Opec sees no room for oil hike
Experts quash talk of relaxing output curbs
Opec's technical experts who crunched oil supply-demand figures at the organisation's headquarters this week saw no scope for relaxing output curbs at an Opec policy meeting next Thursday, delegates said today.
"We looked at the numbers and an increase would not be appropriate now. The markets are like this because the US is about to attack Iraq," an Opec delegate, asking not to be named, told Reuters.
However, delegates attending the meeting of opec's Economic Commission Board said the United Arab Emirates, Saudi Arabia's closest ally in Opec, presented a case that appeared to back an output increase to prevent any further market share loss by the group.
"The UAE was insistent that we have cut output enough and did not want to lose more market share to non-Opec," a delegate said.
"The UAE argued they did not want Opec to become a marginal producer," another delegate said.
The meeting, which will provide a short-term market forecast to Opec ministers ahead of the 19 September meeting, concluded that the call on Opec oil in the fourth quarter was 25.9 million barrels per day, versus an estimated August output of 25.42 million bpd.
In a typical year, demand outstrips supply in the fourth quarter, trimming inventories which normally build up earlier in the year.
In the third quarter, Opec experts estimated the call on Opec crude, calculated by subtracting non-Opec supply from demand, at 24.8 million bpd.
Oil prices are hovering around their highest level in a year, partly because of fears of war in Opec member Iraq.
The International Energy Agency said yesterday that more oil supply was needed this winter to cover peak demand, but Opec delegates said the IEA demand estimates were too high.
In the first quarter of next year, the board estimated call on Opec crude at 25.3 million bpd, below current output.
"We have seen the numbers from all the sources and an increase is not justified. Opec already has two million barrels over quota," said a delegate.
Although the board does not make recommendations on output policy, another delegate said there was "a general feeling there should be no change in the production ceiling for now."
If need be, the group could convene an extraordinary session in November or December, he said.