Algeriah Oil Minister Chakib Khelil

LIMASOL, Cyprus, Dec. 18--Oil prices are likely to remain broadly unchanged in January, with global supply and demand both high, the incoming leader of OPEC said Monday.
“We are probably going to see prices remaining at the level that we are right now,“ said Chakib Khelil, Algeriah’s oil minister, who takes over as president of the Organization of Petroleum Exporting Countries on Jan. 1. “Right now, the oil market is well supplied, stocks are high, (and) we are facing a winter that’s probably going to be harsh,“ Khelil said. “But also we are facing a situation in the world economy that is probably improving. I would expect a strengthening of demand in the next month.“
Khelil spoke to reporters on the final day of a two-day Mediterranean energy conference at this Cypriot port city.
“I would not exclude the possibility of increasing production if the market wants it ... But for the moment, I think we have sufficient supply,“ he was quoted by AP as saying.
Khelil said geopolitics, more than physical supply, was likely to make oil prices harder to predict.
“The pricing (is) not really due to a lack of supply but rather other parameters. The geopolitical situation has not improved,“ he said. “It has improved a little bit in Iraq but the crisis with Iran is still pending. So that is going to weigh on the situation.“
Meanwhile, Venezuela’s oil minister said that Venezuela plans to support Brazil’s possible membership in OPEC. “We would support it,“ Oil Minister Rafael Ramirez told reporters after a joint event with Venezuelan President Hugo Chavez and his Brazilian counterpart, Luiz Inacio Lula da Silva, Rigzone.com wrote.
Brazil has been producing enough oil to meet internal demand, but after discovering a monster oil field off its coast that could have up to 8 billion barrels of oil equivalent, or BOE, the country is likely to become a net exporter.
Lula, who heads a government and business delegation to Caracas to sign cooperation agreements, said last Thursday in a speech that Brazil was close to joining OPEC and that “maybe in a couple of years“ his country could be part of the organization.

Shoppers in Beijing.

WASHINGTON, Dec. 18--The size of China’s economy is overestimated by some 40 percent, but it remains the world’s second largest using a ranking based on purchasing power, the World Bank said Monday.
In a report ranking the world’s economies for 2005, the World Bank said its updated survey using “purchasing power parity“ (PPP) shows a much smaller value for China than earlier estimates which the Bank called “less reliable“, AFP reported.
The study carried out by the World Bank and other partners was “the most extensive and thorough effort“ to measure the relative size of 146 economies using the PPP method which strips out the effect of exchange rates, a Bank statement said.
China participated in the survey for the first time and India for the first time since 1985.
While the economies of China and other developing countries appear larger using the PPP method compared to using market rates, the new estimates include more reliable data on goods and services in China.
The PPP method is still somewhat controversial among economists compared with the traditional market exchange rate methods. Using market methods, Japan would be the second largest economy and China would rank behind Germany, roughly equivalent to the economies of Britain and France, according to the World Bank report.
The Bank had in the past extrapolated figures on China and India using the purchasing power method, but the latest report is based on more extensive data.
“These results are more statistically reliable estimates of the size and price levels of both economies,“ the Bank said.
“The previous, less reliable, methods led to estimates of their GDPs (gross domestic product) that were 40 percent larger than the results of the new, improved methods and benchmark.“
China still ranks as the world’s second largest economy with over nine percent of world production using PPP, but that compared with 14 percent under the old methodology.
India is the fifth largest with over four percent of the world total. That is down from six percent using the previous method but up from two percent using market exchange rates.
In the study, the United States still has the world’s biggest economy with 23 percent of global output. That compares with 29 percent using market rates.

UNITED NATIONS, Dec. 18--The soaring cost of food is threatening millions of people in poor countries, the United Nations Food and Agriculture Organization (FAO) has warned.
Food prices have risen an unprecedented 40 percent in the last year and many nations may be unable to cope, BBC quoted the agency as saying.
It is calling for help for farmers in poor countries to buy seeds and fertilizer, and for a review of the impact of bio-fuels on food production.
The FAO says 37 countries face food crises due to conflict and disaster.
“Without support for poor farmers and their families in the hardest-hit countries, they will not be able to cope,“ said FAO Director-General Jacques Diouf.
The agency’s food price index has jumped almost 40 percent from last year, hitting its highest level since its inception in 1990. The increases are partly due to droughts and floods linked to climate change, as well as rising oil prices boosting demand for bio-fuels, the FAO said.
Changing diet in fast-developing nations such as China is also considered a factor, with more land needed to raise livestock to meet increasing demand for meat.
International cereal prices have already sparked food riots in several countries, the FAO points out.
The organization is calling for urgent action to provide small farmers in these countries with improved access to seeds, fertilizer and other inputs to increase crop production.
Diouf pointed to what he described as “spectacular results“ in Malawi, where a scheme of vouchers for farmers, combined with sufficient rains, had produced a surplus of maize nationally.
The impact of the growth of bio-fuels would be assessed in depth at a high-level conference in June, Diouf said.
The use of land to grow plants which can be used to make alternative fuels--and the use of food crops themselves for fuel--has reduced food supplies and helped push up prices.

GENEVA, Dec. 18--The World Trade Organization agreed Monday to rule on claims by Canada and Brazil that subsidies the United States gives its farmers violate WTO limits, trade sources said.
The WTO, during a meeting of its 151 members at its Geneva headquarters, agreed to hear the complaints filed this year by Canada and Brazil after attempts failed by the three countries to reach agreement among themselves, AFP quoted the sources as saying.
The WTO is to merge the two cases and will appoint a panel of experts to examine the dispute and to report back within six months. Their verdict can then be appealed.
Brazil filed its complaint in July. It then entered bilateral discussions with Washington that yielded no progress, prompting Brazil to take its case to the WTO’s Dispute Settlement Body (DSB).
Canada has also brought its complaint to the DSB, arguing that the United States had violated its WTO commitments on subsidies for a wide variety of crops, including corn, wheat, soybeans, sugar, peas and beans.
The Canadian action accuses Washington of exceeding its commitments on subsidies by billions of dollars in 1999, 2000, 2001, 2002, 2004 and 2005.
Brazil’s complaint covers subsidies over the same period. In 2005, the DSB ruled that US farm subsidies gave US cotton an unfair advantage in the world market, seriously harming Brazil’s cotton growers.
Washington on Monday repeated the comments it made last month on the complaints, saying it was “disappointed“ about both cases and that the disputes distracted from the “essential task of completing the Doha Development Round negotiations.“
A US spokesman rejected the Brazilian contention that it had provided farms with support in excess of its WTO commitments.
Regarding Canada, Washington maintained that some of the measures identified in the complaint had already ceased to exist.
The Doha round of WTO talks were launched in the Qatari capital in 2001 aimed at boosting the world economy and allowing poor countries to use trade as an exit from poverty. The talks are currently deadlocked over disputes between rich and poor nations and differences between the EU and US on agricultural subsidies.
Agriculture comprises around eight percent of total global exports but it is crucial to unblocking the Doha round.

Kuwait City, Dec. 18--Kuwait is asking banks to cancel parts of consumer loans involving violations of lending rules as lawmakers press the government to bail out borrowers by settling debt worth about $4 billion, bankers said.
The state set up a 300 million dinar ($1.09 billion) fund earlier this month to help citizens settle debt after parliament came close to passing a measure to force the government to buy consumer debt portfolios, Reuters wrote.
The central bank was negotiating with lenders on whether banks can contribute to government efforts to slash citizens’ debt by waiving some interest payments on loans where some lending rules were overridden, bankers said.
“This would affect financial results ... It would also mean that banks might be reluctant to grant consumer loans in the future,“ said a banking executive.
The violations include requiring borrowers to make monthly payments exceeding half of their monthly wages and granting loans for terms longer than 15 years.
While bankers argue that debtors were struggling due to rising interest rates, the central bank appeared to be trying to curb banks’ lending appetite.
The central bank, which earlier this year dropped a dollar peg to lower the costs of non-dollar imports, has been trying to discourage consumer lending by keeping the key discount rate stable at 6.25 percent since summer of 2006.
The central bank was clamping down on banks granting consumer loans ’too generously’ in violation of regulations, said Naser Al Nafisi, general manager at Al Joman Center Economic Consultancy.