OPEC to allow oil stocks to build over next 3 months: president

Kuwait City  (Platts)--21Dec2005

OPEC President Sheikh Ahmed Fahed al-Sabah said Wednesday the producer
group would allow consumer stocks to build over the next three months to meet
winter demand and would review supply at a Jan 31 meeting in Vienna. 
    "We are allowing the stocks to build up. This is what I mentioned last
month. For that we believe that the stocks will build up on a daily basis to
about between 54 and 55 days over the next three months," he told reporters at
Kuwait airport before flying to China at the head of a large delegation of
senior OPEC and Kuwaiti oil officials.
    OPEC ministers met in Kuwait City Dec 12 and agreed to hold their official
ceiling at 28-mil b/d but withdrew an offer of 2-mil b/d of spare capacity
that expires at the end of December because there had been no demand for it.
     Sheikh Ahmed, who is also the Kuwaiti oil minister, said that OPEC
expected oil price fluctuations related to weather during the fourth quarter
of this year. "We expect that there will be drops and increases in both
positive and negative ways because this fourth quarter is linked to winter and
the winter this year arrived late. As a result there was an increase then a
decrease...and this something normal for the month. But we expect them
(prices) to remain within a specific range. So far they have not crossed that
range," he added without specifying a price range.
     OPEC dropped a $22=$28/bbl price band earlier in the year and has yet to
say what price it will defend though it is believed the 11-member group would
not allow prices to fall too far below $50/bbl for the OPEC basket, which so
far this year has averaged above that level.
-- Miriam Amie, newsdesk@platts.com

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