VIENNA, 31 January 2006 — OPEC oil ministers gave strong support to keeping output near a 25-year high yesterday as worries over supplies from Iran, Nigeria and energy powerhouse Russia outweighed forecasts for lower demand in spring. The group that pumps over a third of the world’s oil meets here on Tuesday to plan production for the next few months. The result looked a foregone conclusion with oil above $67 a barrel, within sight of August’s $70.85 record high. “It’s going to be I think an easy meeting, probably more likely than not a rollover,” United Arab Emirates’ Oil Minister Mohammed ibn Dhaen Al-Hamli told reporters.
Iran’s dispute with the West over its atomic program may jeopardize exports from OPEC’s second biggest producer and rebel attacks have cut deep into supplies from OPEC member Nigeria. A sharp fall in Russian energy exports has added to consumer nations’ sense of vulnerability. The world’s biggest energy user the United States has told OPEC it needs to pump more oil not less, US Energy Secretary Sam Bodman said earlier this month. The world’s big economies fear high energy prices will hurt growth.
Analysts say OPEC has little room to maneuver, despite evidence there is plenty of oil to satisfy peak winter demand and there may be too much in the warmer second quarter.
Any disruption to Iran’s 2.4 million barrels day of oil exports would blow a hole in those forecasts. “(At our meeting) in December we decided to come here and to cut but now we’re changing. I have learned a new lesson - don’t predict,” Qatari Oil Minister Abdullah Al-Attiyah said. OPEC has been pumping close to 30 million barrels per day for months but oil prices remain stubbornly high. Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi said the world’s biggest exporter saw “absolutely” no need for a cut this entire year. Fellow OPEC states Kuwait, the UAE, Nigeria, Libya, Algeria, Indonesia and Venezuela want the taps to stay open for now. None of the ministers in Vienna have said they are pushing for a cut.
Meanwhile, world oil prices rose yesterday. New York’s main contract, light sweet crude for delivery in March, increased 34 cents to $68.10 per barrel in pit trading. In London, the price of Brent North Sea crude for March delivery added 12 cents to $66.36 per barrel in electronic deals.
