Opec keeps all options on output open in March

Opec keeps all options on output open in March
Reuters Published: February 04, 2008, 20:19

London, Kuwait City: Senior Opec officials downplayed talk of a change in oil output when the group meets again in a month's time, saying a decision would hinge on the health of the global economy.

The Organisation of Petroleum Exporting Countries agreed at a meeting on Friday to keep output unchanged, but Gulf producer Kuwait acting oil minister Mohammad Al Olaim said Opec would discuss increasing crude oil production levels when its ministers meet in March, the official Kuwait News Agency reported while Iran and Venezuela have suggested a cut may be in order at the March 5 meeting.

"Everything is possible according to the market. We really cannot decide at this time," Opec Secretary-General Abdullah Al Badri told reporters on the sidelines of a London energy conference.

"Come March, we will see what we can do."

The group's president, Chakib Khelil, who is also Algeria's energy minister, said it was premature to predict what Opec would decide in March in Vienna.

"It's too early," he told Reuters.

Al Olaim said Opec was keen to maintain oil market stability and supply the world with enough oil but in response to market needs rather than speculation and geopolitical factors that the group cannot influence.

Nagging at the minds of ministers is the risk of the United States, the world's biggest oil consumer, tipping into recession and eroding demand for fuel.

"We don't know what's going to happen ... We don't know whether the economy is going to pick up or get worse. We don't know what non-Opec is going to do. All of those aspects are going to have an impact on our decision."

The leading Opec producer Saudi Arabia said on Sunday that oil output policy would depend on the level of world oil inventories at the time of the March meeting.

While the latest indicators showed that while global economic growth was retreating, growth in some developing countries such as China and India was providing some balance, Kuwait acting oil minister said.

The United States had raised concerns last month that world markets needed more oil. Oil prices steadied at below $89 a barrel yesterday, after worries over a potential US recession knocked prices three per cent lower late last week.

Comment: Kuwait eyes supply rise

Kuwait acting oil minister said Mohammad Al Olaim said the producer group would review oil markets closely ahead of the meeting, the agency added.

But Iran wants the group to discuss cutting crude oil output at its March meeting, as stocks are expected to increase.

Iran and Venezuela said Opec may need to curb output in March to defend prices against a drop in demand, should the United States slip into recession.