VIENNA, 31 July 2003 — OPEC yesterday prepared to keep oil supply limits unchanged, slow post-war Iraqi output preventing any need to tighten the taps, at least until later this year.
President Abdullah Al-Attiyah of Qatar said prices near the top the group’s $22-$28 target range meant OPEC, meeting today, could wait to consider tougher output restraints. “I don’t think OPEC will do anything. I believe we will wait to September to see how the market reacts,” said Attiyah.
OPEC’s strategy of tight market management — today’s meeting is its fifth already this year — has bred confidence among dealers in its ability to defend prices against Iraq’s return. “It’s a straightforward meeting. The economy is recovering which will help demand and there’s no pressure on OPEC from Iraq with the supply situation as it is,” said consultant Yasser Elguindi of New York’s Medley Global Advisers.
Benchmark US light crude yesterday rose six cents to $30.30 a barrel, uncomfortably high for industrialized importing nations as they seek to accelerate economic recovery. An index of OPEC crudes was last valued at $27.18 a barrel. High prices give producers a breathing space until their next meeting on Sept. 24 to see if cuts from limits of 25.4 million barrels a day are needed to make room for Iraq. Brent North Sea crude oil for September delivery edged up three cents per barrel to $28.13.
Meanwhile, the US government said yesterday commercial inventories of crude oil rose a little last week, although a separate private survey disagreed.
According to the Department of Energy, US crude oil inventories climbed 1.0 million barrels or 0.4 percent to 277.3 million barrels in the week ended July 25, when compared to the previous week.
Inventories were down 30.0 million barrels from the same period last year, however, it said. Crude oil imports rose 700,000 barrels to 10.1 million barrels a day, the government said.
Gasoline stocks fell by 3.3 million barrels to 204.5 million on a weekly basis, and stocks of distillate fuel — diesel and heating oil — climbed 2.2 million barrels to 117.4 million. But a conflicting survey by the American Petroleum Institute said commercial crude oil inventories declined by 430,000 barrels to 276.6 million in the same week.
Gasoline stocks fell 2.07 million barrels to 206.3 million while distillate fuel stocks increased 1.9 million barrels to 115.7 million in the week, the report said.
Oil imports rose 1.54 million barrels to 10.54 million barrels per day, the institute said. The crude oil reserves data exclude the 611.9-million-barrel US strategic petroleum reserve, an emergency supply stored in huge underground salt caverns along the coastline of the Gulf of Mexico.