OPEC unlikely to raise output ceiling for now: Qatar's Attiyah
Paris (Platts)--20Apr2005
Qatari oil minister Abdullah al-Attiyah said Wednesday he believed OPEC was unlikely to adjust its crude output ceiling of 27.5-mil b/d for the time being, adding it was too early to predict what action the cartel might take at its next meeting in June. OPEC is currently supplying more oil than the market needs, and rather than being refined much of this oil is going into stocks, which are at their highest level since 2002, Attiyah said. "Now I am confident we don't have to increase another 500,000 b/d. Production is more than demand, a lot of oil is going not to refineries but to inventories," he told reporters in Paris. "OPEC is almost producing the maximum....most OPEC members have no spare capacity," he added. Attiyah said he was "confident" oil prices would not reach $80/bbl or $100/bbl as some analysts have predicted, and said he did not believe the world was facing another oil price shock. "My answer is no. The market is very balanced, inventories are at the highest [level] since 2002 so it means more oil on the market than we expected," he said. The Qatari minister reiterated that he believed $40-50/bbl was a fair target price for oil. "For me, I always said $40-50/bbl is my target," he said. He also sidestepped several questions on whether he thought there would be room for an OPEC output increase later in the year. At their meeting in Isfahan last month, OPEC ministers raised their combined production ceiling by 500,000 b/d to 27.5-mil b/d and gave the group's president, Sheikh Ahmed Fahed al-Sabah, the authority to coordinate a second 500,000 b/d increase in quotas if necessary. Earlier this month Sheikh Ahmed said the second increase would likely be implemented in May and that he had started consultations with other ministers. Sheikh Ahmed said Monday, however, that OPEC would likely raise output unofficially by 500,000 b/d in May but defer any decision on a possible change in quotas until the Jun 15 meeting in Vienna. Attiyah said he had not been contacted by Sheikh Ahmed about a possible quota increase. "Still I never received his call though my mobile is on," he said. Read more about OPEC in Platts Guide http://www.platts.com/Oil/Resources/News%20Features/opec/index.xml
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