OPEC is "comfortable" with current oil prices and does not want to "rock the boat" as the world recovers from its worst recession in decades, the group's secretary general said Tuesday, while acknowledging that the group faces abundant challenge in a rapidly changing market.
The assurance by Abdalla El-Badri reflects the sense of caution that the Organization of the Petroleum Exporting Countries as it looks to balance an oil market still feeling the effects of the global economic meltdown.
But they take on a new twist as the 12-nation group marked its 50th anniversary - offering signs that the producer bloc is weighing more factors than merely the spot price of crude, currently at around $77 per barrel. One such factor is the health of the broader global economy, which coud be hurt by sudden rises in oil prices.
"At this time, we see the world recovery is ... not really clear yet," El-Badri said at a news conference marking the birthday. "We don't want to see a double-dip recession which ... would affect, negatively, almost everybody."
El-Badri also told reporters that a change both in prices and quotas this year depends on "circumstances." But he declined to comment directly on what OPEC members would do at their meeting a month from now. The group has left its output quotas unchanged since December 2008.
His remarks were the latest indication that the group, which supplies about 35 percent of the world's crude oil, was clearly focused on more than just ways to maximize revenues from oil sales. It's a shift that, analysts say, points to OPEC's maturing since five nations decided on Sept. 14, 1960, to work together to protect and capitalize on their chief resource: oil.
For a group that was for years used to a market driven by supply and demand, the game has also changed. The use of oil futures as a financial instrument has undercut the old supply-demand mechanism, meaning that OPEC's ability to control prices through production has, at the very least, been affected in ways that weren't present a decade earlier.
As a result, members have called for greater regulation of the futures market to avert spikes such as oil's rally to nearly $150 per barrell in mid-2008 before prices collapsed to about $30 per barrel just months later.
"We have to watch out and we have to adapt to the changes," El-Badri said.
