OPEC SUMMIT
OPEC decides against reference to weak dollar
Friday, November 16, 2007
OPEC members agreed not to mention the weak dollar's impact on the world oil market in their closing statement so as not to exacerbate the currency's devaluation.
Friday, November 16, 2007
RIYADH, Nov 16 (Reuters) - OPEC will exclude any reference
to the weak dollar in its draft summit communique, voting down a
proposal by Venezuela and Iran to highlight the currency's
negative impact on producers' economies.
Saudi Arabia had objected to the bid on Friday, saying the
mere mention of the dollar could exacerbate its weakness.
"I am telling you, you will not see it in the final
declaration," OPEC's Secretary-General Abdullah al-Badri said
after a meeting of oil, finance and foreign ministers was
briefly broadcast live to journalists.
"Yes, we are concerned. But this is a discussion among
ourselves and this is not the first time we have discussed it,"
Badri said.
The dollar's drop against major currencies helped fuel oil's
rally to a record $98.62 last week. It has also reduced the
purchasing power of the Organization of the Petroleum Exporting
Countries.
But top oil exporter and summit host Saudi Arabia said the
dollar was an issue best left alone by OPEC.
"I think we should leave this matter to the competent
parties... and not include it in the communique's draft," said
Saudi Foreign Minister Saud al-Faisal.
"My fear is that any mention that OPEC makes of studying the
issue of the dollar, will in itself have an impact."
The draft document will be submitted to OPEC's heads of
state for approval at the weekend. Its central themes are the
environment, oil supply and energy's role in developing poor
countries, said Ecuador's Oil Minister Galo Chiriboga.
OPEC's second-biggest producer Iran has caused flutters in
financial markets by shifting much of the payment received for
its oil to non-U.S. currencies.
But other major producers have yet to follow Iran's move to
protect its export revenues by cutting exposure to the dollar.
Venezuela, however, is more worried about the impact on its
export revenues by a decline in the dollar than any economic
slowdown in the United States, its biggest crude customer.
"The Iranian and Venezuelan proposal is to raise attention
to the weakening of the U.S. dollar in the final communique,"
said Iran's Foreign Minister Manouchehr Mottaki.
But Riyadh, a U.S. ally, objected saying mentioning the
issue would only make matters worse.
The ministers also discussed whether they should instruct
OPEC's finance ministers to study ways to protect the purchasing
power of their economies given the dollar's fall to record lows.
"Just indicating that we have charged finance ministers with
studying this issue ... would mean a decision taken by OPEC
would have the opposite effect and the media would pick up on
this point," said the Saudi foreign minister.
"And then perhaps we would find that the dollar had
collapsed, instead of us having done something in the interest
of our countries."
to the weak dollar in its draft summit communique, voting down a
proposal by Venezuela and Iran to highlight the currency's
negative impact on producers' economies.
Saudi Arabia had objected to the bid on Friday, saying the
mere mention of the dollar could exacerbate its weakness.
"I am telling you, you will not see it in the final
declaration," OPEC's Secretary-General Abdullah al-Badri said
after a meeting of oil, finance and foreign ministers was
briefly broadcast live to journalists.
"Yes, we are concerned. But this is a discussion among
ourselves and this is not the first time we have discussed it,"
Badri said.
The dollar's drop against major currencies helped fuel oil's
rally to a record $98.62 last week. It has also reduced the
purchasing power of the Organization of the Petroleum Exporting
Countries.
But top oil exporter and summit host Saudi Arabia said the
dollar was an issue best left alone by OPEC.
"I think we should leave this matter to the competent
parties... and not include it in the communique's draft," said
Saudi Foreign Minister Saud al-Faisal.
"My fear is that any mention that OPEC makes of studying the
issue of the dollar, will in itself have an impact."
The draft document will be submitted to OPEC's heads of
state for approval at the weekend. Its central themes are the
environment, oil supply and energy's role in developing poor
countries, said Ecuador's Oil Minister Galo Chiriboga.
OPEC's second-biggest producer Iran has caused flutters in
financial markets by shifting much of the payment received for
its oil to non-U.S. currencies.
But other major producers have yet to follow Iran's move to
protect its export revenues by cutting exposure to the dollar.
Venezuela, however, is more worried about the impact on its
export revenues by a decline in the dollar than any economic
slowdown in the United States, its biggest crude customer.
"The Iranian and Venezuelan proposal is to raise attention
to the weakening of the U.S. dollar in the final communique,"
said Iran's Foreign Minister Manouchehr Mottaki.
But Riyadh, a U.S. ally, objected saying mentioning the
issue would only make matters worse.
The ministers also discussed whether they should instruct
OPEC's finance ministers to study ways to protect the purchasing
power of their economies given the dollar's fall to record lows.
"Just indicating that we have charged finance ministers with
studying this issue ... would mean a decision taken by OPEC
would have the opposite effect and the media would pick up on
this point," said the Saudi foreign minister.
"And then perhaps we would find that the dollar had
collapsed, instead of us having done something in the interest
of our countries."
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