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Opec starts final meeting ‘to discuss all options’

Opec starts final meeting ‘to discuss all options’
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First Published: Tue, Sep 11 2007. 01 51 PM IST
Updated: Tue, Sep 11 2007. 01 51 PM IST
AFP
Vienna: Opec oil producers are to discuss all options for their production policy at their formal meeting on Tuesday, 11 September, the Qatari oil minister said.
“We will discuss all options,” said Abdullah bin Hamad al-Attiyah as he arrived for a breakfast meeting with his Opec partners.
The oil exporters’ group, which produces about a third of world oil supplies, had previously been expected to leave its output unchanged, but there are signs that members might bend to the will of Saudi Arabia and increase output.
Pressure by the Saudi kingdom has created doubt about the final outcome of the meeting, but investors appeared to be betting on no change, with oil prices higher in Asia early Tuesday.
Ministers arrived at Opec headquarters at around 0800 GMT and began their final meeting to decide on their collective policy, with an announcement expected any time in the next few hours.
A source close in the talks told AFP one option being considered was an increase in the cartel’s production target of 500,000 barrels per day, with Saudi Arabia contributing 350,000 bpd and 150,000 bpd from other members.
The 10 Opec members that are bound by production limits have a target of 25.8 million barrels, but they are estimated to be producing almost a million barrels a day more than this.
Any increase would therefore formalize unofficial production above the output limit, but analysts have said the gesture would help cool prices.
A majority of Opec members have spoken publicly against an output increase, but there are signs that some might be faltering under pressure from Saudi Arabia, notably Kuwait and Algeria.
Opec Secretary General Abdullah el-Badri told reporters that the cartel was aware of the danger of high oil prices, as well as the risk of an economic slowdown linked to financial market instability.
“We’ll look at the problem (of high prices) and see what we can do about it,” he said.
He added: “We are concerned by financial markets.”
Global financial markets have been highly volatile over the last month, sparked by problems in the US housing market which have raised fears of a global credit squeeze and an economic slowdown.
High oil prices have become an added burden for the world economy as it absorbs the financial market turbulence and the crisis in the US “subprime” housing market.
Any proposal to raise output faces stiff opposition from Opec’s traditional price hawks, Iran and Venezuela.
Venezuelan Energy Minister Rafael Ramirez repeated his opposition to an output increase.
“We believe it’s not necessary,” he said.
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First Published: Tue, Sep 11 2007. 01 51 PM IST
More Topics: Opec | Oil | Commodities | output | Saudi Arabia |