LONDON, 28 November 2004 — OPEC oil producers are unlikely to change output quotas at their Dec. 10 ministerial meeting and have no need yet to rein in a supply surge that has begun to ease record prices, Nigeria’s top oil official said yesterday. OPEC has been producing at nearly full capacity in recent months as rising demand strains international supplies.

The group’s production surge has eased prices slightly this month, but not enough to warrant trimming back supply yet, Edmund Daukoru, Nigeria’s presidential adviser on petroleum affairs told Reuters in an interview. “Cutting is psychologically difficult. As for raising, there is a structural problem,” Daukoru said on a visit to London.

US crude prices are still near $49 a barrel, up 50 percent this year, though $6 down from late October’s record high as the highest OPEC production in 25 years rebuilds stocks in consuming nations. The value of OPEC’s reference crude basket has fallen further, reflecting poor demand for its lower-quality crudes, and spurring discussion on whether the organization should rein in some 900,000 barrels per day (bpd) of production over existing quotas. “If the basket were to collapse below $30 there would be alarms. Probably we would cut. Right now, we wouldn’t need to do it. The market is able to take what we are producing,” said Daukoru. The basket was last valued at $39.06 a barrel.

Nigeria wants prices to ease further to protect global economic growth, he added. Low stocks of heating oil in all main consuming centers has fed traders’ concern the prices could spike again if the northern winter is severe. “There are two shades of opinion. One believes that current price levels are okay. The second that we should bring prices down. I belong to the more moderate camp,” Daukoru said. Even so, Nigeria wants OPEC’s reference basket to settle well above the group’s current $22-28 a barrel target band, he added.

Prices have been above the top of the band for the last year and Daukoru concurred with Venezuelan President Hugo Chavez’s call for OPEC to prevent prices falling below $30. “I think the equilibrium price level should be in the mid-$30s for the OPEC basket. $30 should be the floor,” Daukoru said.

The Dec. 10 meeting was likely to defer a decision on changing OPEC’s price target as divergence in views was too wide over what price to aim for, Daukoru said. “We will discuss it but the evidence is not overwhelming one way or the other. There will be a lot of discussion but I don’t think we will take a decision,” he said.

The 10 OPEC members with quotas produced 27.9 million bpd in October compared to a new ceiling of 27 million bpd that came into force on Nov. 1, a Reuters survey found.

Over the last three months Nigeria has been pumping a maximum of 2.5 million bpd, including natural gas liquids, Daukoru said. Nigeria had to ease production at some ageing wells in August to protect facilities.

Meanwhile, Nigeria plans steady crude oil exports of some 2.22 million barrels per day in December, according to cargo loading programs, from about 2.23 million bpd the previous month, traders have said.

Traders who track individual cargo sizes and loading dates for the OPEC producer said December export volumes added to about 68.8 million barrels from 66.9 in November.

Nigeria’s crude oil export volumes do not compare directly with the total output figure cartel members agree to restrain to control prices.