OPEC chief hopes to reach consensus over output

VIENNA: OPEC appeared split yesterday over whether to cut output to strengthen oil prices, which have fallen sharply this year on weak demand, oversupply, the fragile world economy and the euro zone debt crisis.
The Organization of Petroleum Exporting Countries, which supplies about one third of global oil, was to hold a regular ministerial meeting in Vienna today, with the 25-percent plunge in crude prices since March vexing some members.
Despite divisions within OPEC, Secretary-General Abdullah El-Badri said he was "sure" members would reach a consensus over their collective output today in Vienna, where the group is headquartered.
"We will talk about supply, demand, the balance, the requirement for the remainder of the year," El-Badri told reporters at an energy conference at the Hofburg Palace, on the eve of the output gathering.
Asked if the organization will reach agreement, he replied: "Yes, sure, we can reach it... We have our problems here and there but at the end of the day, we solve our problems."
Ecuador and Libya meanwhile expressed concern that the 12-nation organization was pumping too much oil, but shied away from calling for lower output.
"I think it is oversupplied," Ecuador's Natural Resources Minister Wilson Pastor told reporters.
"There is 1.6 million barrels a day too much production," above the 30-million-barrel-per-day (mbpd) ceiling agreed in December. He said he would ask that OPEC maintain the ceiling on Thursday.
Libya also voiced concern about oversupply which it estimated to be even higher at 1.8 mbpd.
Kuwait's Oil Minister Hani Hussein said OPEC will "most likely" maintain its production, but admitted to differences among members.
Venezuela's Energy Minister Rafael Ramirez said slowing growth in developed countries threatened to provoke a collapse in global oil demand.
"The capitalist system is in a deep crisis. Economic deceleration in developed countries... has turned a collapse in oil demand into a clear and present danger," Ramirez told delegates.
At the same time, however, Iranian Oil Minister Rostam Qasemi warned that a looming oil embargo on Iran would destabilize the global oil market and spark higher prices.
"Unfortunately the issue of imposing sanctions... is being considered by Europe," Qasemi told delegates in Vienna.
"This politically-motivated approach will damage the stability of both the oil market and the world economy," he said.
"Unilaterally imposing sanctions as a means to attain a political objective are imposing constraints on the oil industry. This will result in an unstable oil market and ultimately lead to a sharp swing in the price of oil."
The European Union is preparing to impose an oil embargo on Iran on July 1, unless diplomatic talks over its disputed nuclear program see progress.
The United States will from June 28 penalize foreign financial institutions over transactions with Iran's central bank, which handles sales of the country's key export, from countries it judges are not making sufficient efforts to cut Iranian oil consumption.