OPEC president sees group keeping output over 30-mil b/d

UPDATE: OPEC president sees group keeping output over 30-mil b/d

Brussels (Platts)--9Jun2005


OPEC is set to maintain actual oil production at more than 30-mil b/d after a
meeting next week in a bid to stabilize prices, and may need to raise output
in the third quarter to meet rising demand later this year, the group's
president said Thursday. 

"It looks like everybody is supporting continuing with our actual production,
which is over 30-mil b/d," Sheikh Ahmed Fahed al-Sabah said in Brussels. "In
the third quarter, we also have to raise our production preparing for the
fourth quarter." The comments come before a meeting later Thursday between
officials from OPEC and the European Union to discuss oil prices and before
OPEC meets to review policy Jun 15 in Vienna. Sheikh Ahmed earlier this week
said he would propose raising OPEC's formal output ceiling by 500,000 b/d to
28-mil b/d should crude prices remain near current levels. "Maybe increasing
the ceiling of our production at this meeting in Vienna for another 500,000
b/d will give the market a positive signal to stabilize the prices," he told
reporters.

A quota increase would "show there is a serious willingness from OPEC to
secure the supply for the third quarter and the fourth quarter," the OPEC
president said. Talk of an increase emerged at the weekend after crude rose
above $55 in the US Friday and after the European Commission said it planned
to ask OPEC to raise production. 

Indonesian Oil Minister Purnomo Yusgiantoro said he would like to see output
rise, though Nigeria and Libya have called for keeping quotas unchanged. With
prices above $50, most OPEC members have been flouting their formal output
targets. The 10 members bound by a 27.5-mil b/d quota are pumping 28-mil b/d,
OPEC's acting secretary general, Adnan Shihab-Eldin, said Wednesday in
Brussels. Thursday's talks will be the first of a planned dialog between top
officials of OPEC and the EU. Andris Piebalgs, the EU energy commissioner, and
Jeannot Krecke, energy minister of Luxembourg, which currently holds the EU
presidency, are scheduled to attend the talks, as will ministers from the UK
and The Netherlands.

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