Opec ministers may hold off more oil cuts

ABUJA – Opec appeared willing yesterday to pull back from more oil output cuts, responding to consumer nation calls to hold off until winter has passed to guard against price spikes that would hurt the world economy.

Opec, which produces over a third of the world’s oil, will hold talks today to decide whether to curb supplies beyond the 1,2 million barrels per day ministers agreed in October. “I don’t think there will be any cut,” the head of Libya’s delegation, Shokri Ghanem, told Reuters.There is consensus in the group the market is oversupplied – crude oil stocks in top consumer the United States are at a 13-year high – but some ministers fear cutting output now, during peak demand, could drive prices further above US$60.Opec’s core Gulf members, including leading exporter Saudi Arabia, are among those who favour holding fire, a delegate said.They want to see Opec focus on its existing agreement.Members have delivered almost two thirds of the 1,2 million bpd reduction so far, according to Reuters estimates.US Energy Secretary Sam Bodman and International Energy Agency head Claude Mandil have called on Opec to wait until next year before deciding on further supply reductions.The IEA, adviser to 26 industrialised countries, said in its monthly report yesterday Opec cuts were already making themselves felt, “cold comfort for a risk-prone global economy already facing another winter with high oil prices”.Some ministers have indicated they are prepared to take note.Opec President Edmund Daukoru, among the strongest advocates of a cut, was reticent in comments to reporters.”When we meet we will look at all the factors and we will come up with what is best for us, what is best for the consumer and what is best for the global economy,” Daukoru, who is also Nigeria’s minister of state for petroleum, said.Kuwaiti Oil Minister Sheikh Ali al-Jarrah al-Sabah said he believed Opec should stay its hand if prices remained at US$60.On Wednesday morning, US crude stood at US$60,85 a barrel.Oil has fallen from a mid-July peak of US$78,40 but is still three times the price at the start of 2002 as Asian demand kicked in.Refining constraints and worries over supply from Iraq, Nigeria, Iran and Russia helped fuel the rally.Nampa-Reuters”I don’t think there will be any cut,” the head of Libya’s delegation, Shokri Ghanem, told Reuters.There is consensus in the group the market is oversupplied – crude oil stocks in top consumer the United States are at a 13-year high – but some ministers fear cutting output now, during peak demand, could drive prices further above US$60.Opec’s core Gulf members, including leading exporter Saudi Arabia, are among those who favour holding fire, a delegate said.They want to see Opec focus on its existing agreement.Members have delivered almost two thirds of the 1,2 million bpd reduction so far, according to Reuters estimates.US Energy Secretary Sam Bodman and International Energy Agency head Claude Mandil have called on Opec to wait until next year before deciding on further supply reductions.The IEA, adviser to 26 industrialised countries, said in its monthly report yesterday Opec cuts were already making themselves felt, “cold comfort for a risk-prone global economy already facing another winter with high oil prices”.Some ministers have indicated they are prepared to take note.Opec President Edmund Daukoru, among the strongest advocates of a cut, was reticent in comments to reporters.”When we meet we will look at all the factors and we will come up with what is best for us, what is best for the consumer and what is best for the global economy,” Daukoru, who is also Nigeria’s minister of state for petroleum, said.Kuwaiti Oil Minister Sheikh Ali al-Jarrah al-Sabah said he believed Opec should stay its hand if prices remained at US$60.On Wednesday morning, US crude stood at US$60,85 a barrel.Oil has fallen from a mid-July peak of US$78,40 but is still three times the price at the start of 2002 as Asian demand kicked in.Refining constraints and worries over supply from Iraq, Nigeria, Iran and Russia helped fuel the rally.Nampa-Reuters