VIENNA, 5 March 2008 — OPEC ministers gathered in Vienna are inclined to keep output steady, but are on alert for signs record high oil and economic slowdown could erode demand.
The price of US crude hit a record $103.95 on Monday and was trading above $102 a barrel yesterday.
OPEC has said costly fuel has been driven by factors beyond its control, such as a weak dollar and speculation, and not by any lack of oil.
President of the Organization of the Petroleum Exporting Countries Chakib Khelil raised the possibility of an oil output cut, which he said he favored as Algerian oil minister.
But most other ministers have said they see the producer club most likely holding output steady at Wednesday’s meeting.
“I think there is no choice but to roll over,” said Qatari Oil Minister Abdullah Al-Attiyah.
“The market is very stable despite the slowdown in demand during the second quarter. I don’t think a cut is on the table.” Ministers are expected to call another meeting soon and to keep monitoring the impact of a US-led economic slowdown and a seasonal decline in oil consumption.
“The economic slowdown in the United States definitely has an effect on world economic growth, which will have an impact on world petroleum demand this year,” said Khelil. The exporter group’s 13 members, who pump more than a third of the world’s oil, could have an opportunity to assess the market at producer-consumer talks in Rome on April 20-22, he said.
OPEC’s most influential member, Saudi Arabian Oil Minister Ali Al-Naimi, has made no public comment since his arrival in Vienna on Monday.
Speaking before leaving Tehran, the oil minister of Iran, OPEC’s second biggest producer, said he would support a cut in output because the market is well-supplied. But on arrival in Vienna, Gholam Hossein Nozari refused to be drawn, saying OPEC would consider all the factors that affect the market.
A no-change decision would mark a re-run of OPEC’s last session on Feb. 1 when it again held output steady.
But a major difference between then and now is that the oil price is around $10 a barrel higher.
Consumers, led by top fuel burner the United States, have called for an increase in output to try to halt the rally, which they see as dangerous to a fragile world economy.
Some market players have also said more oil could have a calming effect.
“I think no change is factored in. An increase would I think lead to larger stock builds in Europe and the US and I think would make for lower prices,” said Christopher Bellew of Bache Commodities.
A senior Gulf OPEC delegate told Reuters the market was adequately supplied and predicted rising stocks following the end of winter.
“It’s (the stock build) going to be more than 1 million barrels per day during the second quarter, which is the normal pattern. There seems to be no need for a change in output at this time,” he said.