Oil prices fall again on news from OPEC
By Steven Mufson
By Steven Mufson
WASHINGTON — Crude oil prices continued their downward march yesterday as the Organization of Petroleum Exporting Countries left its production targets unchanged and as Europe's foreign policy chief raised hopes of a peaceful resolution to the standoff over Iran's nuclear program.
Signs of slower world economic growth and relatively high worldwide inventories of petroleum also helped knock the price of a barrel of crude oil to $65.61 on the New York Mercantile Exchange, down 64 cents yesterday and a slide of 17 percent from its all-time peak in July.
Oil markets are beset by "the perfect calm," said Edward Morse, a managing director and chief energy economist at Lehman Brothers Inc. He noted that anticipated hurricanes had not emerged, tightness in gasoline markets dissipated and political disruptions in supplies had not materialized.
Though prices are still very high by historical standards, the decline in the past month has eased some of the pressure on U.S. motorists. Prices at the pump fell for a fifth week, plunging 10.9 cents to a nationwide average of about $2.62 a gallon, the Energy Information Administration said yesterday. According to the government's weekly survey of about 800 filling stations, costs at the pump have declined 42 cents since Aug. 7.
Weakening oil prices were mixed news in Vienna, Austria, where OPEC oil ministers met yesterday and decided to leave their production target at 28 million barrels a day. The group often says that it fears high prices will drive consumers to alternative-energy sources or non-OPEC oil, and its president, Nigerian oil minister Edmund Maduabebe Daukoru, said yesterday that OPEC was pleased to see prices drop from their peak levels.
But the ministers talked mostly of "downside risks" to prices and asserted they might move to trim output later in the year if prices continued to slump.
"They like high prices, but they're relatively uncertain about the future because there's no way to be certain," Morse said. "They don't like the rate at which oil prices are falling. They are poised to jump in at some point ... if the price continues falling at the rate it's been falling."
OPEC's 11 members, who produce nearly 40 percent of the world's oil, have kept their combined oil production target unchanged since July 2005, a level they said was high enough to ease record prices. In a speech to the group, Daukoru tried to deflect blame for soaring summer prices away from OPEC, pointing instead to the war in Lebanon, market "speculators" and BP's Alaska pipeline problems.
Daukoru confirmed reports that the amount of Nigerian output curtailed by militant attacks on facilities has risen to 872,000 barrels a day, about 40 percent of the country's production capacity. The militants have attacked pipelines and an export terminal in the Niger Delta as well as boats carrying workers to offshore production platforms.
One key factor in the price drop over the past month has been the diminishing prospect of conflict over Iran's nuclear program. A U.N. deadline for Iranian action has passed without consequences, Germany's chancellor has publicly opposed military action, Iran's former president has urged talks and Javier Solana, the European Union foreign policy chief, described a meeting yesterday with Iran's top negotiator in the dispute over the country's nuclear program as "productive."