OPEC will probably maintain its oil production targets, resisting calls for more supply because of concerns demand may falter as U.S. economic growth slows, said officials from six member-nations.
Representatives from members including Libya and Iran have said in the past 11 days there's no need to boost output from targets set last year. The group, which produces more than a third of the world's oil, meets tomorrow in Vienna.
``No, I don't think there should be an output increase,'' Libya's top oil official, Shokri Ghanem, chairman of Libya's state- run National Oil Corp., told reporters when he arrived in Vienna late yesterday. ``I don't think the market needs that for the time being.''
Oil prices have risen 25 percent this year and touched a record $78.77 a barrel in New York on Aug. 1 after members of the Organization of Petroleum Exporting Countries curbed exports to drain inventories. High oil prices are boosting profit at Exxon Mobil Corp. and BP Plc and encouraging producing nations such as Russia, Kazakhstan and Venezuela to take greater control over their energy resources.
Ministers from Iran and Kuwait also said over the weekend that OPEC's production limit of 25.8 million barrels a day shouldn't be changed, echoing comments from top officials in Venezuela, Algeria, and Qatar.
OPEC President Mohamed al-Hamli, who is also the United Arab Emirates' oil minister, said yesterday that ``supplies to the oil market are now sufficient,'' the state news agency WAM reported.
Market Expectation
Any quota change would be viewed as a surprise. All 23 oil traders and analysts in a Bloomberg survey last week said they expect OPEC to leave its collective target unchanged.
Saudi Arabian Oil Minister Ali al-Naimi declined to comment to reporters in Vienna this morning. Arriving at his hotel today, Iran's acting oil minister, Gholamhossein Nozari, said there is ``no shortage'' of oil supplies in the market.
Summit Energy Services Inc. analyst Brad Samples in Louisville, Kentucky, said the ministers ``are likely to cite high crude oil inventory levels in their decision.''
They will ``continue to point to the tight refining industry as the primary explanation of high prices,'' he said.
The Organization for Economic Cooperation and Development lowered its forecasts for economic growth this year in the U.S. and Europe on Sept. 5. The group cut its forecast for the U.S. expansion to 1.9 percent from a May figure of 2.1 percent and for the 13 nations sharing the euro to 2.6 percent from 2.7 percent.
Weighs on Economy
``I fear that OPEC has set implicitly a new target price of about $70 a barrel,'' said Claude Mandil in an interview on Aug. 30, his last day as director of the International Energy Agency, which advises 26 of the world's biggest oil-consuming nations. ``I deplore this because it weighs on the global economy and it's a burden for the poorest people.''
OPEC hasn't set an official price target since abandoning a $22-to-$28 a barrel range in 2003, following the U.S.-led invasion of Iraq. Its members received $71.99 a barrel for their oil on Sept. 6, according to the group's reference basket price calculated using the producers' 11 main crude oil grades.
Crude oil for October delivery was at $76.13 a barrel, down 57 cents, on the New York Mercantile Exchange at 9:14 a.m. in London. OPEC forecasts daily world oil demand will expand by 1.34 million barrels next year, or 1.6 percent, to 87.06 million.
Its members are pumping more than their cutback agreement allows. The 10 members with quotas produced 26.71 million barrels a day last month, or about 860,000 barrels a day more than targeted, according to Bloomberg estimates. The planned cut, agreed at two meetings late last year, was 1.7 million barrels a day.
Leaking Oil
``OPEC is already dealing with its dilemma by gradually leaking more oil onto the market,'' Adam Sieminski, Deutsche Bank AG's chief energy economist in New York, said last week.
U.S. crude inventories, although higher than their five-year average, have dropped about 7 percent since the end of June, which may make OPEC more willing to boost supply when it meets again in early December, analysts said.
``We have confidence there's no shortage of supply at this moment,'' Qatari Oil Minister Abdulla bin Hamad al-Attiyah said yesterday. ``If the winter is severe that's a difference story.''
OPEC Secretary-General Abdalla El-Badri said last month that the 10 members with quotas have completed about 60 percent of their promised cutback and that any level above 65 percent would be ``fine.''
OPEC has exceeded its targeted level by an average of 530,000 barrels a day over the past three years, Bloomberg estimates show.
Iraq is allowed to export as much as possible to rebuild its oil industry after two wars. OPEC's newest participant, Angola, hasn't been assigned a limit. Indonesia often imports crude to meet demand and has little sway over OPEC decisions.
Crude output from all 12 OPEC members was 30.33 million barrels a day last month.
Qatar's al-Attiyah said European and Japanese oil consumers are getting a ``huge discount'' because of the weakness of the U.S. dollar, the currency in which oil is traded internationally.
(Bloomberg)