OPEC members expect to keep production quotas unchanged and will urge one another to comply better with output limits when they meet tomorrow amid mixed signals about the global economy, several ministers said.
“All the ministers agree that we should leave the level of production stable,” Venezuelan Energy and Oil Minister Rafael Ramirez said today in Vienna, where the Organization of Petroleum Exporting Countries has its headquarters.
Kuwaiti Oil Minister Sheikh Ahmad al Abdullah al Sabah said the group “will maintain” current quotas, echoing comments from his Libyan and Qatari counterparts.
“We’re not going to touch the quotas because my feeling is that we should maintain whatever was decided in 2008,” Angolan Oil Minister Jose Maria Botelho de Vasconcelos said in an interview. “We’re still gaining advantage despite the weakening of the dollar.”
Global oil demand will be higher than previously estimated for this year and the next, the International Energy Agency said today in a report. Recent strength in nations of the Organization for Economic Cooperation and Development “contained quirks which suggest it may not persist,” according to the Paris based energy adviser. “It is unclear whether the recovery will be sustainable, notably in the United States.”
While demand is slowly rising commercial stockpiles remain high and the group should increase production only when it becomes clear that demand is overtaking supply, said a Arabian Gulf oil official, speaking on condition of anonymity.
OPEC, which supplies 40 percent of the world’s oil, is benefiting as prices stay above the $70 to $80 a barrel band that Saudi Arabian Oil Minister Ali al Naimi said Oct 11 is “ideal.”
Venezuela hopes to see prices rise even further. “We’re hoping to maintain the price and to increase that a little bit to between $90 and $100 a barrel,” Ramirez said. Shokri Ghanem, chairman of Libya’s National Oil Corp, said he would like to see oil rise to $100 by the end of the year.
Crude for November delivery rose for the first time in three days. Futures gained as much as $1.78 to $83.45 in electronic trading on the New York Mercantile Exchange. It was at $82.97 a barrel at 6:47 pm London time. Yesterday, the contract fell 54 cents, or 0.7 percent, to settle at $81.67.
Oil gained 3.9 percent this month as the dollar weakened 2.4 percent against the euro. The Chinese yuan last week climbed to its strongest level against the dollar since 1993.
Oil consumption worldwide will average 86.9 million barrels a day in 2010 and 88.2 million barrels a day in 2011, the IEA said in its monthly Oil Market Report. That’s 300,000 barrels a day more than last month’s forecast for both years.
The IEA raised its estimate of the amount of oil OPEC producers will need to provide to balance world supply and demand. Its new estimate is an average of 29.3 million barrels a day for next year, or 100,000 barrels a day more than the agency’s estimate for 2010.
“We’ll be asking for more compliance,” Sheikh Ahmad said in Kuwait as he departed for the meeting.
OPEC raised production by 5 percent from a five year low in March 2009, and now exceeds its own target by 1.9 million barrels a day, about the same amount as Angola alone produces. Output from the 12 members was 29.1 million barrels a day in September, according to Bloomberg estimates.
The group agreed to a record 4.2 million barrel a day cut in production in late 2008 as global demand fell 0.6 percent, the first decline since 1983. Members are now adhering to about 54 percent of that cut, the IEA’s monthly report showed. Compliance reached a peak of 79 percent in March 2009, based on Bloomberg data.
Follow us on
