OPEC MEETING MMC refuses to comment as speculation mounts of output hike UPDATE

OPEC MEETING MMC refuses to comment as speculation mounts of output hike UPDATE

	Published : Mon, 10 Sep 2007 17:19 By : Agencies Print this Story

(Updating with further comments)

VIENNA (Thomson Financial) - Members of OPEC's ministerial monitoring committee refused to comment on their output recommendation as speculation mounts that the cartel might opt for a small output hike at its meeting tomorrow.

Kuwait's oil minister Mohammad al Olaim said the cartel takes its responsibility as producers seriously and that it has heard some 'interesting' comments about geopolitics.

He refused, however, to clarify the MMC's actual recommendations or to confirm speculation that OPEC might opt for a small output hike tomorrow. The MMC includes Nigeria, Kuwait and Iran.

An official OPEC source from Nigeria told Thomson Financial News that the MMC committee's objectives will become clear at tomorrow's main meeting.

Earlier today, the oil market started to factor in the possibility OPEC will decide to increase supply, albeit by a small amount, at its meeting tomorrow.

So far, the general feeling has been that the cartel will decide against an increase, but Saudi oil minister Ali al Naimi has been unusually quiet during his stay in Vienna ahead of the meeting. His silence has, in part, prompted a shift in sentiment.

Other ministers had previously signalled they would not vote to increase production quotas but are now refusing to comment to the press.

Further, a newswire earlier reported that OPEC's Gulf producing countries were in favour of a small increase, while another has quoted sources as saying the cartel may hike quotas by 500,000 barrels per day.

'The market is starting to price in a small output hike,' said MF Global trader Andy Lebow.

'I think OPEC is looking at the backwardation (in the price structure), their own projections, the International Energy Agency projections and the oil price.

'They are seeing that the fundamentals are tight and the market needs more barrels.'

The cartel has come under intense pressure to raise these quotas from bodies such as the International Energy Agency as prices have climbed close to all time highs above 78 usd per barrel to counteract rising energy costs.

maytaal.angel@thomson.com; anealla.safdar@thomson.com

har/lam

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