1 / 22

The Role of OPEC in Oil Market Stability presented by Mohammad Alipour-Jeddi

The Role of OPEC in Oil Market Stability presented by Mohammad Alipour-Jeddi Head, Petroleum Market Analysis Department Organization of Petroleum Exporting Countries Vienna Economic Forum 5 th November 2007 Vienna. Outline Understanding OPEC Review of the oil market

galvin-hatfield
Download Presentation

The Role of OPEC in Oil Market Stability presented by Mohammad Alipour-Jeddi

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Role of OPEC in Oil Market Stability presented by Mohammad Alipour-Jeddi Head, Petroleum Market Analysis Department Organization of Petroleum Exporting Countries Vienna Economic Forum 5th November 2007 Vienna

  2. Outline • Understanding OPEC • Review of the oil market • Historical developments • Recent developments • Prospects • OPEC capacity expansion • Concluding Remarks

  3. Understanding OPEC

  4. OPEC profile • Average GDP per capita: $2,200 • But there is a very wide range ($550-$45,960) • 95% of the 533 million people in OPEC live in a country where GDP per capita is no higher than $5,000 • This compares with OECD average GDP per capita of over $28,000 • Average life expectancy: 61 years • Oil Dependency of OPEC MCs Share of oil exports in total exports 68% (15%-95%) Share of oil exports in GDP 27% (5%-59%)

  5. OPEC objectives OPEC Statute (Article 2) “The principal aim of the Organization shall be the coordination and unification of the petroleum policies of Member Countries and the determination of the best means for safeguarding their interests, individually and collectively” “The Organization shall devise ways and means of ensuring the stabilisation of prices in international oil markets, with a view to eliminating harmful and unnecessary fluctuations” “Due regard shall be given at all times to the interests of the producing nations and to the necessity of securing: a steady income to the producing countries; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on their capital to those investing in the petroleum industry”

  6. OPEC’s role in a globalised and interconnected world • Engagement in dialogue with producers & consumersThe Conference • OPEC – EU • OPEC – IEA • OPEC – China • Active role & participation in international forums • IMF, World Bank, IRU,…

  7. Review of the oil market • Historical developments

  8. Continued increase in world oil demand, but structural shift in oil demand growth

  9. OPEC production: Maintaining market balance(mb/d)

  10. Supply security: Supply exceeding demand

  11. Review of the oil market • Recent developments

  12. Recent developments in crude oil prices ($US/b)

  13. OPEC Reference Basket value considerably lower in euros than in US dollars

  14. Factors behind upward shift in prices since 2004 • Surge in demand due to strong world GDP growth at 30-year high • Weak non-OPEC supply • Increasing OPEC production • Downstream bottlenecks • Geopolitical tensions and increased activity in futures markets magnifying price volatility

  15. Prospects • OPEC capacity expansion

  16. OPEC/non-OPEC share in oil reserves and production (%)

  17. OPEC production capacity plans by countrymb/d

  18. OPEC production capacity plansincluding NGLs

  19. OPEC refining expansion planstb/d

  20. Concluding remarks • OPEC reserve base is sufficient to meet projected world oil demand (oil: 77%, natural gas: 49% of total world reserves) • OPEC Members are undertaking investments to expand supply capacity (more than 5 mb/d by 2012) to meet the expected increase in world oil demand and provide an adequate cushion of supply • Additional efforts are also being made to address tightness in downstream • Recent Ministerial decision to increase OPEC production by 0.5 mb/d is a clear demonstration of the Organization’s concern about the continued health of the world economy as well as its ongoing commitment to ensure adequate supplies, especially ahead of the high-demand winter season

  21. Concluding remarks • Security of demand is vital to ensuring that the appropriate level of investments are made in OPEC Member Countries to minimise the risks associated with under- and over-investment • Consumers governments should consider minimising policy-induced uncertainties on oil demand • OPEC attaches great importance to the need for deepening and widening the dialogue between producers and consumers for the benefit of both • The Third Summit of Heads of State and Government of OPEC Member Countries, to be held in Saudi Arabia in November 15-16, will provide long-term guidance to enhance OPEC’s stabilising role in the market and ensure adequate supplies to meet energy needs for sustainable development

  22. www.opec.org Thank you

More Related