The opening address to the 162nd Meeting of the OPEC Conference, by HE Abdul-Kareem Luaibi Bahedh, Minister of Oil of Iraq and President of the Conference:
Excellencies, ladies and gentlemen,
Welcome to Vienna for the 162nd Meeting of the OPEC Conference.
I should like to extend a special welcome to His Excellency Dr Abdel Bari Ali Al-Arousi, the Minister of Oil and Gas of Libya, who is attending the Conference for the first time as Head of his Country's Delegation. Let me also thank his predecessor, His Excellency Eng Abdurahman Benyezza, for his contributions to the Conference during his time in office.
As we approach the end of the year, we are faced with a period of continuing uncertainty about the oil market outlook. To a great extent, this reflects the lack of a clear vision on the economic front. The global economy has experienced a persistent deceleration since the beginning of the year. The combination of an austerity-driven Euro-zone, the weakening recovery in Japan and clear signs of a slowdown in major emerging economies has provided the main factors behind this development. In the light of this, world oil demand growth forecasts for this year have been revised down frequently. At the same time, non-OPEC supply and OPEC natural gas liquid output have continued to perform well, outpacing demand growth. This trend is not expected to change in the coming year, with the market continuing to see high volumes of crude supply and increasing production capacity.
Turning to oil prices, while these have strengthened in the six months since the Conference last met, there have been continuing fluctuations. In June, at around the time of the Conference, prices were at their lowest daily levels for the year, with the Reference Basket price below US $100 a barrel throughout the month. It even fell below $90/b for three days. However, the Basket price then rallied strongly past $110/b in the middle of August. But after that, for most of the time since mid-September, it has been several dollars a barrel beneath this mark. This drop has reflected mounting concern about the global economic slowdown, the pessimistic future demand outlook and significant stockbuilds of crude in the United States of America. Such downward pressures have outweighed supply concern arising from geopolitical factors.
For its part, OPEC continues to do what it can to achieve and maintain a stable oil market. A key aspect of this is to ensure that the market remains well supplied with crude at all times, with fair and reasonable prices. For this to happen, there must be clear planning for the future, with sound investment strategies ensuring the necessary levels of production capacity in the years ahead. But the drawing-up of such strategies is impeded by uncertainties on both the demand and the supply fronts, as well as by high levels of price volatility. Clearly there are many doubts about the market outlook today. Without market stability – that is, sustainable market stability – all parties will suffer, producers and consumers alike.
At today's meeting, therefore, we shall be examining the market outlook for next year and further into the future. Our focus will be on enhancing market stability in the interests of all parties, as well as in support of steady world economic growth. However, this is not the responsibility of OPEC alone. If we all wish to benefit from a more orderly oil market, then we should all be prepared to contribute to it. This includes consumers, non-OPEC producers, oil companies and investors, in the true spirit of dialogue and cooperation.
