Opec members seek ‘output limit increase’

Arabian Gulf Arab members of Opec may push for an increase in output limits that would put them at loggerheads with other producers in the group, according to a person with knowledge of the situation. Saudi Arabia, Kuwait, Qatar and the UAE would like to raise the Organisation of Petroleum Exporting Countries output ceiling by 500,000 bpd when the group meets in Vienna tomorrow, said the Opec delegate, who declined to be identified because member countries are still in discussions before Opec’s formal meeting. Other members want to keep the target at the current 30mn bpd, the person said. The differences raise the prospect of deadlock among the 12-member group for a second straight year as Gulf Cooperation Council nations led by Saudi Arabia, the world’s biggest producer, seek to keep a lid on prices to stoke economic growth, while smaller members aim to maximise revenue. Oil has dropped 23% from a high of $128.40 a barrel reached in March. Opec, which supplies 40% of the world’s crude, meets in Vienna to decide on output levels for the second half of the year. Demand for Opec crude will be 30.92mn bpd in the third quarter, and 30.55mn in the fourth quarter, the group said in its monthly report released yesterday. Opec’s 12 members exceeded their collective quota by 1.58mn bpd last month, according to secondary sources surveyed by the group. Brent crude futures fell to $98 on Monday amid concern that Europe’s debt crisis will slow global growth, curbing energy demand, and after Saudi Oil Minister Ali al-Naimi said in an interview with the Gulf Oil Review made on June 2-3 and published on Monday that the group should increase its output ceiling. Upon arriving in Vienna on Monday, al-Naimi told reporters that his view was that “maybe” Opec should raise the group quota. Last June, six of the group’s 12 members rejected a Saudi proposal for Opec to raise output. That meeting, described by al-Naimi as “the worst” he had ever attended, was the first in at least 20 years to end without agreement. The group will “try” to reach a consensus on output, al- Naimi said yesterday. “We always try. We try our best,” he told reporters after a morning walk around the city. Oil prices have fallen below the $100 level that al-Naimi said on May 13 in Adelaide, Australia, that he preferred. Opec should keep its production limit unchanged as prices and demand drop, ministers from Iraq and Venezuela said. Oil production “needs to be reduced, especially from the Gulf countries,” Venezuela’s Oil Minister Rafael Ramirez said when he arrived yesterday. “We don’t see the demand for that amount of crude. We think demand will drop from the level of 2011.” Venezuela favours oil prices in a range from $100 to $110 a barrel, he said. The latest crude price decline has been severe and there’s “tremendous” surplus in the market, Iraqi Oil Minister Abdul Kareem al-Luaibi said on Monday. Oil prices at $100 to $120 are “a reasonable and acceptable price index,” he said as he arrived in Vienna. Iranian Oil Minister Rostam Qasemi arrives in Vienna today. Oil exports from the country are the target of sanctions from the US and a European Union ban on buying the country’s oil takes full effect on July 1. Mohammad Ali Khatibi, Iran’s Opec Governor, criticised some Opec members for boosting output and allegedly seeking to replace Iran’s oil in the global market, Press TV reported on Saturday. The Gulf Oil Review, which is published every two weeks by Petroleum Policy Intelligence, a UK-based consultant, on Monday reported al-Naimi as saying in an earlier interview that: “Our analysis suggests that we will need a higher ceiling than currently exists but, as usual, we will wait until we hear the presentation from the secretariat concerning the outlook for the international oil market, and the views of other member countries.” from gulf times.