Thursday, June 01, 2006

Hugo Chavez Attempts To Cut OPEC Production

While blaming the world's problems on the US lifestyle and saying that United States was bankrupting the world of natural resources, President Chavez encouraged OPEC to cut production of oil and raise prices even more. At the same time, he challenged the United States and said they would be defeated if they invaded. Memories of Saddam Hussein?

CARACAS, Venezuela — Venezuelan President Hugo Chavez saluted Bolivia's move to nationalize its natural gas reserves and suggested Ecuador rejoin OPEC as he welcomed oil producers who were widely expected to vote on Thursday for leaving crude output unchanged.

Chavez called the OPEC meeting "very important" during a short speech to members late Wednesday, but did not press them to accept a production cut as he has suggested _ a move that others have largely ruled out for now.

Instead, he focused on efforts by Venezuela and his ally President Evo Morales of Bolivia, to squeeze more earnings from their oil and natural gas sectors to help the poor.

"Brothers of OPEC, you are arriving in Latin America at a historic moment when governments are rising up with dignity in the name of exploited peoples to recover the strategic management of their natural resources," Chavez said during the speech at a Caracas military base.

He praised Bolivia's recent move to take control of natural gas fields from multinational firms and said Morales "deserves all our support."

Chavez's strident remarks added political flair to a meeting that appeared to have few oil-related decisions left to be taken.

Qatar's oil minister, Abdullah al-Attiyah, said he did not believe output should be cut now. But he said OPEC will be watching the situation between now and its next meeting in September, and could then change course. "We will see," he said.

Venezuelan Oil Minister Rafael Ramirez said earlier that reducing output is justified because global markets are well supplied, adding that uncertainty over U.S. actions against Iran and the war in Iraq were prime causes of high oil prices.

Ramirez said OPEC should consider a cut but that "we don't want to introduce elements that are going to be contributing to instability."

While many members of the Organization of Petroleum Exporting Countries agree that geopolitical instability _ as well as refinery bottlenecks and investor speculation _ plays a major role in pushing energy costs higher, they do not want to risk exacerbating the situation by cutting output.

The political backlash would likely be considerable, and the move could backfire against OPEC if higher prices led to reduced demand, analysts say.

"There has been talk of a cut for months now, which typically tends to be pushed back to the next meeting, over and over again," said Antoine Halff, director of global energy at Fimat USA in New York.

"This meeting is more about Venezuelan politics than it is about OPEC policy," said Halff, noting Ecuador had echoed Chavez's suggestion and said it was now considering rejoining OPEC 14 years after it left.

"I hope Ecuador returns to OPEC. I hope Bolivia comes to OPEC," Chavez said. Of the two countries, Ecuador has larger crude reserves, while Bolivia produces natural gas.

While having more Latin members in OPEC would not significantly shift influence within OPEC away from the Middle East, it might still be seen as a victory for Chavez as an international statesman. Ramirez said he would also welcome Sudan into the group.

Meantime, OPEC members are divided on which direction they see oil prices heading.

The head of Libya's oil policy, Shokri Ghanim, said he expects that crude futures, now hovering above US$70 (euro54) a barrel, will rise.

But Iranian Oil Minister Kazem Vaziri Hamaneh said high levels of oil inventories could create downward pressure on prices and he hinted that he might support an output cut down the line.

Chavez said past Venezuelan governments that controlled the state oil company had planned to pull out of OPEC and focus only on boosting output _ to the detriment of prices.

Someone hand Pat Robertson a sniper's rifle...

12 Comments:

At 12:50 PM, Blogger Freedomnow said...

Chavez spends his time trying to provoke the US into saying something that he can use to justify further unjust accusations.

The US has grown wise and doesnt oblige him anymore...

 
At 2:53 PM, Blogger MissingLink said...

Unfortunately this little p^%$&k is taking Venezuela 100 years backwards.
It is so easy to destroy and so difficult to restore.

 
At 6:21 PM, Blogger Brooke said...

I just OPEC has at least enough sense to ignore him...

 
At 9:45 PM, Blogger beakerkin said...

Remember comodity basics there is an upper threshold to what OPEC can charge. They are approaching it now and the Saudis are painfully aware of what will happen if Oil prices go higher . Oil Shale and Oil Sands become viable at 75 dollars a barrel.

 
At 9:22 AM, Blogger Always On Watch said...

I got two guffaws out of this one...

Missing Link: Unfortunately this little p^%$&k is taking Venezuela 100 years backwards.

I can fill in that blank!

Crusader: Someone hand Pat Robertson a sniper's rifle...

Chavez is another megalomaniac, and he's here in our hemisphere. Nothing funny about that, especially considering some of those he admires--Castro and Ahmadihejad, to name two.

 
At 5:22 PM, Blogger MissingLink said...

At least Columbia looks like there is no way bach to the 'left'.

 
At 7:05 PM, Blogger Warren said...

I think that Chavez is trying out for Castro's position as ... whatever position it is that Castro has.

Most visible commie dimwit and dictator in the Western hemisphere?

 
At 12:21 PM, Blogger Elmer's Brother said...

Wouldn't he just be cutting his nose off to spite his face?

 
At 3:58 PM, Blogger American Crusader said...

I apologize for not taking the time to answer each comment. I will be posting on a limited basis until August.

 
At 7:56 PM, Blogger MissingLink said...

Crusader,
Take it easy.
We'll hang around.
That's what friends are for.

 
At 9:12 AM, Blogger Freedomnow said...

Here, Here, Link!!!

AC's fan club is loyal and we arent going to abandon ship.

Cheers AC, we're still here...

 
At 5:29 PM, Blogger MissingLink said...

According to the latest news the other mob continues fighting and my Somali news outlet is back on line.

 

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