Newspaper article THE JOURNAL RECORD

Analysts Express Skepticism of Chavez's OPEC Tour

Newspaper article THE JOURNAL RECORD

Analysts Express Skepticism of Chavez's OPEC Tour

Article excerpt

LONDON (AP) -- By personally visiting each of his OPEC counterparts, Venezuelan President Hugo Chavez hopes to raise his country's profile within the fractious, 11-nation oil producers' cartel.

But analysts said Wednesday that the fiery populist's diplomatic tour is unlikely to have an adverse impact on already-high crude prices or on OPEC's current production policy.

Chavez is trying to stake out a more active role for Venezuela within the Organization for Petroleum Exporting Countries. Venezuela is OPEC's only South American member and the world's third-largest petroleum exporter; it's also a major supplier of crude to the United States.

Long regarded as an aggressive quota-buster, Venezuela under Chavez has changed course and taken a leading role in pushing for OPEC production cuts as a way to firm up prices and keep them high.

Chavez departed Sunday with the aim of inviting his fellow OPEC heads of state to a summit next month in Caracas, the Venezuelan capital.

"By having a diplomatic meeting, they're ratcheting OPEC up one notch from a producers' cartel to a quasi-diplomatic organization. It's a rare occurrence," said Peter Gignoux, head of the petroleum desk at Salomon Smith Barney in London.

Other analysts expressed a similar skepticism about Chavez's OPEC tour, suggesting it's more of a flag-waving exercise than an opportunity to engage in serious talks about oil production and pricing targets.

Iraq and Libya are among the more controversial stopovers scheduled on a breakneck trip to 10 countries in as many days. Chavez's first and most important call was on Saudi Arabia, the world's No. 1 oil producer.

Saudi Arabia angered many of its OPEC partners last month when it announced plans to pump an additional 500,000 barrels a day in an effort to trim prices and ease the financial pain for oil importing countries.

When Chavez met Monday with Saudi King Fahd and Crown Prince Abdullah, the two sides appeared to paper over their differences.

A Venezuelan source who spoke on condition of anonymity said they agreed that OPEC's current output was sufficient. However, the source didn't say if the acceptable level of output included the excess Saudi production. …

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