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Business

Opec members refuse to change 'balanced' oil production target

Text by News Wires

Latest update : 2010-03-16

Key OPEC member states say the organisation does not need to respond to increasing oil demand by raising its official output target, claiming current oil production levels are "balanced".

AFP- Key OPEC members on Monday said there was no need for the cartel to change its official oil output target owing to the current supply, demand and price situation amid a world economic recovery.
   
The Organization of Petroleum Exporting Countries has no need to "disturb" a balanced oil market, Saudi Oil Minister Ali al-Nuaimi told reporters ahead of the cartel's latest meeting to set production levels.
   
Asked if OPEC should change its official output quota at a meeting in Vienna on Wednesday, Nuaimi, whose country is the cartel's biggest oil producer, said: "Why should we change? The market is in balance, the price is great, inventories are coming down, so why do we need to do anything?"
   
He added: "Based on what we see, everybody's happy with the market. We are extremely happy with the market. The economy is doing well, (and it) will do better down the road. I don't see any reason to disturb this happy situation."
   
The cartel's second largest producer Iran meanwhile said that OPEC should not raise its official output ceiling as there was still no sign of any increase in world demand.
   
"There is no increase in demand in the market and supplies have not decreased much," Oil Minister Masoud Mirkazemi told reporters before heading to Vienna.
   
OPEC, which pumps about 40 percent of the world's crude oil, has an official target level of 24.84 million barrels a day but is producing more than this.
   
The head of Libya's National Oil Company said his country would call on fellow OPEC members at this week's meeting to comply with existing quotas.
   
"There is no need for a change" to the output ceiling, Libyan oil chief Shukri Ghanem told reporters on arrival in Vienna, home to OPEC's headquarters.
   
"The market is over supplied. We are (instead) going to call for compliance," he added.
   
Algerian Oil Minister Chakib Khelil meanwhile dismissed calls for OPEC to raise its official output level to reflect the cartel's real production.
   
"I don't think it would be a good idea," he told reporters.
   
"It would give the wrong signals if we do that."
   
OPEC, a grouping of 12 Middle Eastern, African and Latin American oil producing countries, has had an official output level, excluding production by Iraq, of 24.84 million barrels a day since January 2009.
   
However the cartel pumped out 26.70 million barrels a day in February, excluding Iraq, and 29.24 million with production from the unsettled nation, the International Energy Agency estimated on Friday.
   
OPEC members are keen for greater compliance with the official output quota amid its concern that demand for oil could weaken as governments look to end unprecedented measures that have put countries on a road to economic recovery.
   
Khelil meanwhile predicted that crude prices would "hold pretty well" until the end of 2010.
   
Oil prices slid about 1.50 dollars on Monday but remained close to 80 dollars a barrel -- a level deemed reasonable by OPEC members.
   
Oil prices tumbled from historic highs of more than 147 dollars in July 2008 to about 32 dollars in December in response to the global recession but have since clawed back ground on economic recovery hopes.

Date created : 2010-03-16

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