OPEC poised to keep oil supply steady as price firm
Reuters
Dec 20, 2009
By Alex Lawler and Henrique Almeida
LUANDA (Reuters) - OPEC would leave output targets unchanged when it meets this week in Luanda, ministers said on Sunday, as robust oil prices offset concerns in the group about excess supplies.
Saudi Arabian Oil Minister Ali al-Naimi has yet to arrive in Angola ahead of Tuesday's meeting but he has already made clear he believes the price is right and he sees no need for the Organization of the Petroleum Exporting Countries to adjust supply.
Speaking on Sunday, other ministers also took the view they should stick with targets in place since last December.
"There will be no change in OPEC supply of crude oil. OPEC will not reduce supply and it will not increase supply," Algerian Energy and Mines Minister Chakib Khelil told reporters in Algiers before leaving for Luanda.
"I don't think so," Iraqi Oil Minister Hussain al-Shahristani said on his arrival in Luanda when asked whether OPEC needed to adjust its supply ceiling.
OPEC delegates speaking on condition of anonymity reinforced the impression Tuesday's meeting should be swift and without major debate.
"The price is right," said one.
"This will be a meeting with no surprises. It will be straightforward. Everybody wants to arrive and leave with minimum fuss. I don't expect any change," said another.
Delegates also said the Iranian and Kuwaiti oil ministers would not attend Tuesday's meeting, leaving two of the 12 OPEC members represented at delegate rather than ministerial level.
OIL PRICE JUST RIGHT
Benchmark U.S. crude futures have slipped from a year-high of $82 a barrel struck in October, but at above $73 a barrel, they are close to the range Naimi and others in OPEC have said is enough for producers to turn a profit and not too high for consumers, smarting from a global recession.
"The (meeting) will not lead to any change in production," Saudi-owned al-Hayat newspaper on Friday quoted Naimi, minister for the world's biggest oil exporter, as saying.
"The current price is wanted by all. We are not alone in wanting it, but also those with alternatives and oil difficult to extract. And the oil price of $75 to $80 is something we all want."
Oil fell toward $30 a barrel in December last year, spurring the producer group to announce a record cut of 4.2 million barrels per day (bpd) from production in September 2008.
Officially that reduction, representing around 5 percent of oil demand, is still in place, although OPEC's compliance with the target has fallen from historic highs of around 80 percent to roughly 60 percent now as the oil price has rallied.
Some have said Tuesday's OPEC meeting should make the case for tighter compliance.