Commodity Corner

Views on commodities and energy

There’s room at the OPEC inn, but only for a price

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One of the many traditions of the Organization of the Petroleum Exporting Countries is that the holder of the group’s rotating presidency should host one of the group’s policy-setting meetings, typically the last of the year.
While regular conferences at OPEC’s Vienna home are a relatively straightforward affair, taking the group offsite has a tendency to generate major logistical challenges.
Last year, the highest hurdle for journalists attending an Algerian-hosted meeting in Oran was getting a visa to travel there.
This year, a big theme of the Angolan conference taking place on Tuesday in Luanda has been where to stay in a capital of scarce and exorbitantly-priced hotels.
Some of the journalists have resorted to sharing rooms in guest houses, far from the action, meaning a long crawl through the city’s traffic jams before they can get any access to the story they have already flown thousands of miles to cover.
The ministers meanwhile are staying in Luanda’s most opulent and very newest hotel, the Hotel de Convencoes de Talatona, where the biggest concern is that the paint is not yet dry.
It was inaugurated on Friday, just in time to accommodate the ministers in return for some serious petrodollars. Prices range from $600 for a standard single room to $5,000 a night for the presidential suite or $3,500 for one of the hotel’s luxury villas. Across the road, many Angolans live in shacks they have built themselves.

Running after oil in Ramadan

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naimiThe Muslim holy month of Ramadan has disrupted one of the wackier tasks for OPEC reporters: running around Vienna’s beautiful inner ring road with Saudi Arabia’s Oil Minister Ali al-Naimi, who likes to keep himself and the press corp fit. He often uses the 45 minute walk-cum-jog to give media a background briefing of his view on the oil market as he and the bizarre group of security, aides and reporters trot past the city’s stunning palaces and bemused Viennese on their way to work (or home from a night’s revelling). (Photo: al-Naimi with journalists in Cairo, 28 Nov 2008/Amr Dalsh)

The daylight fast for Muslim delegates and ministers means that most meetings are taking place late at night, making an early morning run less practical. Naimi ran on Tuesday afternoon, accompanied only by security. He didn’t go at all on Wednesday morning, much to the chagrin of the reporters on the early shift. The run is sometimes the only chance for media to get Naimi’s insight. It is a blessing and a curse for reporters on the beat, who have to be up at the crack of dawn to take part but are often rewarded with the biggest oil story of the day. Maybe Naimi figures this time there’s no need for a background briefing. With the oil price where it is, he seems relaxed enough to put it all on the record.

Inside the OPEC bunker

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Reuters energy correspondents covering the Vienna OPEC meeting will be sharing their insights and taking you behind the scenes of the Reuters operation with this live blog.

Inside the OPEC bunker

OPEC puts its best face forward

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The headline that emerged from nearly five hours of weekend talks by the producers’ club OPEC was that it that had decided to leave its output policy unchanged. But you shouldn’t believe everything you read in the press.
OPEC http://www.opec.org/home/cited the fragile state of the world economy and said it was doing its bit to try to nurse the economy back to health by avoiding any aggressive cuts in oil supply.
As far as the wider world could tell, the group, which supplies more than a third of the world’s oil, was united in its concern for its hard-pressed customers, especially the biggest one of all, the United States whose new leader is far more palatable as far as OPEC is concerned than his predecessor.
In reality, the closed-door debate inside OPEC’s scruffy Vienna secretariat on the banks of the Danube Canal, which feeds into the more romantic Danube River, was rather more heated than we were led to believe.
Languishing oil prices and ballooning oil stocks are more worrying for some members of OPEC than others and those most concerned about balancing their books were said to be holding out for radical action to try to drive up the oil market.
Delegates circulating in the lobbies of Vienna’s elegant hotels whispered that far from a straightforward consensus, some members had battled for a supply reduction of anything up to 1.5 million barrels per day.
Kuwait, whose government offered to resign en masse on Monday, and Iran, which faces expensive presidential elections in June, were among those keenest to prop up prices that have fallen by more than $100 from last year’s record high, the delegates said.
But intent on presenting a unified front, ministers chose not to tell the line of reporters waiting outside the meeting about any internal divisions.
The version for the media’s eyes and ears was that a new administration in the world’s biggest energy consumer made it so much easier to bury old enmities and agree with U.S. ally and leading oil exporter Saudi Arabia that for now the best output policy is one that doesn’t send oil prices soaring.