VIENNA, April 23: Wary of a worldwide glut of oil with the Iraq war over, Opec is ready to cut production to keep prices in its target range of $22-28 a barrel, Opec ministers said on arriving for a meeting here.
“Tomorrow we will make sure we keep the market where it is in the band,” Saudi Arabian oil minister Ali al-Nuaimi told journalists in Vienna, a day ahead of a meeting in the Austrian capital of the 11-nation Organization of Petroleum Exporting Countries, without the participation of Iraq.
“We are concerned if we don’t take some steps that an oil glut may form in two, three months,” Al-Nuaimi said, with the possibility of Iraq resuming crude oil exports in the near future.
Qatar Oil Minister Abdullah bin Hamad al-Attiyah, who is the Opec president, said he thought there was a surplus on the world market of more than two million barrels per day (bpd).
He said the Opec ministers would “discuss all scenarios” and that all options were open.
Venezuelan Oil Minister Rafael Ramirez said Opec would “talk about the discipline of production,” referring to members’ current quota-busting output.
It was not clear if Opec would take any decisions on Thursday. An Opec source said the meeting was being labelled a “consultative” one.
The ministers “don’t want to be under pressure to take any decision” and could postpone a decision until a regular meeting scheduled for June, the source said.
Opec should move first by getting its members to respect the quota, United Arab Emirates (UAE) Oil Minister Obeid bin Saif al-Nasseri said on Wednesday.
“Obviously there is oversupply in the market,” Al-Nasseri said.
Opec had announced in January an output increase, raising its combined ceiling by 6.5 per cent to 24.5 million bpd, to curb a surge in prices triggered by a strike in Venezuela and the threat of war in Iraq.
Al-Nuaimi said that if the cartel had not increased production in excess of the quota as war with Iraq grew nearer, “prices would have shot up.”
He said that “you have to give Opec some credit, a very big credit,” recalling that analysts had feared as the war approached in March that prices could rocket to 100 dollars a barrel. In fact they had stayed below 40 dollars a barrel.
The problem now was that prices were falling.
Oil prices tumbled on Wednesday on news of a big rise in US crude oil stocks, despite signals from Opec energy chiefs that they were ready to act to avert a glut on world markets.
The price of benchmark Brent North Sea crude oil for June delivery slid $1.11 per barrel to $24.35 in late deals here.—AFP
