OPEC unlikely to raise output ceiling for now: Qatar's Attiyah

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.

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