OPEC looks long-term as market turns volatile

The Organisation of Petroleum Exporting Countries (OPEC) at its ministerial conference in Vienna on Thursday adopted a new and comprehensive long-term strategy (LTS) in the backdrop a declining demand for oil and wide fluctuations in its prices.

Oil prices have declined in two successive years - a situation unseen since the early 1980s. Moreover, prices have witnessed a roller coaster ride, particularly towards the end of 2007, throughout 2008 and early 2009, it noted.

The LTS defines overall objectives, identifies OPEC's key challenges, both current and expected, and explores a number of coherent and consistent scenarios that depict plausible and contrasting futures of the energy scene.

"It is designed to be robust and adaptive throughout these various possible futures and will undergo 'wind tunnel' testing over the next five years to identify implementation gaps and ensure it continues to remain effective and efficient," OPEC said.

Speaking at the meeting, Wilson Pástor-Morris, minister of non-renewable natural resources of Ecuador and president of the conference, said the oil market has seen a modest degree of price stability since the last conference in March. The OPEC basket price has averaged around $75 a barrel so far this year while the weekly average price has remained within a range of $70-76/b since the beginning of June.

"The current average price level appears to receive a positive reaction from producers and consumers at a time of much economic uncertainty in the world at large," he noted.