Opec was successful last year in maintaining market stability and keeping prices ...

Opec was successful last year in maintaining market stability and keeping prices within its preferred range of $22-28/b, according to the recently published 2002 Annual Statistical Bulletin (ASB). The report shows that the Opec Reference Basket price began the year at a low of $18.33 for January and then ended in December at a high of $28.39. The Reference Basket recorded a yearly average of $24.36, just shy of the middle point of the band. Since its adoption in 2000, the price of the Reference Basket has averaged $25.30/b, ‘an achievement largely attributable to Opec’s proactive production management’, states the report. However, this achievement has not come without some cost to the organisation’s Member Countries. In 2002 Opec cut its production ceiling by 1.5m b/d, which was on top of the 3.5m b/d in cuts made in 2001. These reductions were essential to bringing oil prices back to ‘fair and reasonable’ levels. Although prices did stabilise in the course of the year, Opec Member Countries still saw a 4% drop in petroleum export revenues, representing a decline of $8.5bn, compounding a substantial fall of $39.1bn for the year before, according to the ASB. Any drop in oil prices has an especially strong impact on the economies of Opec Member Countries, as the data assembled by the Secretariat shows oil revenues make up an average of 50% of total Opec export earnings, rising to more than 90% in some Member States. ‘As all sides have benefited from fair and stable prices, it would be unreasonable to expect Opec Members to continue to bear this heavy responsibility alone,’ Secretary General Dr Alvaro Silva-Calderón said in his foreword to the ASB. ‘For this reason, a growing need exists for enhanced cooperation from all producer nations - in terms of both coordination and restraint - to meet the ongoing challenge of market stability.’ The ASB figures show Opec’s share of total world proven crude oil reserves stands at 79.4%, up slightly from the year before. Opec Member Countries are also among the leading suppliers of natural gas, holding just under half of the world’s proven reserves. The publication said marketed production of natural gas increased to 420.1bn cu m from 411.6 the previous year. An abridged electronic version of the ABS, with information dating from 1982, is available free for downloading from the Opec website at www.opec.org