Leaders gather for Opec summit

Opec leaders are unlikely to launch major initiatives

Leaders and top officials of some of the world's biggest oil producers have been gathering in Venezuela for the first summit of the Organisation of Petroleum Exporting Countries in 25 years.

The two-day meeting, which starts on Wednesday, comes amid widespread concern in major consuming countries about high oil prices and a resurgence in the profile of the 40-year-old producers' cartel.

The country hosting the summit, Venezuela, said it was hoping to use the opportunity to air a wide range of issues. President Hugo Chavez said: "We will not only talk about oil.

"We will deal with issues that concern us greatly such as poverty, inequality, foreign debt and the sovereignty of the peoples."

Analysts said Opec members would be in celebratory mood and were unlikely to announce major strategy initiatives.

Hawkish noises

But some of the early arrivals were already making hawkish noises following the US government's decision earlier this week to release oil from its strategic reserves in an attempt to drive down prices.

Libyan Oil Minister Abdullah al-Badri warned that if the EU followed suit, Opec might be forced to cut back output.

His comments were echoed by Opec president Ali Rodriguez, also Venezuela's oil minister, who said: "[A release] might provoke a downward movement [in prices] so big that it would oblige Opec to take some decision."

Consuming countries have been calling for an increase in production, hoping that prices will fall if there is more oil in the market.

Opec has blamed crude oil price developments on the activities of market speculators and said pump prices are high for consumers because of taxes levied by their governments.

Mostly unsympathetic

Having seen crude prices slump below $10 a barrel in early 1998, Opec members are now enjoying prices about three times that level and are mostly unsympathetic to pleas from the industrialised nations.

Venezuela has been among the most vociferous defenders of current price levels, repeatedly claiming that prices are "not high, but fair".

Others thought to hold more moderate views, including Saudi Arabia - the world's largest oil producer and exporter - have said little publicly, in the interests of maintaining Opec's new-found united front.

The organisation has said it favours keeping prices in a range of $22-28 a barrel and will raise or trim output to achieve this.

But consuming countries have been critical, saying not enough is being done to make more supplies available.

Crude oil prices had been hovering around 10-year highs until the US decision to open its reserves.

On Tuesday, the price of the world benchmark Brent crude for November delivery closed at $30.40 a barrel in London, down from last week's decade-long peak of nearly $35 a barrel.