OPEC has no option but to maintain output at current prices: Libya

OPEC has no option but to maintain output at current prices: Libya

Paris (Platts)--15Jun2006

Libya's top oil official Thursday said oil producers' cartel OPEC has no
option but to leave current crude production levels unchanged while prices
hover close to $70/bbl.
"We won't cut the production while prices are at these levels. We don't
want to see the world economy disrupted or affected. We will not accentuate
the problem by cutting the production," National Oil Corporation Chairman
Shokri Ghanem said Thursday.
Ghanem said prices were not being driven by fundamental factors but
instead by political tensions.
"I think prices at these levels are once again because of the
uncertainity in the Middle East, Iran and Iraq. But still there is a
contradiction in the market because there is more supply than demand and
prices still haven't gone down. But we hope prices will stabilize," Ghanem
told Platts in a telephone interview.
Abdullah al-Attiyah, Qatar's oil minister, said Tuesday that while there
was "no magic number" for oil prices at which OPEC would trim output quotas,
he believes the cartel would continue to pump all out so long as price were
higher than $50/barrel.
"At $60/barrel we will not cut," he told reporters following a speech to
the US chamber of Commerce here. He said that OPEC would continue to produce
at current levels even if prices dipped to $$50-$55/barrel.
Attiyah said that OPEC remains worried about the "ups and downs of the
market," which have a negative effect on economies. "We'd like to see a stable
oil price," he said.
OPEC president Edmund Daukoru last week said the group is committed to
long-term oil price stability and is greatly concerned about current high oil
prices which do not reflect fundamentals of supply and demand.
Speaking at the OPEC/EU meeting in Brussels, Daukoru attributed the
current high prices to "refinery tightness, geopolitical developments and
speculative activity."
OPEC was particularly worried about price volatility, he said. "The
situation concerns us greatly," he said. "Fundamentals are in balance and
stock levels are comfortable."
Crude oil rose for a second day following Wednesday's reports of an
unexpectedly large fall in US crude oil inventories. The benchmark Brent crude
contract was trading at $67.63/barrel at 1103 gmt, up 65 cts on Wednesday's
$66.98/barrel settle.
OPEC ministers next meet September 11 in Vienna.
--Jacinta Moran, jacinta_moran @platts.com

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