OPEC's Moves Shrouded in Mystery

VIENNA -- A abundant advancing affair of the Organization of Petroleum Exporting Countries got beneath way Wednesday morning, but the most recent animadversion by assorted oil ministers bootless to allay the abstruseness surrounding the group's abutting move.

At issue is whether OPEC will officially raise its oil-output quota, and if it does, by how much. Usually, a consensus is achieved before the meeting begins and is signaled to oil markets.
The behind-the-scenes discussions leading up to Wednesday's meeting, however, have been marked by an exceptional level of uncertainty, underscoring the challenges confronting the group as it considers opposing economic forces and their influence on oil prices.
The lack of a clear direction has deepened the traditional divisions between the members of OPEC, which supplies about a third of the world's crude oil.
In an unusual move, Saudi Arabia's Oil Minister Ali Naimi declined to take questions from reporters as he entered OPEC's headquarters.
"Don't waste your time, go talk to someone else," Mr. Naimi told reporters at a morning briefing. Mr. Naimi typically uses the morning briefing to give his perspective on oil-market dynamics.
But on Wednesday Mr. Naimi said the decision will be revealed at a press conference, following the meeting, slated for 4 p.m. CET. He also complained of a sore throat. Mr. Naimi has offered no public comment in recent days, which is unusual in the lead-up period to an OPEC meeting.

The official OPEC meeting was underway as of lunchtime Wednesday. Omran Abukraa, who is expected to represent Libya at the meeting, was a no-show at the start. Libya's representative, however, was en route at midday, according to three people familiar with the matter. OPEC doesn't plan to take a final decision without Libya's presence, these people said.
A ministerial panel on Tuesday formulated recommendations for an output increase of one million to 1.5 million barrels a day, although it's unclear whether the suggestion applies to the quota or actual production. The 11 OPEC nations bound by the quota—Iraq is exempted—are estimated to already be pumping 1.5 million barrels a day above the allotments totalling about 24.85 million barrels a day.
A Gulf delegate said Mr. Naimi met with OPEC ministers from Algeria, Ecuador, Iran and Venezuela—all of whom have opposed a production increase—for about 15 minutes before the OPEC meeting began Wednesday morning. Mr. Naimi spoke "to convince them to agree on an output increase," said the Gulf delegate.
If Saudi Arabia, the world's biggest oil exporter, and other Gulf states prevail in their efforts to push for a boost, it would be the first such increase since 2007. Gulf delegates point to OPEC's own projections, which show that demand for the group's crude will rise in the second half of 2011.
But other ministers have said oil supplies are sufficient and that they are content with oil prices which currently trade at about $100 a barrel in the U.S. and $115 a barrel in Europe.

A access of black bread-and-butter data, decidedly out of the U.S., is calling into catechism the accompaniment of the world's bread-and-butter accretion and, thus, all-around oil demand. Worries about China's adeptness to abound in the face of that government's credit-tightening measures are additionally acceptable added arresting amid analysts as able-bodied as OPEC members.

By SUMMER SAID, BENOIT FAUCON and ANNA RAFF
—Hassan Hafidh and James Herron contributed to this story.
Write to Summer Said at summer.said@dowjones.com, Benoit Faucon at benoit.faucon@dowjones.com and Anna Raff at anna.raff@dowjones.com

Tags: pec, dtu, nsit

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