IEA reacts to OPEC decision

“The IEA estimates that today’s decision by the Organisation of Petroleum Exporting Countries appears to reflect the sentiments of the OPEC Riyadh Declaration,” said Nobuo Tanaka, Executive Director of the International Energy Agency (IEA), today in Paris, following the OPEC announcement to leave production levels unchanged. In the Riyadh declaration from 17-18 November 2007, OPEC leaders committed to achieving balanced energy markets and stable competitive petroleum prices.

“While the lack of a formal output increase by the OPEC 10 may do little to calm current market anxiety, the IEA recognizes that total OPEC output has been much higher (largely from Iraq and Angola) than implied by the September decision; and there are signs that more OPEC oil may be on its way in December,” Mr. Tanaka stressed. “Our concern is that there are uncertainties that surround the sustainability of some of that supply, and winter demand is as variable as the weather. The market is clearly uncomfortable that it has lost some stock cover in recent months and with prices near USD 90 per barrel oil it is telling producers it wants to see that flexibility restored.”