OPEC unlikely to cut production levels, key oil ministers signal ahead of meeting | VailDaily.com
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OPEC unlikely to cut production levels, key oil ministers signal ahead of meeting

VIENNA, Austria – OPEC’s key members said Monday that they would not seek a production cut this week, and that they expected oil prices, now hovering above $60 a barrel, to decline this spring.Kuwait’s energy minister, Sheik Ahmed Fahd al-Ahmed al-Sabah, said oil prices should begin to fall next month assuming the Organization of Petroleum Exporting Countries maintains output at current levels and geopolitical tensions do not worsen. OPEC, which pumps about a third of the world’s oil, meets Wednesday in Vienna.OPEC’s official output target is 28 million barrels per day, though that does not include Iraq, which adds an additional 1.5 million barrels per day. Al-Sabah said there will be an “oversupply” of 1.5 million to 2 million barrels a day in the second quarter.Saudi Oil Minister Ali Naimi said in a newspaper interview with the pan-Arabic newspaper Al Hayat that his country also opposed production cuts.But Venezuela’s oil minister, Rafael Ramirez, said last week that OPEC members should consider cutting production by 500,000 to 1 million barrels of crude a day. The South American country is one of the group’s most strident voices in favor of constraining output to keep prices high.Light sweet crude for April delivery fell 77 cents to $62.90 a barrel in morning trade on the New York Mercantile Exchange.”I think an OPEC price ceiling of $40-$50 a barrel is favorable for the organization’s members,” Shamkhi Faraj, a top Iraqi oil official, told reporters Monday before leaving Baghdad for Vienna. He, too, predicted the production ceiling would remain unchanged.Iran’s OPEC governor, Hussein Kazempour Ardebili, also suggested the group was unlikely to raise the ceiling and urged member producers to demonstrate an “observance of discipline” by not pumping above their quotas.Ardebili told the unofficial ISNA news agency that Tehran’s escalating standoff with the West over its suspect nuclear program would not affect its exports of crude, saying Iran would continue to serve as “a stable source of supply and as one of the main suppliers of oil to the world.”His comments came as the International Atomic Energy Agency’s 35-nation board convened a meeting in Vienna, amid threats by Iran to begin large-scale uranium enrichment if the U.N. Security Council intervenes.The Iranian nuclear issue has not been the only factor stoking worries about disruptions to supply. Instability in Nigeria and the threat of terrorist attacks on pipelines in the Middle East – including the Feb. 24 bombing of the world’s largest oil-processing complex, Saudi Arabia’s Abqaiq facility – also have helped keep prices high.”No doubt that what keeps the oil prices at the current level is instability, and the political situations in the areas of the oil-producing countries affect the markets,” Naimi said, but he cautioned: “there is no fear that oil will not be available.”Although the group is not scheduled to meet again until early June in Caracas, OPEC President Edmund Daukoru said Monday that members might meet informally in late April on the sidelines of an International Energy Forum session in Doha, Qatar.—Associated Press reporter Diana Elias in Kuwait City contributed to this story.—On the Net:www.opec.org


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