LUANDA: OPEC oil producers said Monday they would seek to curb high crude stock levels at their first meeting in new oil power Angola and played down the prospect of a surge from Iraq’s recovering oil fields.
The organization’s secretary general Abdullah El-Badri said there was a consensus to hold output firm as ministers were happy with the current price of crude, which has been hovering around $75 a barrel.
He told reporters that the powerful members of the 12-member grouping must act to counter the effects of high crude stockpiles, which observers say could weaken the market when demand falls in the spring.
Observers had said ministers at Tuesday’s meeting would have one eye on Iraq’s recovering oil industry.
But Iraqi Oil Minister Hussein Al-Shahristani told reporters he did not expect to tackle the question of production allowances for Iraq, while stressing its special situation as a country recovering from war.
“I don’t expect any discussion on setting quotas or even discussing till we reach the point when there is a significant increase of Iraqi production,” likely in two or three years, he said.
Iraq is currently exempt from the cartel’s system of quotas, which seek to limit production by members in order to stabilize prices.
El-Badri also said a discussion of quotas for Iraq was unlikely to be on Tuesday’s agenda.
“It will come, but not now,” he said. “One day ... we will discuss it and surely we will accommodate them.”
He spoke after arriving in Luanda for the first meeting hosted by Angola, which joined OPEC in 2007 and has overtaken Nigeria as Africa’s biggest crude producer, according to the International Energy Agency, but still suffers from the legacy of three decades of civil war. Angola boosted its international profile when it joined the exclusive 12-member Organization of Petroleum Exporting Countries in 2007, but millions of Angolans still live in poverty and hunger with little access to clean water.
Tuesday’s meeting caps a year of recovery for oil prices, which have more than doubled since the organization set strict quota cuts in the depths of the economic crisis a year ago. “There is a consensus that there is no change” in view for production quotas, El-Badri said, and raising production levels next year is “not on our radar at this time.”
“If you look at the price, very comfortable, but if you look at fundamentals, especially inventory ... the stocks, they are a bit high,” El-Badri said. “So we have to do something about this.”
Compliance with the cuts introduced in January has slipped but observers say that ministers have few real means to enforce it. “I will ask the ministers to comply more” with the quotas introduced in January, El-Badri said.
Oil prices held firm above $73 a barrel on Monday. US crude futures for January delivery, in their final day of trading before expiry later Monday, rose 66 cents to $74.02 a barrel by 1625 GMT, after settling up 73 cents on Friday. The more actively traded February contract was at $74.86. In London, Brent crude was up 33 cents at $74.08.
