DOHA, 23 March 2004 — OPEC oil producers yesterday wrangled over whether they should delay a planned production cut to cool red-hot oil prices which last week touched a 13-year high. Oil prices have risen steeply since OPEC agreed last month to cut official production quotas by four percent from April 1 to stop supplies building in the second quarter when demand seasonally drops.
Oil prices, however, slid yesterday, traders said. The price of benchmark Brent North Sea crude oil for May delivery fell 68 cents per barrel to 32.58 dollars in late trading here. New York’s reference light sweet crude April contract slumped 83 cents to 37.25 dollars in early deals.
OPEC ministers will meet on March 31 in Vienna to review policy. A senior OPEC delegate told Reuters yesterday the producers’ group may consider delaying a reduction of one million barrels of daily production until June.
United Arab Emirates’ Oil Minister Obaid Bin Saif Al-Nasseri said the idea, along with other options, would be discussed at next week’s OPEC meeting in Vienna. “The idea (of delaying the cut) will be submitted along with other ideas for discussion at OPEC’s ordinary ministerial meeting on March 31 in Vienna,” Nasseri told reporters in Abu Dhabi.
Qatari Oil Minister Abdullah Al-Attiyah said yesterday he would not support any move by OPEC to postpone its agreement. “I don’t support the postponement of the cut,” Attiyah told Reuters. “I have never heard the suggestion from any member and I don’t support the postponement.”
Crude last week hit the highest closing price in 13 years on rising Chinese consumption, low US fuel inventories and fears of attacks that could disrupt oil supplies. Algeria’s Energy Minister Chakib Khelil said he was worried about high crude prices but that there was little OPEC could do to stop prices rising.
“Of course we are concerned, as much concerned by high prices as by low prices,” Khelil told Reuters. “We can’t do much to stop prices going up further. We are overproducing above our quotas, most of us. Assuming we are producing at top capacity and prices are remaining high it must be for other reasons,” Khelil said.
Ali Al-Naimi, oil minister for OPEC’s leading producer Saudi Arabia, at the weekend blamed high prices on speculators and low US gasoline stocks. Naimi said it was not clear if OPEC would delay the cut. “I don’t know. At the moment no one is in a position to say,” Naimi told Italy’s Il Sole 24 Ore in an interview.
OPEC’s reference crude price has been above the group’s $22-28 a barrel price band almost continuously since December and was last valued at $33.01 a barrel.