. The 10 OPEC members subject to output restraint-all except Iraq and Angola -will aim to ship 27.253 million bpd of oil onto the 86 million bpd global market from Nov. 1. If Iraq and Angola 's production are added in, OPEC will be pumping nearer 31 million bpd. But consumer nations, including top energy user the United States , are calling for more.
"If oil is going up and keeping at this level it may hurt the economy, especially non-oil producing developing countries", said Nobuo Tanaka, executive director of the International Energy Agency that advises industrialised consumer nations.
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