VIENNA: The oil ministers of Saudi Arabia and the United Arab Emirates said yesterday they were receptive to an Opec decision to increase its output quota in an attempt to control soaring oil prices.
Saudi Oil Minister Ali Al Nuaimi, speaking upon arriving in Vienna ahead of tomorrow’s meeting of the Organisation of Petroleum Exporting Countries (Opec), said he would support a decision to increase the group’s output quota from the current 28 million barrels a day level as a way to help consumers.
“We have to discuss it, but support it – absolutely, yes,” he told reporters.
Al Nuaimi gave no indication of the size of a possible increase of output quotas. Saudi Arabia is the largest producer in Opec and the world’s largest exporter.
He said that Saudi Arabia has not seen increased demand for crude.
“We have offered up to 11 million (barrels a day), but have had no response whatsoever,” Al Nuaimi said.
Asked why Opec was considering a quota hike now, Al Nuaimi said market conditions could change ahead of the next scheduled Opec meeting in December.
“You have to look forward beyond today – a lot can happen,” he said.
Opec members might take a decision to increase production to calm oil markets, said United Arab Emirates Oil Minister Mohammed bin Dhaen Al Hamli, speaking in Abu Dhabi.
He said the UAE would support the increase if there was an unanimous decision among the members.
With prices about 50 per cent higher than a year ago and motorists feeling the increase at the gas pump, the ministers have repeatedly said that Opec is concerned and are doing all they can to keep the market well-supplied and prices stable.
Production outages caused by Hurricane Katrina, continued instability in Iraq and the upcoming winter season have put pressure on prices, with crude reaching over $70 a barrel in the aftermath of the storm.
Crude oil futures have dipped. A barrel of light crude settled at $63, down $1.75 cents, in trading on the New York Mercantile Exchange on Friday.
Katrina slammed into the US Gulf Coast, a major oil production hub, at a time when producers worldwide were already struggling to cope.
The storm was blamed for the evacuation of more than 700 offshore platforms and rigs. Several Gulf Coast refineries in Katrina’s path have shut down or reduced operations, taking out 8 per cent to 10 per cent of the nation’s production capacity, according to company and federal reports.
In response, the International Energy Agency this month agreed to release two million barrels a day of crude oil, gasoline and other fuels on to the world market from their strategic stockpiles over the ensuing 30 days. That is equal to about 2.4 per cent of the world’s daily fuel consumption. Crude oil makes up around 65 per cent of the supplies released.
Record high petrol prices led Opec to cut its 2005 world oil-demand forecast by 150,000 barrels a day. In Britain, drivers lined up at retail stations after threats of fuel price protests caused worry about gasoline shortages.
On Tuesday, Britain’s Treasury chief Gordon Brown called on Opec to boost oil production and proposed coordinated international action to stabilise oil markets.
“The first action we must take is to tackle the cause of the problem, ensuring concerted global action is taken to bring down world oil prices and stabilise the market for the long term,” Brown said.     – AP
Last update on: 18-9-2005