Ah springtime in Vienna! What could be better?
Well, OK, it's not quite spring but it's the time of year which fills the heart with joy, with expectation, with excitement over what the changing seasons will bring as the year warms up and the blossoms burst onto the trees.
And yet ...
If you're an OPEC minister it's a time of year which fills you with trepidation, with seasonal concerns and fear. Fear that with the milder weather will come even milder weather and with that, of course, a fear that all over the world demand for oil and all its derivative products will slow dramatically in the second quarter creating a price collapse.
OPEC's fears will this year be exacerbated by the additional worries over a US-led recession gripping the world and denting hydrocarbon demand.
OPEC's concerns are not unwarranted. Despite the voracious demand from China and other Asian economies, the US is still currently the world's biggest "oilaholic" and a recession there, along with its reverberations for the rest of the globe, could scythe the demand picture.
Remember OPEC ministers still recall vividly what happened in Jakarta in 1997 when the cartel was persuaded to boost production just at the same time the Asia crisis was building up a head of steam. Prices tumbled to $10 within a year and OPEC still bears the scars.
Let's also remember one key ingredient when assessing OPEC and its production policies: what it says and what it does are very often two completely different things. OPEC has been accused for years of "cheating" when it comes to quotas and this currently suits not only oil producers, who want to maximise their output during this period of high prices, but also helps consumers satiate their requirements.
Even now, with OPEC expected to roll over production levels to its next Vienna gathering in March, the "cheating" continues, with, for instance Saudi Arabia, the kingpin of oil producing countries, churning out up to 400,000 barrels per day (bpd) over its official 8.8 million bpd quota.
OPEC says it will meet all consumer demand and says it has not caused a supply disruption for decades and yet the likes of US Energy Secretary Sam Bodman and Nobuo Tanaka, Executive Director of the IEA still ask for more.
Oil ministers, though, have other bogeymen to blame for high prices, namely the speculators.
These speculators have been accused by ministers of adding up to $30 a barrel to the price of crude and, if OPEC is right, then they may have added reasons for concern this springtime -- the specs may be turning tail!
According to recent CFTC trading data, net longs on crude contracts fell by 56 percent in the week to January 22. In addition, the amount of long put positions on out of the money June 2008 puts has jumped by a factor of 4.
Stil,l don't get carried away with your pity for the oil producers as they struggle to make the tough decisions- they're cleaning up out there. Latest numbers from the US EIA reckon OPEC countries will earn a record $850 billion this year in net oil revenues. Now that'll put a spring in their step!