OPEC Likely to Keep Oil Output Steady
OPEC is likely to keep oil output unchanged and tighten discipline with existing quota limits when it meets Tuesday in Algiers, according to Algerian Energy Minister Chakib Khelil.
“Maybe the decision will be one of consensus where we go for maintaining production at the current level with more discipline to respect the current limits,” Khelil said.
His comments over the weekend are the clearest signal yet that OPEC does not want to risk angering consumer nations by cutting output at the meeting, despite its concerns about a seasonal drop in fuel demand during the second quarter.
Other members of the Organization of the Petroleum Exporting Countries -- including the cartel’s No. 2 producer, Iran, and group President Purnomo Yusgiantoro of Indonesia -- have backed Khelil’s position.
Oil rose to $36 a barrel for U.S. crude last month, the highest price since just before the U.S. invasion of Iraq last March. Prices since have eased, valuing U.S. crude at $32.48 a barrel, down 60 cents, on the New York Mercantile Exchange on Friday.
“Prices are fairly high. Even if they have fallen in the last few days, they are still high,” Khelil said. “The high prices are explained by the effects of speculation and probably the stock levels, which are fairly low.”
Oil analysts say OPEC would be content to see prices ease a little further and can afford to wait until its next meeting, scheduled for March 31 in Vienna, to consider acting again on output restraints.
