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OPEC Members Should Pump at Will, Qatar Minister Says (Update4) ·_
June 2 (Bloomberg) -- OPEC should pump oil at will in the next few months, Qatar's energy minister said as the group's president called for efforts to cause a ``significant'' drop in record oil prices.
The Qatari, Abdullah bin Hamad al-Attiyah, said OPEC is near a consensus to boost its output quota by 2.5 million barrels a day, or 11 percent, a plan also backed by Kuwait. Saudi Arabia, the world's biggest oil exporter, will ensure markets have enough supply, said the nation's oil minister, Ali al-Naimi.
``Everybody should produce what they want over the next few months,'' al-Attiyah said in an interview in Beirut, where OPEC meets tomorrow. ``We do not want to see any shortage of supply at all, and we want to avoid shocks.''
Members of Organization of Petroleum Exporting Countries outside of Saudi Arabia are producing as much oil as they can in a bid to prevent higher energy costs from damaging a recovery in the world economy. Canadian Prime Minister Paul Martin said the Group of Eight nations should lobby OPEC for more oil.
Concern of potential attacks on Middle East oil installations and of U.S. refining bottlenecks have inflated prices by $10 a barrel, the Qatari minister said. Crude oil was at $41.85 a barrel in New York, down 48 cents, after reaching a record of $42.45 earlier in electronic trading. Brent crude slid 57 cents to $38.51 a barrel as of 1:32 p.m. in London.
Higher Quotas
An increase in the quota to 26 million barrels a day would effectively allow members to pump whatever they like, since most of the group is operating at full capacity. Normally, OPEC agrees to restrain supplies to prevent prices from falling.
``Unless there are major terrorist attacks on oil installations, increased production should help lower prices,'' said Tor Kartevold, an oil-markets analyst at Norway's largest oil producer, Statoil ASA. ``However, there will still be a terror premium on prices.'' He said prices should be around $28 a barrel based on supply and demand.
Violence is rising in the Middle East, increasing concern about the security of oil supplies from the region. As many as two gunmen today opened fire on U.S. citizens in southern Riyadh, Arabiya television reported. On Saturday, terrorists attacked a compound that houses foreign oil workers in Khobar, Saudi Arabia, killing 22. Last month, five ABB Ltd. employees were killed at a petrochemical plant in Yanbu, Saudi Arabia.
Saudi Arabia has raised oil output to 9.1 million barrels a day, a Persian Gulf oil official said yesterday. That compares with Saudi assessments of capacity of 10.5 million barrels a day. Outside estimates say the limit may be 10 million.
Today in Beirut, delegates from Nigeria, Iran and Venezuela are scheduled to arrive.
`Still Strong' Prices
``What we need is a volume that can have a really significant impact'' on oil prices, OPEC President Purnomo Yusgiantoro of Indonesia said in Beirut. Yet ``the price is still strong.''
Later today, the Ministerial Monitoring Committee, a subgroup including delegates from Nigeria, Iran, Kuwait and OPEC's headquarters in Vienna, is scheduled to meet and recommend a course of action to the ministers.
The United Arab Emirates oil minister, Obaid bin Saif al- Nasseri, yesterday said his nation is pumping 2.45 million barrels a day, 400,000 above its OPEC quota and at the nation's limit. As of the middle of the month, production could rise to 2.5 million barrels, he said.
Ministers yesterday said security around Middle East oil installations is increasing, seeking to allay concern among traders of threats to production. At the gathering in Beirut, the Lebanese army provided security and sharpshooters were placed on buildings surrounding the ministers' hotel.
Price Target
Saudi Arabia's al-Naimi in Beirut said his nation wants to keep prices between $22 and $28 a barrel for the OPEC price benchmark. OPEC can't always control prices, and Saudi Arabia plans to ensure demand is always met, he said.
``We know the price is high, but we can assure you the kingdom and the other producing countries do not want a price that can reduce economic growth,'' al-Naimi said. But ``OPEC cannot always control prices.''
Saudi Arabia on May 21 announced an increase in production and suggested the group's target rise by at least 2 million barrels a day, or 8.5 percent. OPEC president Purnomo and ministers from Qatar and Kuwait have said the group won't formally suspend its system of oil quotas.
The Algerian minister said he supported suspending the limits to show oil traders that prices should decline.
``I support doing away with the quotas, that's the only way we can have an impact on the market,'' Algeria's Chakib Khelil told reporters in Beirut.
Crude oil futures in New York are 37 percent higher than a year ago, in part because of refining bottlenecks and speculation of potential gasoline shortages in the U.S. Iraqi exports have failed to reach prewar levels because of persistent attacks against pipelines, refineries and other infrastructure.
June 2 (Bloomberg) -- OPEC should pump oil at will in the next few months, Qatar's energy minister said as the group's president called for efforts to cause a ``significant'' drop in record oil prices.
The Qatari, Abdullah bin Hamad al-Attiyah, said OPEC is near a consensus to boost its output quota by 2.5 million barrels a day, or 11 percent, a plan also backed by Kuwait. Saudi Arabia, the world's biggest oil exporter, will ensure markets have enough supply, said the nation's oil minister, Ali al-Naimi.
``Everybody should produce what they want over the next few months,'' al-Attiyah said in an interview in Beirut, where OPEC meets tomorrow. ``We do not want to see any shortage of supply at all, and we want to avoid shocks.''
Members of Organization of Petroleum Exporting Countries outside of Saudi Arabia are producing as much oil as they can in a bid to prevent higher energy costs from damaging a recovery in the world economy. Canadian Prime Minister Paul Martin said the Group of Eight nations should lobby OPEC for more oil.
Concern of potential attacks on Middle East oil installations and of U.S. refining bottlenecks have inflated prices by $10 a barrel, the Qatari minister said. Crude oil was at $41.85 a barrel in New York, down 48 cents, after reaching a record of $42.45 earlier in electronic trading. Brent crude slid 57 cents to $38.51 a barrel as of 1:32 p.m. in London.
Higher Quotas
An increase in the quota to 26 million barrels a day would effectively allow members to pump whatever they like, since most of the group is operating at full capacity. Normally, OPEC agrees to restrain supplies to prevent prices from falling.
``Unless there are major terrorist attacks on oil installations, increased production should help lower prices,'' said Tor Kartevold, an oil-markets analyst at Norway's largest oil producer, Statoil ASA. ``However, there will still be a terror premium on prices.'' He said prices should be around $28 a barrel based on supply and demand.
Violence is rising in the Middle East, increasing concern about the security of oil supplies from the region. As many as two gunmen today opened fire on U.S. citizens in southern Riyadh, Arabiya television reported. On Saturday, terrorists attacked a compound that houses foreign oil workers in Khobar, Saudi Arabia, killing 22. Last month, five ABB Ltd. employees were killed at a petrochemical plant in Yanbu, Saudi Arabia.
Saudi Arabia has raised oil output to 9.1 million barrels a day, a Persian Gulf oil official said yesterday. That compares with Saudi assessments of capacity of 10.5 million barrels a day. Outside estimates say the limit may be 10 million.
Today in Beirut, delegates from Nigeria, Iran and Venezuela are scheduled to arrive.
`Still Strong' Prices
``What we need is a volume that can have a really significant impact'' on oil prices, OPEC President Purnomo Yusgiantoro of Indonesia said in Beirut. Yet ``the price is still strong.''
Later today, the Ministerial Monitoring Committee, a subgroup including delegates from Nigeria, Iran, Kuwait and OPEC's headquarters in Vienna, is scheduled to meet and recommend a course of action to the ministers.
The United Arab Emirates oil minister, Obaid bin Saif al- Nasseri, yesterday said his nation is pumping 2.45 million barrels a day, 400,000 above its OPEC quota and at the nation's limit. As of the middle of the month, production could rise to 2.5 million barrels, he said.
Ministers yesterday said security around Middle East oil installations is increasing, seeking to allay concern among traders of threats to production. At the gathering in Beirut, the Lebanese army provided security and sharpshooters were placed on buildings surrounding the ministers' hotel.
Price Target
Saudi Arabia's al-Naimi in Beirut said his nation wants to keep prices between $22 and $28 a barrel for the OPEC price benchmark. OPEC can't always control prices, and Saudi Arabia plans to ensure demand is always met, he said.
``We know the price is high, but we can assure you the kingdom and the other producing countries do not want a price that can reduce economic growth,'' al-Naimi said. But ``OPEC cannot always control prices.''
Saudi Arabia on May 21 announced an increase in production and suggested the group's target rise by at least 2 million barrels a day, or 8.5 percent. OPEC president Purnomo and ministers from Qatar and Kuwait have said the group won't formally suspend its system of oil quotas.
The Algerian minister said he supported suspending the limits to show oil traders that prices should decline.
``I support doing away with the quotas, that's the only way we can have an impact on the market,'' Algeria's Chakib Khelil told reporters in Beirut.
Crude oil futures in New York are 37 percent higher than a year ago, in part because of refining bottlenecks and speculation of potential gasoline shortages in the U.S. Iraqi exports have failed to reach prewar levels because of persistent attacks against pipelines, refineries and other infrastructure.
