Saudi says OPEC to discuss oil output boost

Written by:
Subscribe to Oneindia News

KUWAIT, Nov 11 (Reuters) Saudi Arabia, the world's top oil exporter, said on Sunday the exporter group would discuss an increase in oil output at an upcoming meeting in a bid to cool record prices nearing 0 a barrel.

OPEC heads of state will meet in Riyadh on Nov. 17-18 and consumer countries are urging the group to lift output to avert a supply crunch. The group's oil ministers hold their next formal conference on Dec. 5 in Abu Dhabi.

''This is premature but we will discuss the issue when we meet,'' Saudi Oil Minister Ali al-Naimi told reporters after discussions with his Kuwaiti counterpart.

The acting oil minister for Kuwait, also one of OPEC's core Gulf members, said after the meeting that the Organization of the Petroleum Exporting Countries will consider increasing output if the markets need it.

''OPEC will not hesitate to exercise its responsibilities,'' Mohammad al-Olaim told reporters at the airport in Kuwait.

Asked if this would include a possible output increase, he said: ''If the market requires it and according to market principles.'' OPEC is not currently expected to make a formal decision on supply in Riyadh, where Saudi Arabia will host the group's third heads of state summit, and appears more likely to wait until the meeting in Abu Dhabi.

On the sidelines of the World Energy Congress in Rome, Qatari Energy Minister Abdullah al-Attiyah said he was not expecting a change in output to be decided in Riyadh.

''So far I don't think so. We have no OPEC meeting. We have to separate conferences from summits,'' al-Attiyah told reporters.

A delegate from an OPEC country outside the Gulf also did not expect a decision.

''It is unlikely that this issue will be decided in Riyadh,'' the delegate said.

SAUDI INFLUENCE At a meeting in September, Saudi Arabia persuaded OPEC, source of more than a third of the world's oil, to raise production by 500,000 barrels per day (bpd) from Nov. 1 in a gesture to consumer countries worried about soaring prices and diminishing stocks.

The move has failed to prevent crude oil surging to an all-time high of .62 a barrel in New York on Nov. 7, a rise from below when the group met in Vienna on Sept. 11.

Even with prices at around that level, Saudi Arabia and Kuwait were concerned about the high cost of oil and its negative impact on consumers.

There is already evidence that costly oil is taking its toll on demand in top consumer the United States.

In the past month, demand for fuel in the United States fell 0.4 percent from a year ago, the U.S. Energy Information Administration said in a weekly report on Wednesday.

Up to now most in OPEC insist that the market is well supplied with crude and that a further supply increase would do little to tame a rally driven by speculators, political tensions and a weak U.S. dollar.

Importers such as the United States take a different view, saying prices are being driven higher by tight supplies and that inventories could fall further.

Stockpiles in industrialized nations of the Organization for Economic Cooperation and Development could fall to 20 million barrels below the five-year average by the end of the year, according to the U.S. EIA.

A Reuters survey showed OPEC raised oil production in October in advance of the formal deal to lift supply.

The Saudi oil minister is on a tour of several countries including Bahrain to coordinate ahead of the Riyadh summit, Olaim said. Naimi said Gulf producers were doing all they could to keep markets well supplied.

''Gulf producers do not control the market,'' he said. ''Gulf states are trying as much as they can to secure supplies and are trying to achieve market stability but prices (are) set by the market.'' Reuters SBA VP0320

Please Wait while comments are loading...