OPEC unlikely to up output in 2003: oil ministers
Monday, October 14 2002 - 02:13 AM WIB
They also said the cartel could make up Iraq's quota should it be target of a US-led war, but warned oil prices could increase further on the political instability in the region and cause turbulence on crude markets.
Iran's oil minister, Bijan Namdar Zangheneh, said he saw no reason for the 11-member Organisation of Petroleum Exporting Countries (OPEC) to raise production in the wake of sharp price rises in recent months.
"Actually, there is no reason for a rise in OPEC production, and there is no decline in supply" on the international market, Zangheneh said on the sidelines of a gas conference in Doha where OPEC was also holding "informal" meetings on oil prices and production levels.
The minister told the state QNA news agency that higher prices were the result of "political tension" in Gulf countries which are the world's main suppliers of crude but are bracing for a US-led invasion to oust Iraqi President Saddam Hussein.
He said OPEC would hold "consultations" if prices broke through their fixed price band.
In September in Osaka, Japan, OPEC oil ministers maintained unchanged their production ceiling of 21.7 million barrels a day -- its lowest level in a decade -- and said they would re-examine the situation at a meeting on December 12 in Vienna.
But the ministers said they would monitor the market and do what was necessary, "including calling a special meeting" if a key "basket" measure of oil prices failed to stay for 20 consecutive days within the OPEC-defined range of 22-28 dollars.
"We do not anticipate a hike in output in January," Algeria's Energy Minister Chakib Khelil, a former OPEC chief also told reporters in Abu Dhabi, where an international oil exhibition is being held to showcase 1,000 companies from 45 countries.
"The price of crude oil is on the high side due to the political situation (in the region). The 28-dollar price reflects the political situation, otherwise the price would rule around 25 dollars a barrel," he said.
Khelil said the cartel was "stable right now and meeting the requirements of the world market. There is no need for increase in output now."
The Algerian minister added that "cooperation from non-OPEC (members) is good. We are coordinating well with Norway, Mexico and Russia and I am sure they will continue to cooperate."
"If there is an attack on Iraq and disruption in supply from Iraq, OPEC will fill in," Khelil stressed.
Oil prices have risen sharply in recent months on the prospect of a war in the Gulf, which traders worry might disrupt supplies from the world's leading oil-producing region.
But Emirati Oil Minister Obeid ben Seif al-Nasseri warned oil prices could increase further on the regional political instability.
"Oil markets have maintained comparatively stability this year, but political changes have impacted and moved the price up," Nasseri said in Abu Dhabi.
"Current oil prices have an additional war premium increment imposed on them of more than 50 cents per barrel due to political uncertainty," largely because of continued sabre-rattling between Washington and Baghdad, he said.
"This increment could increase if the situation deteriorates and would negatively reflect on world oil markets, causing further turbulence and instability."
The price of benchmark Brent North Sea crude for November delivery rose to 28.00 dollars a barrel in London Friday, while in New York, a barrel of reference light sweet crude for November delivery increased to 29.27 dollars.
Saudi Arabia, which with the world's largest oil reserves dominates OPEC, had been pushing for increased production to ease price pressures ahead of the northern hemisphere winter.
The move was opposed by Indonesia, Qatar, Kuwait and Venezuela which argued that the prospect of a US-led war on Iraq was responsible for price spikes, and not supply-and-demand issues.(*)