Ecuador's Wilson Pastor-Morris, left, the president of OPEC, and Abdalla Salem el Badri, the Libyan secretary general of OPEC.
Ecuador's Wilson Pastor-Morris, left, the president of OPEC, and Abdalla Salem el Badri, the Libyan secretary general of OPEC.

Potential market volatility means uncertainty at OPEC



VIENNA // In the cold of the Austrian capital, the 12 OPEC ministers on Thursday made their sixth consecutive decision to stick with the production targets the organisation of oil exporters established nearly two years ago.

Braving the chill with them were the usual varied mob of camp followers – market analysts and media representatives – who spent that day in the basement of the new OPEC headquarters to hear the official pronouncement of what was widely held to be a foregone conclusion.

There was also a newcomer who has recently risen to prominence in the organisation that controls 40 per cent of the world's oil supply.

Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, the assistant minister of petroleum affairs for Saudi Arabia, was introduced on Thursday as the chairman of a committee to forge a long-term strategy for OPEC.

The organisation plans to unveil the main points of the plan on December 11 at an extraordinary meeting in Ecuador so details are hard to ascertain for the moment.

But it appears to have been prompted by continued – some would say increasing – long-term uncertainties about global energy markets.

The strategy framework is needed because "the producer is put in a harder environment for figuring out the uncertainties of supply, demand and energy mix and how to allocate investment", Prince Abdulaziz said.

"A grave uncertainty we have is what will be the future energy mix … it cannot happen that you can ask a producer to continue investing when he is so tied up with the trajectory of future demand."

OPEC's short-term decision to stay put on quotas, after a year in which oil prices have seldom strayed from the group's preferred range of between US$70 and $85, might glibly be viewed as the path of least resistance.

But the greying skies and the prick of autumn wind in Vienna add drama to Prince Abdulaziz's hints of deeper currents.

If the OPEC president, Wilson Pastor-Morris, is to be heeded, the decision on output targets reflects a delicate balance between hopes that global economic recovery will continue to support crude at its current level of about US$83 a barrel, and worries that oil-price volatility will reappear, sinking industry plans to pump money into energy development.

Mr Pastor-Morris, who is also the Ecuadorean minister of non-renewable natural resources, said: "With so much uncertainty about the world economic outlook as we head into winter in the northern hemisphere, all parties in the industry must redouble their efforts to counter future price volatility.

"Indeed, for oil producers assessing the oil market outlook, the attention is now more on the rate, the size and the global spread of economic recovery than on the usual seasonal factors for this time of the year."

OPEC has hailed its action in late 2008 as one of its biggest successes. The group cut its aggregate output target by a record 4.2 million barrels a day as crude tumbled from its peak in July of more than $147 a barrel to less than $34 in December.

Maybe so, but the oil exporters' group is now clearly once again worried about skating on thin ice.

Outside the group's headquarters, the shops and restaurants lining the narrow streets of the historic heart of Vienna exude less warmth. Most are sparsely patronised as Europe teeters on the brink of what many fear will be a second economic downturn.

It is a reality check OPEC appears to be heeding.

MATCH INFO

Chelsea 1
Alonso (62')

Huddersfield Town 1
Depoitre (50')

How green is the expo nursery?

Some 400,000 shrubs and 13,000 trees in the on-site nursery

An additional 450,000 shrubs and 4,000 trees to be delivered in the months leading up to the expo

Ghaf, date palm, acacia arabica, acacia tortilis, vitex or sage, techoma and the salvadora are just some heat tolerant native plants in the nursery

Approximately 340 species of shrubs and trees selected for diverse landscape

The nursery team works exclusively with organic fertilisers and pesticides

All shrubs and trees supplied by Dubai Municipality

Most sourced from farms, nurseries across the country

Plants and trees are re-potted when they arrive at nursery to give them room to grow

Some mature trees are in open areas or planted within the expo site

Green waste is recycled as compost

Treated sewage effluent supplied by Dubai Municipality is used to meet the majority of the nursery’s irrigation needs

Construction workforce peaked at 40,000 workers

About 65,000 people have signed up to volunteer

Main themes of expo is  ‘Connecting Minds, Creating the Future’ and three subthemes of opportunity, mobility and sustainability.

Expo 2020 Dubai to open in October 2020 and run for six months

Tickets

Tickets for the 2019 Asian Cup are available online, via www.asiancup2019.com

Financial considerations before buying a property

Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.

“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says. 

Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.

Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.