- Title: KUWAIT: OPEC oil ministers arrive for meeting in Kuwait City.
- Date: 11th December 2005
- Summary: WIDE OF SECURITY GUARD STANDING ON HUMVEE
- Embargoed: 26th December 2005 12:00
- Keywords:
- Location: Kuwait
- Country: Kuwait
- Topics: International Relations,Energy
- Reuters ID: LVADGIRWOTGOYC5ORP6PNACAGDKP
- Story Text: OPEC (Organisation of Petroleum Exporting Countries) ministers were gathering in Kuwait to plot production output through the first quarter of 2006, with the cost of a barrel of oil close to a 25-year-high and petrodollars pouring into the coffers of OPEC exporters like Saudi Arabia.
Ministers seemed to be in broad agreement on Saturday that they should delay cutting output until high prices drift lower and the worlds big consumers are through the worst of winter.
Some in the group favoured meeting early next year with a view to trimming production from the current 30 million barrels per day if prices have fallen and fuel stocks are high. One delegate said a 500,000 bpd reduction was possible.
The cost of oil has risen some 40 percent since the start of the year and the worlds refineries have struggled to churn out enough gasoline and other fuels to meet demand.
Buying from the rapidly growing economies of China and India has helped drive a two-year rally. The worst Atlantic hurricane season on record knocked out much U.S. output and took prices to a record 70.85 U.S.dollars at the end of August, hurting economic growth.
Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah said on Saturday he did not think OPEC would have to cut output in January should the cartel meet then.
"My personal belief is no, because I think that now the price is not related to demand and supply", Sheikh Ahmad, also OPEC president, told reporters.
Speaking to reporters ahead of Monday's conference United Arab Emirates Energy Minister Mohammed bin Dhaen al-Hamli said the market was comfortable with the current oil price. "Market is very comfortable I think. The market fundamentals, supply and demand, demonstrate that the market is very well supplied," he said.
"The price seems reasonable, as long as it is around 50, the OPEC basket, it's reasonable," he added.
Algerian Energy and Mining Minister Chakib Khelil who arrived in Kuwait on Friday (December 9) night told reporters he thought there would be enough demand to absorb all the OPEC oil at current production level.
OPEC has been pumping almost flat out all year, over-shooting its 28 million bpd official output ceiling.
The group said in September it would offer up all of its two million bpd of spare oil -- most of it in Saudi hands -- if the market needed it. The cartel will review that arrangement on Monday.
Their decision will make little difference to consumers, who have not taken up any of the reserve oil because it is heavy and hard to refine into lighter transport fuels.
OPEC may regain its ability to stabilise prices next year, when the worlds thirst for oil is expected to slow and the 11-member exporter group brings on new capacity.
Projecting first quarter demand at 29.8 million bpd and the second quarter at 27.7 million bpd, OPEC sees a lower requirement for its crude.
These figures imply a cut in production. OPEC, excluding Iraq, has an official production ceiling of 28 million bpd. - Copyright Holder: REUTERS
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