OPEC MEETING Kuwait oil minister sees 'positive' outcome to quota meeting UPDATE

OPEC MEETING Kuwait oil minister sees 'positive' outcome to quota meeting UPDATE

	Published : Tue, 11 Sep 2007 11:04 By : Agencies Print this Story

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LONDON (Thomson Financial) - Kuwaiti oil minister Mohammad al-Olaim said he said he sees a 'positive' outcome to today's OPEC meeting, at which production quotas are set to be discussed.

Al-Olaim said he believes OPEC knows the current oil market is tight and that it is likely to take this into consideration when setting quotas.

'What we have seen is that the market is little bit tight,' al-Olaim told reporters. 'I think (the OPEC delegates) will take that information into consideration ... I think we will see something positive.'

His comments raised speculation that even with most OPEC members opposed to a hike, top producer Saudi Arabia has managed to convince some Gulf states of the need to increase output.

Saudi Arabia has refused to make any official comments to the press ahead of the meeting, however, OPEC sources have hinted the kingdom is in favour of a small output hike.

As it is OPEC's most influential member, it is not surprising to see the likes of Kuwait and others change their tone slightly ahead of the meeting.

On his arrival in Vienna, Kuwait's al-Olaim had taken a different stance on output, telling the press 'the oil price increase is not related to demand and supply so we think that whatever you do this will not affect directly the price'.

Analysts say even if OPEC agrees to a small output increase of 500,000 1- mln bpd, this will not mean any extra oil in the market as cartel is in reality already exceeding its output quotas by about this amount.

However, an agreement to raise quotas will signal to the market that OPEC is concerned about near record high oil prices and is prepared to act if necessary.

This might help dampen oil prices, which remain near record levels.

jan.harvey@thomson.com

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