Views on commodities and energy
Why did Angola join a club that would have it?
OPEC’s president Angola might well be asking himself why he is paying nearly 2 million euros to belong to the oil producers’ club when the World Bank has told the nation it would be better off without it.
The Angolan energy minister, who currently holds the group’s rotating presidency, has yet to arrive in Vienna for this Thursday’s meeting of the Organization of the Petroleum Exporting Countries, which is expected to keep existing output targets unchanged.
Member countries have already agreed to lower production by 4.2 million barrels per day since last September and have been delivering around 80 percent of the promised curbs.
Now the oil price has climbed back above $60 a barrel, almost double the lows of last December, members like Angola might well sigh with relief and pump even more above their OPEC output target than they are already doing.
Last week, the World Bank said Angola’s economy would perform far better this year if the country did not limit production, as OPEC has requested, and that wasn’t taking account of the OPEC membership fee, which is heard to be the same for all members, whether they are the smallest producer Ecuador or the biggest Saudi Arabia.
Oil ministers might have saved a night or two on hotel accommodation, however, as several were expected to arrive later than originally stated and also to disappear immediately after Thursday’s meeting.
Delegates predicted it would be short and to the point, provided Angola and others unhappy with output targets did not open a Pandora’s Box of a debate on production goals.
The controls are aimed at supporting oil prices as the market is already well-supplied, but some argue a better way to boost OPEC earnings would have been to call the meeting off.
It would not be good business for Vienna hotels or struggling airlines, but it would cut the expenses and carbon emissions of the OPEC delegations and the pursuing press pack, as one weary analyst observed.
“We are forced to mention that there is an OPEC meeting this Thursday in Vienna, although there is so little to expect out of it that OPEC could have made a gesture to save its and the media’s carbon footprint by calling it off,” said Olivier Jakob of Petromatrix.