Oil ministers see no need to boost OPEC output for the next three months - NewsOn6.com - Tulsa, OK - News, Weather, Video and Sports - KOTV.com |

Oil ministers see no need to boost OPEC output for the next three months

Updated:

VIENNA, Austria (AP) _ Concerned that the recent surge in oil prices is due more to panic buying than a stronger physical demand for crude, OPEC is all but certain to leave its production target unchanged Friday as it enters a season when oil sales normally ebb.

The Organization of Petroleum Exporting Countries is fearful of undermining its own success in shoring up weak prices by adding more oil to world supplies at a time when the prospects of a global economic recovery are still so uncertain.

The group's representatives were to assess their output policy at a formal meeting at OPEC's headquarters in Vienna.

Qatari Oil Minister Abdullah bin Hamad al-Attiyah told reporters Thursday that much of the recent rise in prices is due to psychological factors. World oil markets have been particularly jumpy about possible U.S. military action against Iraq and the effects such a conflict might have on other oil exporters in the Persian Gulf region.

Some energy analysts shared this concern that the market might be running ahead of itself.

``If you look at the economic data, things are recovering but they haven't recovered,'' said Mike Rothman, an analyst at Merrill Lynch in New York.

Nonetheless, OPEC oil ministers and analysts alike foresee a need for more crude later in the year if seasonal demand perks up as expected during the summer and fall.

Although OPEC welcomes higher crude prices, the group knows that it risks derailing the incipient recovery in key oil markets if it lets prices surge too high too quickly.

``I hope that we will work very hard ... to support the international economy because if the international economy is healthy, I'm healthy too,'' al-Attiyah said as he arrived at a Vienna hotel.

A policy committee of three OPEC members _ Iran, Kuwait and Nigeria _ has agreed to recommend to their fellow partners that OPEC maintain for the next three months its current output target of 21.7 million barrels a day. The committee agreed also that OPEC members should meet again in June to reassess market conditions at that time, Iranian Oil Minister Bijar Namdar Zangeneh told reporters.

The group's 11 members were to consider the recommendations at their Friday meeting.

``I think there is a clear understanding among all of them that they should not kill this recovery,'' said Roger Diwan of The Petroleum Finance Corp., a Washington-based consultancy.

OPEC, which supplies about a third of the world's oil, cut 1.5 million barrels from its daily target in January, in the most recent in a series of output cuts aimed at propping up weak prices.

Recent signs of a rebounding economy in the United States, which consumes one out of every four barrels of oil produced, have helped since then to firm up prices. So too has speculative buying of futures contracts on concerns that a U.S.-led attack might knock OPEC member Iraq out of the export market.

Contracts of U.S. light, sweet crude for April delivery rose 40 cents to settle at $24.56 a barrel Thursday on the New York Mercantile Exchange. In London, April contracts of North Sea Brent crude rose 17 cents to $24.06 on the International Petroleum Exchange.

OPEC's benchmark price for a blend of seven different crudes rose 1 cent to $22.37 a barrel on Wednesday, the most recent day for which the group compiled information.

The OPEC benchmark price had languished since late September at well below the group's desired minimum price of $22 a barrel, until breaking through that psychologically important threshold on Monday.

Obaid bin Saif al-Nasseri, oil minister for the United Arab Emirates, was among those expressing support for OPEC's preferred price of $25 a barrel. OPEC had abandoned that price as unrealistic when the global economy went into its slump last autumn.

However, al-Attiyah of Qatar argued that on the basis of physical supply and demand, a more reasonable price would be $20-$22 a barrel.
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