Libya says OPEC can do little to cool oil prices

Libya says OPEC can do little to cool oil prices

Paris (Platts)--8Aug2006

OPEC can do little to cool crude oil prices, currently cresting close to
all-time highs, because most member countries are already pumping at full
capacity, Libya's OPEC governor Tarek Hassan-Beck said Tuesday.
"More than is happening now would be doubtful. Although this process
sometimes can be against the interest of different producing countries, we
want to help stabilize prices and stability in supply so everybody has opened
their taps to the full extent," Hassan-Beck told Platts by telephone from the
Libyan capital Tripoli.
Oil prices soared Monday after BP shut its Prudhoe Bay field in Alaska
because of damaged pipelines, removing 400,000 b/d of crude from the market.
North Sea Brent closed Monday at a new all-time high of $78.30/bbarel,
having earlier traded as high as $78.63/barrel. Crude futures on the New York
Mercantile Exchange broke above $77/barrel Monday for the first time in a
month since just after hostilities broke out between Israel and Hezbollah
guerrillas in Lebanon.
Brent was back below $78/barrel Tuesday in London, trading at
$77.91/barrel at 1218 GMT, although it had earlier traded at $78.38/barrel. At
the same time, US light crude futures were trading at $76.61/barrel, $48 cents
below the $77.09/barrel intra-day high.
BP's decision to shut the Prudhoe Bay field, which it operates with
several partners, removes 8% of total US production and just under 50% of
Alaska's production from the market. While the company would not say when
output would resume, analyst Bruce Lanni of AG Edwards said Monday that it
could take two to three months to bring the field back up.

OPEC COMMITTED TO STABLE PRICES
Hassan-Beck said OPEC remained committed to keeping the market and oil
prices, which he described as "almost dangerously" high, as stable as possible
despite the current volatility.
"We want something stable that we can plan on and account on," he said.
The situation in the market with prices almost dangerously high, was "keeping
everyone on their toes," he said. "We want to have reasonable, stable prices,
no doubt," he added.
While OPEC members are committed to ongoing close consultations,
Hassan-Beck said it was unlikely the group would hold talks before OPEC's
board of governors meeting on August 23 and the ministerial conference on
September 11.
A Platts survey last month estimated OPEC production at 29.95 million b/d
in June.

LIBYAN OUTPUT TOPPED 1.8 MILLION B/D 'A FEW WEEKS AGO'
Libyan crude production is currently averaging between 1.65 million b/d
and 1.7 million b/d, having pumped more than 1.8 million b/d from its 50
producing fields "a few weeks ago," Hassan-Beck said.
The North African producer hopes to increase its crude production
capacity to 2 million b/d by 2007, with a third post-sanctions bid round
expected within the next two months.
It will offer up to 40 onshore and offshore blocks and will be the
country's third oil licencing round since UN sanctions were dropped two years
ago.
The country is seeking to step up energy investment after years of
stagnation as a result of international sanctions. Many multinational oil
companies have been lured to the OPEC member country now that it has shed its
pariah status.
--Jacinta Moran, jacinta_moran@platts.com

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