OPEC supply should reflect call on OPEC oil
Doha (Platts)--15Nov2011/521 am EST/1021 GMT
OPEC crude supply should reflect the level of expected demand for the
group's oil, which is currently more than 30 million b/d, a senior Gulf
source said Tuesday.
"I think OPEC supply should reflect the call on OPEC oil," the source
said when asked about expectations for action by OPEC ministers when they
meet in Vienna on December 14. Asked to give a figure, he said: "What we are
producing now, 30 million b/d-plus."
A Platts survey of OPEC and oil industry officials and analysts last
week estimated OPEC output at 30.05 million b/d in October.
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The December OPEC meeting is the first formal conference since the
acrimonious June 8 meeting when Iran, Algeria, Angola, Venezuela, Libya and
Ecuador blocked a Saudi proposal, which had been backed by the group's other
Gulf Arab producers, to raise actual estimated output from all 12 members by
1.5 million b/d.
The Saudi proposal would have increased OPEC's formal output level to
30.3 million b/d in line with projections from the group's Vienna secretariat
of higher demand in the second half of the year.
Kuwaiti oil minister Mohammed al-Busairi said at the weekend that he
still believed OPEC needed to increase production.
"It would be logical and sensible to raise production while taking into
consideration the need to avoid a supply glut," Busairi said, quoted by
official news agency KUNA.
He said he stood by the position he had adopted at the June
meeting--that the market needed more oil and that there was a need to
increase production or face an oil price spike.
But Iran, which currently holds the OPEC presidency, wants the group to
uphold the 24.845 million b/d 11-member target agreed in late 2008 when oil
prices were plunging amid a deepening global recession. This target covers 11
members but not Iraq.
Late last week, oil minister Rostam Ghasemi called on those OPEC members
which had boosted crude output to compensate for the loss of Libyan supply to
rein in production now that Libyan output was recovering.
Ghasemi, currently in Qatar for a summit of the Gas Exporting Countries
Forum, has held meetings on the sidelines of the event with his counterparts
from Algeria, Nigeria and Qatar. Iranian oil ministry news service Shana said
Monday that the discussions had covered the latest developments on world oil
markets and issues related to the upcoming OPEC meeting but gave no
The senior Gulf source did not say what he expected from OPEC's December
14 meeting but suggested that three of the countries which had opposed an
increase in June -- Iran, Algeria and Venezuela -- had political and practical
reasons for having done so.
"These three, they have political and petroleum problems," he said.
Crude supply to market from OPEC kingpin Saudi Arabia in October had
averaged 9.48 million b/d, the Gulf source said. When asked whether Riyadh,
which boosted crude production to close to 10 million b/d during the summer
when there was no supply from Libya, planned to increase output again, the
source said: "It depends on the market."
World oil demand is expected to grow by 1.2-1.3 million b/d in 2012, the
source said, adding: "The market can take care of that."
--Kate Dourian, email@example.com