Kuwait wants lower oil price, sees $90-$100 as fair

Oil prices have risen to near two and a half-year highs near $119 a barrel in recent days
Kuwait wants lower oil price, sees $90-$100 as fair
LIQUID GOLD: Oil prices have risen to near two and a half-year highs near $119 a barrel in recent days, spurred by concerns over political instability in the MENA region (Bloomberg Images)
By Reuters
Mon 04 Apr 2011 11:55 AM

Kuwait would like to see world oil prices decline and sees $90 to $100 a
barrel as a fair price, Farouk Al Zanki, chief executive of Kuwait Petroleum
Corp (KPC) the country's state oil company, said on Monday.

Oil has risen to near two-and-a-half-year highs near $119 a barrel in recent
days, spurred by political instability in the Middle East and North Africa.

Fighting between rebels and forces loyal to Libyan leader Muammar Gaddafi
has shut down almost all of Libya's 1.6 million barrels per day (bpd) oil
industry, prompting OPEC heavyweight Saudi Arabia to unilaterally boost crude
production to try and compensate for the loss and rein in oil prices.

However Kuwait remains optimistic the disruptions in Libya will prove
short-lived.

"Unrest in the region may last only a few months, helping to alleviate
oil prices," Zanki said in a speech at an industry conference.

Zanki was later quoted by state news agency KUNA in a mobile phone text
message sent to subscribers as saying $90 to $100 a barrel was a fair price for
crude.

"KPC is committed to secure shipments to international markets through
continuous investment in expanding its capacity and the fair price for a barrel
is between $90 and $100," KUNA said.

Saudi Arabia's unilateral output increase has not been followed by other OPEC
members.

Asked if Kuwait was boosting oil output, Zanki said the government had not
instructed Kuwait Petroleum Corp to do so.

"So far we have not been told to do that [for April]," he told
reporters after his speech.

Kuwait says it has between 600,000 and 700,000 bpd in spare production
capacity, although consuming nations put the figure at about half that level.

The Gulf state produced 2.42 million bpd in March, up from 2.31 million bpd
in February and over its implied 2.22 million bpd OPEC quota, according to a
Reuters survey.

Saudi oil output has risen to near 9 million bpd and the kingdom moved last
month to sharply increase the number of drilling rigs it has operating to
maintain its claimed 12.5 million bpd oil production capacity.

Some of the rigs will likely be deployed in the Neutral Zone between Kuwait
and Saudi Arabia that is shared by the two countries, Bader Al Khashti,
chairman of Kuwait Gulf Oil Company, the KPC subsidiary that oversees Kuwait's
interests in the Neutral Zone said.

Khashti said Kuwait's share of oil production in the Neutral Zone was
currently about 285,000 bpd. Total output capacity from the area is 610,000
bpd.

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