OPEC to discuss use of euro in oil trading: Report
Thursday, December 11 2003 - 05:51 AM WIB
"Some member countries are considering that," Purnomo said, in an interview with Dow Jones Newswires.
His comments follow remarks by former OPEC Secretary-General Alvaro Silva on Wednesday that "there is talk of trading in euros - it is one of the alternatives."
Purnomo is also the interim secretary ?general of the oil cartel.
At OPEC's December 4 meeting, OPEC ministers expressed concern that the sharp decline in the value of the dollar in recent months was seriously eroding their purchasing power.
Purnomo, who is due to take over OPEC's rotating presidency in January, wouldn't comment further on how the use of the euro in oil trading might be achieved.
He also declined to say whether OPEC will cut output at its February talks, as several OPEC ministers have suggested will be needed given the expected second-quarter decline in oil demand and rising non-OPEC oil supplies.
It was too early to say anything about output policy decisions due in February, Purnomo said.
"We (Indonesia) are selling much oil (priced) in dollars to Asia, including Japan" Purnomo said, in an apparent hint that use by Indonesia of the euro in the oil trade was not high on his agenda.
But some member countries selling much of their oil to countries that used the euro are considering the future use of the euro, he added.
Asked if OPEC will put the issue on its Feb. agenda he said: "there's no such agenda at this moment, but everything is possible."
On the oil supply side, Purnomo reiterated that factors such as the political situation in Iraq and efforts by Iraq and Russia to boost oil output will be an element in the group's output strategy discussions.
"Iraq will be producing more than 2 million barrels (per day) of oil in early 2004," Purnomo said. But political unrest could hamper Iraq from achieving its production targets, he added.
According to the International Energy Agency latest monthly report, Iraq produced an average 1.9 million b/d of oil in November, up 320,000 b/d from October.
"Based on our recent study, Russia is soon increasing (its) oil production from 7 million b/d to 8 million b/d, and (is) exporting more than 5 million b/d of oil," he said.
Purnomo said he had no plans to meet Russian oil officials ahead on the Feb. 10 OPEC session.
On the demand side, "global oil demand usually drops in the second quarter" following the steady first quarter demand season particularly for heating oil in the Northern Hemisphere.
But, "we need to carefully look at how much oil demand drops in the Q2 next year," Purnomo said.
Commenting on the continued firmness in OPEC's reference basket price of seven crude oils, Purnomo said the recent $28-29/bbl range of the basket is "not too high," taking consideration of the recent depreciation of the dollar.
Tuesday, the OPEC basket averaged $29.73/bbl, compared with $29.47/bbl Monday. This is the sixth consecutive working day the price has been above the group's preferred target range of $22-$28/bbl. (*)