VIENNA, 14 September 2004 — Qatari Oil Minister Abdullah Bin Hamad Al-Attiyah said here yesterday there will be neither a shortage of oil nor a crisis in the market, adding that OPEC was producing almost at its maximum capacity.
“I don’t think there will be a crisis or a shortage of oil in the market. We don’t see any crisis,” Attiyah said after arriving in Vienna for a ministerial meeting of the Organization of Petroleum Exporting Countries tomorrow.
“When we talk about capacity... I believe OPEC almost... that they are producing the maximum,” he told reporters. “The quotas are not an issue.”
Attiyah said it was not demand but psychological factors that had pushed the oil price up to around 40 dollars a barrel.
“If you start to talk about why there is a high price... everybody knows today the high price is not related to demand and supply but is related to fears...,” he said.
The minister said it was unlikely there would be a decision at the meeting to change OPEC’s official production ceiling of 26 million barrels per day, despite the fact the oil producers are pumping over three million barrels more than that to keep up with current demand.
“In my opinion today this is not the issue. The issue with the oil is the market. The message to the market is that the oil is there.”
Attiyah said the meeting was more likely to focus on adjusting the OPEC price band - which stands at $22 to $28 - to bring it more in line with the current reality of the market. “There is a consensus to study the (price) band. There is a lot of talk about it,” he said.
The price band ranges a few dollars above and below what OPEC considers the correct price for a barrel of oil, and several OPEC players have said it needs tweaking because of the price spike.
Attiyah said a price band of $28 to $30 would set a price that was good for both consumers and producers.
OPEC discussed its price band in February and referred the matter to a strategic committee which is due to report back to the organization shortly, possibly during this meeting.
The Qatari minister however left some room for doubt that the cartel was ready to act. “We will see what the strategic committee recommends... if they are ready but I doubt it.”
OPEC is eager to show at this meeting that is it trying to stabilize oil prices but analysts say that having already maximized production in August there is little more it can do to calm the markets.
Meanwhile, oil prices surged yesterday as Hurricane Ivan threatened production and import activities in the Gulf of Mexico, putting new strains on already tight supplies, traders said.
The price of benchmark Brent North Sea crude oil for delivery in October jumped $1.25 to $41.45 a barrel in late afternoon trading.
New York’s reference contract, light sweet crude for delivery in October, climbed $1.18 to $43.99 in early deals.
