Opec will maintain oil output
OPEC ministers yesterday kept output steady and said record high prices had been driven by a series of factors that were beyond their control.
United States crude hit a record of US$103.95 a barrel on Monday and was trading above US$100 yesterday.
Washington has said even a token supply increase from the Organisation of Petroleum Exporting Countries (Opec) would help to tame prices.
But Opec ministers have repeatedly said the market has been driven upwards by factors such as a weak US dollar, speculation and political strife, and not by a lack of oil.
After less than two hours of talks, Opec delegates told Reuters that the group had reached agreement to keep supplies steady.
Nigerian Minister of State for Oil Odein Ajumogobia said earlier that he believed output should be kept steady, although he said oil above US$100 was uncomfortable and above US$80 a barrel was high. ‘The Opec official position has been that anything above US$80 is on the high side,’ he told reporters.
Yesterday’s no-change decision could still allow for quiet shifts in Opec production.
Top exporter Saudi Arabia has consistently pledged to keep the market well-supplied with oil. Saudi Arabian Oil Minister Ali al-Naimi said the kingdom had been pumping 9.2 million barrels per day (bpd) ‘day in, day out’, which is roughly 300,000 bpd above its formal Opec output target.
Piling the pressure on Opec, Washington said on Tuesday that a modest output increase of 300,000 bpd to 500,000 bpd could calm prices and help to limit any economic damage.
‘I think it’s a mistake to have your biggest customer’s economy to slow down…as a result of high energy prices,’ US President George W. Bush said.
Given they do not believe oil prices have been driven higher by a lack of crude, Opec ministers have been sceptical that an output increase would have any impact on the market.
The group’s 13 members, who pump more than a third of the world’s oil, could have an opportunity to reassess the market at producer- consumer talks in Rome on April 20 to 22.
