Qatar objects to ‘unjustified’ hike in crude output
Vienna, September 18:
Qatar’s oil minister Abdullah bin Hamad al-Attiyah warned today that Organisation of Petroleum Exporting Countries (OPEC) shouldn’t raise production just for “increase’s sake,” saying there were indications that oil prices were decreasing because of low demand. Ministers from the OPEC will meet tomorrow in Vienna to discuss ways of stabilising the market after Hurricane Katrina drove prices to new highs — including possibly raising the group’s production ceiling by two per cent. The group is widely expected to increase the production ceiling by 500,000 barrels a day (bpd). But previous OPEC moves have done little to ease market fears over supply, and any increase is widely regarded as meaningless because it merely sanctions existing production.
Saudi Arabia’s oil minister Ali Naimi has said he supports a ceiling hike, but that he also did not see demand for more crude. He did not specify the size of the increase. “We’ll listen to the Saudi proposal but we shouldn’t increase just for increase’s sake,” al-Attiyah said today in Doha, Qatar. Al-Attiyah said the problems with US refineries being offline since Katrina hit were temporary, but the capacity “will take a few months to get back to full production. If there’s no demand, how will that affect prices?”
OPEC president Sheik Ahmed Fahd Al Ahmed Al Sabah said in comments published today that he supported an increase in production quotas, despite fears about a glut. “There are fears in the oil markets of supplying the markets with crude despite the existence of a large surplus,” he said in remarks published by the Kuwaiti daily Al-Rai Al-Aam. “There are quantities that the markets can’t absorb and that don’t have a buyer,” said Al Sabah, who is also Kuwait’s oil minister. However, he reiterated that OPEC will try to stabilize prices. “We will do whatever we can at this meeting, including suggesting a 500,000 barrel-a-day increase,” he said.