KUWAIT CITY, 3 May 2005 — OPEC’s president said yesterday that the organization’s members excluding Iraq were producing 29.7 million barrels per day, 2.2 million bpd above the official quota, and there was no immediate need to pump any more oil. “Our latest information is that the OPEC-10 production now is 29.7 million bpd. There is (more than) two million (bpd) over (official) production,” Ahmad Fahd Al-Sabah, also Kuwait’s energy minister, told reporters. “We think the market is well supplied... I think by numbers we already have more than the 500,000 bpd of real production,” he said, referring to a proposed 500,000 bpd increase by mid-May.
“In Isfahan, production was 27.7 million barrels per day,” he said, referring to a March OPEC meeting in Iran. “The market needs real supply and this is what is on the market. Since Isfahan, two million barrels have been added to the market,” Ahmad said.
Asked what would OPEC do if prices continued to slide, he said: “I think prices will continue at this level between 45 to 55 dollars,” for Brent crude. “Yes, we accept less than this,” he said when asked if this was acceptable to the organization. The drop in prices ruled out the need for further discussions on raising output, the Kuwaiti official added.
Ahmad said Kuwait was currently producing 2.7 million bpd and still had “a small spare (production) capacity.”
Oil prices fell further in Asian trade yesterday as the market switched its focus to the possibility that the US economy may be slowing, thus easing pressure on supplies, dealers said. At 0400 GMT, New York’s main contract, light sweet crude for delivery in June, was down 67 cents to $49.05 a barrel after closing at $49.72 in New York Friday where it had lost $2.05.
Meanwhile, the world’s richest oil consuming nations gathered in Paris yesterday for talks aimed at securing supply and limiting economic damage caused by near-record prices amid new signs of torpor in the oil-guzzling Western economy.
The United States, Europe and Japan were among those due to meet under the auspices of the 26-nation International Energy Agency, the energy arm of the OECD, which meets every two years at ministerial level to protect the interests of oil consumers.
Usually seen as a curtain-raiser to the more high-profile meetings at its parent Organization for Economic Cooperation and Development, the IEA’s talks this year are dominated by the kind of dramatic oil price activity which led to its birth in 1974.
Crude oil prices have catapulted to record highs above $58 a barrel this year as surging demand in Asia’s emerging economies pushes world supplies close to capacity. Goldman Sachs bank has warned of a potential “super-spike” to $100 a barrel.
Economists are increasingly blaming high energy costs for what seems to be an unexpected slowdown in the European economy. Those concerns mounted yesterday when it was reported that the manufacturing sector in the euro zone shrank for the first time in a year-and-a-half in April.
