Oil output to remain at max: OPEC

Oil output to remain at max: OPEC

	Published : Tue, 13 Dec 2005 02:05 By : Amy Watts Print this Story

KUWAIT: Oil ministers will today agree that oil supply should be maintained at maximum level, the highest output level for 25 years, in order to keep prices in check.

OPEC President Sheikh Ahmad al-Fahd al-Sabah said he expected backing from his colleagues to keep oil production close to the 30 million bpd limit after a meeting with the OPEC’s monitoring committee comprising Iran, Kuwait and Nigeria. The committee will present its recommendations at a full meeting of OPEC members today.

At the OPEC meeting to be held in Sheraton Hotel here, members will chart out the policy for next year and discuss oil prices which have reached record levels in recent months. Surging demand from China and the US - the biggest customer for oil, has made prices sky rocket over 100 percent. The situation was fuelled further by a shortage of refineries. With the US winter having set in already demand is certain to pick up tempo affecting prices again.

The unanimous support sidelined talks about reducing their output for the next few months. There were concerns that oil demand could decline after the first quarter next year but Ali al-Nuaimi, oil minister for Saudi Arabia - OPEC’s most influential member, said there was no cause for concern.

The cartel expected demand to peak at 29.8 million bpd in the first quarter and ease slightly to 27.7 million bpd in the second quarter by which time OPEC could have more control over the prices, members said.

Some members worried that output at current peak levels would result in stock buildup in some customer countries by spring causing prices to fall sharply.

The monitoring committee said the group must keep production at limit for now and meet again in early February to plan further.

Last month, the cartel had created an emergency spare capacity after the recent hurricanes which had disrupted oil production in the US. This spare capacity was not made use of and will expire on Dec 31.