London,19Feb2001
It said that while OPEC in theory maintains a $22-28/bbl price band for its basket of crudes, some member countries favor keeping prices towards the upper end of this range. "There are worrying indications that OPEC hawks might see a drop in the price of the basket below $25/bbl as a signal for further cuts," the CGES said. The OPEC basket fell to $24.90/bbl Friday, the OPEC news agency reported Monday. The Center noted that both the International Energy Agency and the US energy department's Energy Information Administration had lowered their estimates for oil demand in 2001.
However, "unless demand collapses, the market looks set to remain tight in 2001," noting that total crude and product stocks in the Atlantic Basin at end-January were at their lowest levels in more than 10 years. "Prices need to weaken in the short term to stimulate the rebuilding of product stocks over the summer," the CGES said. "A further OPEC output cut in March is inappropriate." The CGES said that like last year, low stocks, particularly of gasoline, were set to keep oil prices "extremely volatile" during 2001. "Even with the current level of OPEC output maintained for the rest of the year and a resumption of Iraq's exports, the global stockbuild in 2001 would be little more than a meager 50,000 b/d, insufficient to maintain the already low level of stockcover as demand rises," it said.
