OPEC President Says Prices Are at `Acceptable' Level (Update2)
Dec. 10 (Bloomberg) -- The OPEC president said oil prices are at an ``acceptable level'' and the group plans to maintain its current production to meet demand during the coming Northern Hemisphere winter.
``We will continue with our production levels,'' Sheikh Ahmad Fahd al-Sabah, who is also Kuwait's oil minister, told reporters in Kuwait before ministers meet two days from today.
The Organization of Petroleum Exporting Countries will discuss production policy as oil prices stay close to $60 a barrel in New York, almost 50 percent higher than a year ago. The 11- nation group suspended official production limits in September until the end of this year to compensate for supply disruptions caused by the U.S. hurricanes.
Outside of Saudi Arabia, the world's biggest oil exporter, most members already are pumping as much as they can to meet rising demand from China and other consumers. Officials from Saudi Arabia, Nigeria, Algeria, the United Arab Emirates, Iran, Libya and Indonesia in the past three weeks have all said the group should keep pumping at current levels.
The group has no consensus on extending an offer to fill every order for additional barrels, up to the 2 million-barrel-a- day of spare production capacity that members hold, al-Sabah said.
``Kuwait favors renewing the agreement,'' he said.
IEA Action
OPEC's September decision followed an International Energy Agency agreement to release emergency oil stockpiles for only the second time in its three decades of existence. A lack of spare refining capacity has led OPEC members to expect prices will stay high.
OPEC won't have to cut production if it meets before a scheduled meeting in March ``because I think prices now are not related to demand and supply'' but rather to ``geopolitical problems and the weather,'' al-Sabah said. Kuwait is producing 2.68 million barrels of oil a day, he said.
Oil demand will rise by 1.5 million barrels a day next year, compared with 1.2 million barrels a day forecast for 2005 and 2.6 million barrels a day in 2004, al-Sabah said.
``The growth of economies is continuing,'' the OPEC president said. ``We have a positive result about the growth of economies in the U.S., Asia and even in Europe.''
OPEC's daily production rate last month rose 30,000 barrels to 30.25 million barrels, according to a Bloomberg survey of companies and analysts.
Price Target
Other members of OPEC have proposed cutting output before March, ``a logical proposal'' that merits considering at a special meeting before then, the OPEC president said.
OPEC will also start discussions on the group's oil price target after the group abandoned a $22-to-$28 a barrel range at the beginning of this year, according to al-Sabah.
OPEC is seeking oil prices between $35 and $55 a barrel, he said. His colleague from the United Arab Emirates, Al Mohamed bin Dhaen al-Hamli, is targeting oil between $40 and $50 a barrel, according to a statement from the minister today on the state-run WAM news agency.
To contact the reporter on this story:
James Cordahi in Kuwait at sev@bloomberg.net
Last Updated: December 10, 2005 07:11 EST |
