Gulf producers trumpet market stability as S. Arabia says $25 good price

Gulf oil producers, meeting in the Qatari capital Doha, said they were striving to maintain stability in the world crude market as oil kingpin Saudi Arabia described a price of US$25 a barrel as good for both suppliers and consumers, AFP reported on Monday.

The Organization of Petroleum Exporting Countries (OPEC) "should not be seen to be seeking the highest price, but rather a fair price reflecting the reality of supply and demand in the world market," said Qatar's Oil Minister Abdullah bin Hamad al-Attiyah, who is also OPEC's president, in opening remarks.

Qatar has the world's third largest gas reserves and is set to be the largest exporter of LNG by 2010 with an annual output of 30 million tons and is pushing to take production to 45 million tons a year.

"Qatar, along with other oil producers in the Gulf Cooperation Council (GCC) and OPEC, pays much attention to stability on the oil market," said Attiyah, who chaired the meeting of oil ministers from Qatar's GCC partners Bahrain, Kuwait, Oman, Saudi Arabia and the United Arab Emirates.

"This means meeting the demand for oil within OPEC's price band" of $22-28 a barrel, he said.

After the meeting, Saudi Oil Minister Ali al-Nuaimi said market stability would be sought at "any cost" and confirmed the group's commitment to the price band but added that "we are after, and I have said it many times, after a price of $25 (per barrel)."

He said that this price was "fair" for both consumers and producers.

Nuaimi brushed aside talk of further cuts in production on top of the 900,000 barrels per day cut that went into effect on Saturday as "premature" and likened it to "guessing" in the absence of fresh market data regarding inventories and demand.

"The data is not at hand right now to say what the decision is going to be," when the 11-member cartel meets again in Vienna on December 4, said Nuaimi.

He said that at the September 29 meeting where OPEC decided to cut production to 24.5 million bpd "no one came prepared to take a reduction but the data forced everybody's hand and I believe now in hindsight that the decision was absolutely correct."

OPEC's secretary general Alvaro Silva-Calderon predicted on Thursday that oil supply in 2004 would surpass demand thereby putting downward pressure on prices and said the cartel would adjust production if necessary but refused to speculate what exactly it might do. (*)