Kuwait sees no oil shortage, $90-$100/b is fair price
Kuwait City (Platts)--4Apr2011/520 am EDT/920 GMT
Kuwait believes $90-$100/barrel is a fair price for crude, Farouk
Zanki, the chief executive of state-owned Kuwait Petroleum Corporation,
said Monday.
Zanki said Kuwait would like to see oil prices, currently trading above
$119/b for Brent and above $108/b for WTI, come down to more normal
levels.
He said Kuwait did not see any shortage of oil on world markets.
Kuwait is adhering to its OPEC quota and does not intend to raise output
to make up for the loss of Libyan oil unless instructed to do so, he
said.
"We are complying...sticking to our quota unless otherwise instructed,"
Zanki told reporters on the sidelines of an energy conference, adding
that there was surplus capacity that could be mobilized should there be
a change in OPEC's position.
He said Kuwait's target under an OPEC agreement which came into effect
in January 2009 was 2.22 million b/d.
The country's total output capacity currently stands at 3.4 million b/d,
of which 50,000 b/d is condensate production.
Independent estimates put Kuwait production above 2.3 million b/d. A
Platts survey in March estimated Kuwait's February output at 2.33
million b/d.
Asked if Kuwait was willing to join other Arab Gulf states in raising
its output as Saudi Arabia and the UAE had done to make up for the loss
of 1.3 million b/d of Libyan production as a result of the unrest there,
Zanki replied: "We will if we are instructed to do so. We have the
capacity. We haven't received any instruction yet."
OPEC is not due to meet until June and current OPEC president Iran has
said that it sees no need for an emergency meeting to discuss the recent
spike in oil prices to their highest level since September 2008.
Brent has traded between $118.74/b and $119.75/b so far Monday.
OPEC kingpin Saudi Arabia, however, has boosted its own production to
around 9 million b/d, close to 1 million b/d more than its OPEC quota.
Zanki, meanwhile, said prices were being driven by non-fundamental
factors and added that he hoped this was temporary.
"We know why they [prices] are high...it's not normal...it's not from
the fundamentals of supply and demand. It's mainly from the unrest in
the area," Zanki said, referring to the storm of unrest that has swept
from Tunisia across North Africa and the Middle East.
"We hope it will not last long. If the unrest spreads all over then we
could see very high oil prices," he said, declining to predict how high
prices might rise.
"We are hoping for normal prices...what's normal it's difficult to
tell," Zanki said. "When the price goes up, it never comes back to what
it usually was before."
However, he said, Kuwait believes a fair price for oil is between $90/b
and $100/b.
Asked if he thought oil prices at current levels were dangerous to the
global economy, Zanki said: "It is a cycle, you know. If the price goes
up, I think the recovery will continue. But how high they will reach is
anybody's guess."
--Miriam Amie, newsdesk@platts.com
To subscribe or visit go to: http://www.platts.com
