Saudi Arabia's Naimi reiterates support for OPEC quota increase

Vienna (Platts)--13Jun2005

Saudi Arabian oil minister Ali Naimi Monday reiterated his support for an
increase in OPEC's current ten-member crude output ceiling of 27.5-mil b/d.
Arriving in Vienna ahead of Wednesday's OPEC meeting, Naimi, when asked if
Saudi Arabia was ready to raise its own crude production, said he was
supporting an increase "about the ceiling." 

The Saudi minister said on Saturday during a visit to Norway that he was ready
to support a plan to raise the group's output ceiling to lower crude prices.
OPEC President Sheikh Ahmed Fahed al-Sabah has said he would propose a 500,000
b/d increase in the producer group's ceiling to bring output more closely in
line with the real production levels. But Naimi said current high oil prices
were not caused by a lack of supply. "What is driving the price is not supply.
What is driving the price is the lack of refining capacity worldwide," he told
reporters. "Everybody is concerned about distillates," he added.

"OPEC has the responsibility of providing the oil...which we have done well,"
Naimi said. Saudi Arabia, currently pumping some 9.5-mil b/d of crude, is
prepared to increase production to 10-mil b/d if there is demand for
additional barrels, he said. "We can, but will depends on demand." "Where are
the customers?" he said. Naimi added he was not concerned that stocks might be
building too fast. "No, no , no, we have no concerns," he said. 

The US and the European Union are encouraging OPEC to raise output to lower
crude prices which last week rose to within a few dollars of April's all time
high of $58.28/bbl before falling back. In out-of-hours electronic trade July
WTI futures on the New York Mercantile Exchange stood at $53.30/bbl at 1100
GMT, down 24 cts from Friday's settlement. On Saturday Naimi said he believed
prices were "a little bit on the high side," and that Saudi Arabia was ready
to tap its 1.5-mil b/d spare capacity if needed.

Read more about OPEC in Platts OPEC Guide
http://www.platts.com/Oil/Resources/News%20Features/opec/index.xml

Copyright © 2005 - Platts

Please visit:  www.platts.com

Their coverage of energy matters is extensive!!.