OPEC to Step Up by New Members
Angola, Ecuador and Sudan announced yesterday the desire to join OPEC. New members are expected to widen the group’s share on global market by 3 percent. But this extension will hardly materially affect prices for crude.
The negotiations about extending OPEC’s influence worldwide by admitting new members have been underway for a few months already. In June, OPEC President Edmund Daukoru invited potential members to attend the 141st extraordinary summit of the organization. Apart from Sudan and Angola, the invitations were delivered to Ecuador, Mexico, Bolivia and Syria.
Yesterday, Angola, Sudan and Ecuador declared they made principal decisions to join OPEC.
According to own statistics, OPEC controls 33.5 percent of the global market of crude, producing roughly 27 million bbl a day (Iraq produces 2.4 million bbl in addition but it isn’t restricted by quotas). With Angola, Sudan and Ecuador, OPEC’s aggregate production will step up by 2.27 million bbl a day, i.e. by 8.4 percent, extending the global share to 36.3 percent.
Nowadays, however, not producers but rather consumers of crude determine the prices, the analysts speculate. The prices are going up on cold winter expectations and on 1-million bbl decline in the U.S. reserves, which was announced by the U.S. Department of Commerce. So the effect of OPEC’s extension will hardly be decisive.
All the Article in Russian as of Dec. 01, 2006