Tuesday, March 11, 2003 :::
Arabian assurances that there will be "enough" oil:"We will make sure there is enough oil in the market," al-Naimi told reporters before a meeting of the cartel in Vienna. "There will be no shortage."...
Al-Naimi said fears over war was to blame for the sharp rise in oil prices, not a shortage of supply.
What does this mean, exactly? A fear that supply will be lower in the future? I'm not sure why the cause of the shortage is relevant to OPEC's decision here, unless they think it will be so temporary that any action will outlast its cause.If OPEC is serious when it says it wants to keep oil prices stable rather than simply as high as possible, rather than just setting quotas at each meeting it should work out a whole schedule of quotas that increase with, say, a moving average of the daily close of the contract for delivery in the month after front-month (how long does it take for oil supplies to work their way to delivery?), actually presenting a God-fearing supply curve to the market rather than waiting until the next meeting to figure out how to tinker by hand with the quantity supplied.
::: posted by dWj at 11:46 AM
