NEW YORK, 10 June 2003 — Oil prices hit fresh 11-week highs yesterday as members of the Organization of the Petroleum Exporting Countries gathered for a Wednesday meeting against a backdrop of tight global supply.
US crude oil in New rose 30 cents to $31.58 a barrel, hitting the highest price in 11 weeks after rising 20 percent in barely a month. Brent crude in London rose 20 cents to $27.98 a barrel.
OPEC ministers meeting in Qatar will debate whether they need to cut production to accommodate the expected resumption of Iraq’s oil exports this month. With prices nearly 30 percent higher than the same time last year and Iraq’s exports expected to stay below pre-war limits for up to a year, some OPEC ministers have said there seems to be no need for the group to rein in supply.
OPEC, which controls around half the world’s crude exports, aims to keep prices in a $22-$28 a barrel range for its basket of crude oils. The basket was last valued at $26.77. OPEC will use this week’s meeting to press independent exporters such as Russia, Norway and Mexico to back any supply cuts needed later this year, OPEC President Abdullah Al-Attiyah of Qatar said.
However, the market outlook is far from clear and Attiyah said he was concerned by a possible surplus of oil in the next three months.
“All the analysts are talking about facing a 1.4 million bpd glut by the third quarter,” Attiyah said. “So far I have to share that opinion.”
“We are going to see what measures should be taken: If we should keep things as they are, if we should make an adjustment, a cut. I can’t yet say which,” OPEC Secretary-General Alvaro Silva told Reuters.
UAE Oil Minister Obaid bin Saif Al-Nasseri said he did not rule out a cut, but he thought the group should address a mismatch between quotas and real output levels first.
Meanwhile, Norway, the world’s third biggest oil exporter, said yesterday that it had no plans to cut output and would not automatically match any future measures by OPEC to shore up prices.
“We have no plan for a production cut now — we don’t see any reason for a production cut now,” Oil and Energy Minister Einar Steensnaes told a joint news conference with visiting Venezuelan Oil Minister Rafael Ramirez. He said that current oil prices were “acceptable.” Ramirez came to Oslo as part of an OPEC bid to press non-aligned oil exporters to cooperate with OPEC if it decides to cut output at a meeting in Qatar.
Steensnaes noted Norway cut its 3.0 million barrels per day output in the first half of 2002, by 150,000 bpd, when prices were weak but said that Oslo would not slavishly follow OPEC. Earlier yesterday, Ramirez said that non-OPEC Mexico was ready to collaborate with whatever OPEC decides.