OPEC not to raise oil output

Kuala Lumpur, June 11:

The Organization of Petroleum Exporting Countries has no immediate plans to release more oil into the market ahead of its next policy meeting in September, Iran’s oil minister said on Monday.

“Now there is sufficient crude oil in the market, there is no shortage of crude oil,” Iranian Minister of Petroleum Kazem Vaziri Hamaneh said on the sidelines of an oil-and-gas conference in Malaysia.

Commercial oil inventories, including in the United States, “are in a very high level,” he told reporters in remarks that reflect current OPEC thinking that the group wants to see global oil stocks being drawn down more as a way to shore up prices.

Hamaneh said “he cannot predict” if benchmark crude oil prices will rise to record highs.

In July 2006, oil prices hit a record high of US$78.40 a barrel. In Asian electronic trading Monday on the New York Mercantile Exchange, light sweet crude for July delivery was trading at US$64.94 a barrel.

Hamaneh said Iran also has no concrete or immediate plans to supply crude to China’s strategic oil reserves, although he added that “we have discussed that issue.” Hamaneh said Iran is also in the process of signing contracts to expand its own refining capacity. The country, despite sitting on one of the world’s largest crude reserves, is an importer of gasoline.

He added that financing plant upgrades is of “no concern” to Iran - a reference to increasing feedback from the industry that construction costs have soared because of expensive raw material, including metal prices.

Separately at the conference, Malaysian Prime Minister Abdullah Ahmad Badawi said the world has sufficient oil and gas reserves “to meet global needs for many decades to come” - and the key challenge is gaining access to them. Global proven reserves are estimated at about 1.2 trillion barrels of oil, which could last 40 years at the current production rate, while natural gas reserves could last 70 years, said Abdullah, whose country is a leading global exporter of liquefied natural gas and significant regional oil producer.

Abdullah said energy security - both in terms of supply and demand - and climate change are among key challenges facing the energy sector.