No OPEC Members Pressing for Output Cuts

AP on Yahoo ^ | 1/29/05 | Andrea Dudikova - AP

[NormsRevenge]

VIENNA, Austria - Homeowners hoping for a break on high winter heating bills got no reassurance Saturday from OPEC (news - web sites), whose members arriving for a key meeting expressed little alarm at prices hovering around the $50 a barrel mark.

Most member countries see no need to change oil output and none is arguing for cuts despite concerns about the high prices and an oversupply, said Sheik Ahmad Fahd al-Ahmad al-Sabah, Kuwait's oil minister and the president of the Organization of Petroleum Exporting Countries.

"Almost all the members support the idea to keep the same ceiling of our production without any change" at Sunday's gathering in Vienna, said al-Sabah.

OPEC appears ready to put the issue off until its next meeting in Iran in March, al-Sabah added, but he said members were closely monitoring prices and weighing their options.

Delegates arriving in Vienna said they were concerned about increased petroleum inventories among OPEC members, who account for about a third of the world's oil production.

Qatar's oil minister, Abdullah bin Hamad al-Attiyah, said the main concern was to study the current market situation and the balance between supply and demand.

"We will send a message to the market that there will be no shortage of supply," he said.

Saudi Arabia, the world's largest oil exporter, is expanding its production capacity, confident the global economy and oil demand will continue to grow despite prices near $50, Saudi Oil Minister Ali Naimi said Saturday.

"The world economy has grown so big, a little fluctuation here and there won't hurt it," Naimi told reporters in Vienna. "The world's going to need every barrel that can be produced."

Indonesia is uneasy over the high price of oil and wants to see OPEC keep its output unchanged, the country's oil minister said Saturday.

"We're not that comfortable with $50 oil. We prefer levels of around $35," Indonesian Oil Minister Purnomo Yusgiantoro said in Davos, Switzerland, where the World Economic Forum (news - web sites) was meeting.

"We have a dilemma. We see a one to one-and-a-half million barrel-a-day drop in second quarter demand, but on the other side we see prices getting stronger," Purnomo said.

But Mohammed bin Dhaen al-Hamili, oil minister for the United Arab Emirates, said current prices are "just a little bit on the high side."

Edmund Dakouru, the oil adviser to Nigeria's president, agreed that the high price of oil "is not really affecting the world economy."

"The position we are now in is very different to this time in 2004, when everyone was more concerned about the state of the U.S. economy," he said Saturday. "I believe that we should maintain things as they are for now. I feel that the cold winter could keep prices up."

Analysts also pointed to the second quarter as the time for new cutbacks.

"That's certainly the consensus view," Adam Sieminski, an oil price strategist with Deutsche Bank in London, said Friday. "There is some possibility they might want a small token cut in April."

A new price band would likely be discussed this weekend, he said, but any decision won't come until the cartel meets again in March in Iran.

At its last meeting in December in Cairo, Egypt, OPEC agreed to cut production by 1 million barrels a day this month to push output down to its self-imposed target of 27 million barrels a day. OPEC is currently producing about 29.6 million barrels a day.

[satchmodog9]

just a little bit on the high side."


Just a bit.

[NormsRevenge]

Local prices here in San Jose had dipped to a low range of 1.75 to 1.80 recently, But it kicked up a bit the last couple of weeks as the oils price went up again.

With China becoming the market hog of oil and new alliances being formed around the globe, we are knee deep in doo doo..

[The Great RJ]

The last thing OPEC wants is major production cuts. Such cuts would cause the price of oil to skyrocket and economically drive major world economies to seek new energy sources from outside OPEC or tempt some individual OPEC members to cut their own lucrative deals. High oil prices would also mean global recession and drive down the demand for oil in the long term.