Oil ministers from the Organization of Petroleum Exporting Countries, still squabbling over ways to prop up falling world oil prices, opened another emergency meeting today in a mood of nervous apprehension about the future stability of their cartel.
The recent snap of cold weather in the United States and Europe has failed to generate much new demand for oil, creating more pressure than ever on OPEC's 13 states to cut prices or production as the peak season for consumption passes. But bitter differences remain over who should bear the burden of any loss in revenue.
Reflecting the feuds and frustrations now rampant within the organization's ranks, the United Arab Emirates' oil minister, Mana Said Otaiba, stormed out of the morning session only an hour after it started, vowing he was returning home.
He accused Nigeria's Tamunoemi David-West of "stabbing OPEC in the back by undermining" the cartel's fixed prices and output quotas.
Later, Otaiba reappeared for the afternoon session after apparently being mollified by David-West. Saudi Arabia's Ahmed Zaki Yamani, who mediated in the dispute, said it was "a misunderstanding that was clarified and is now over."
Nonetheless, the incident provoked a further loss of confidence on the spot market, or free trade oil market. The price of Britain's Brent crude fell 40 cents, causing the pound to drop to record lows and forcing London to raise interest rates 2 percent to protect the beleaguered currency.
Three months ago, OPEC ministers decided to drop production back to 16 million barrels a day from 17.5 million in a bid to solidify the official $29 benchmark price.
Nigeria, forced to keep pace with price cuts by non-OPEC competitors Britain and Norway, had prompted the crisis by breaking OPEC ranks and cutting the price of its oil by $2.
Nigeria has refused to rejoin the OPEC price structure and is now exceeding its output quota by 250,000 barrels a day. Other members have also been cheating.
"We must be realistic," said David-West, who argued for OPEC as a whole to follow his country in reducing prices in the hope of stimulating demand.
Another sign of OPEC's frame of mind was seen in a decision by the ministers to revoke credentials of a Wall Street Journal reporter who wrote an article last week detailing the extravagant habits of some participants. Youssef M. Ibrahim, who regularly covers OPEC meetings and the oil industry for the newspaper, mentioned in the article that Yamani rents an armor-plated $300,000 Rolls Royce limousine and competes with another minister for a prized $1,600-a-night suite at the Hotel Intercontinental where the meetings usually take place.
Indonesia's oil minister Subroto, the conference chairman, said, "We felt we should show our displeasure" because the reporter "has gone beyond the coverage of the oil conference and entered into private lives." Subroto would not answer questions about the accuracy of the allegations.
Other delegates said there was anxiety about OPEC being portrayed as high living when several member states are pursuing rigorous austerity policies to revive their economies.
In their meeting, the ministers endorsed operating procedures for a new OPEC watchdog committee formed at the last meeting after Christmas to audit production levels to prevent further cheating. Yamani, who will serve as head of the five-man executive council, announced the panel will begin monitoring oil liftings in February.
A majority of OPEC members now seems to favor a cut in the $29 benchmark price to correlate with the free-market level. But the cartel still remained split over how to narrow the price gap between light and heavy crudes, which now spans nearly $4. New refining techniques have made the cheaper heavy oils more popular.
Producers of light oil, such as the United Arab Emirates, Libya and Algeria, do not want to lose income by reducing prices. They are demanding that producers of heavy crudes, mainly Saudi Arabia and Kuwait, raise theirs.