VIENNA (AFP) — OPEC ministers might debate whether pumping more oil would help revive the world economy when they meet here even though ministers favoured no change, the cartel's chief said on Thursday.
US President George W. Bush recently called on the Organisation of Petroleum Exporting Countries to increase output at its production meeting in the Austrian capital due Friday, to help reduce high oil prices which he claims are weighing on an already weak economy.
The price of New York crude had hit a record high of 100.09 dollars a barrel on January 4. On Thursday it fell to 91.21 dollars, but was still almost double the level of a year ago.
Asked by journalists on Thursday whether there could be a debate at OPEC's upcoming meeting on whether to raise output or keep production steady, OPEC President and Algeria's Energy Minister Chakib Khelil replied: "Yes."
Some members of OPEC, which produces 40 percent of world oil, were "more sensitive to political pressure", Khelil said, in an apparent reference to the Gulf States and Saudi Arabia.
Nevertheless, he himself believed that "an increase would not help the economy."
OPEC had "already done what we could have done in September when we increased production by 500,000 barrels per day. It did not really have an impact on oil prices, because of other parameters," such as speculative buying, Khelil said.
OPEC's job was to meet demand, not regulate prices, Khelil said.
Furthermore, demand for oil was likely to fall soon, he suggested.
"In the second quarter we are going to see lower demand."
Khelil, who currently heads OPEC, said the cartel should opt for a "roll-over and wait until March to see what happens."
Roll-over means holding production steady.
A cut in production to boost oil prices -- as some analysts have begun to speculate -- was out of the question, he added.
"It's not possible," Khelil said.
Other OPEC ministers have indicated that the cartel would agree to no change on Friday.
Speaking in Brussels on Thursday, Iraq's Oil Minister Hussein Shahristani told reporters: "For this time I don't think there will be any revision of production.
"We don't think there is a shortage on the oil market. There is no need to increase production," Shahristani said after a breakfast meeting with EU External Relations Commissioner Benita Ferrero Waldner.
On Wednesday, OPEC kingpin Saudi Arabia, the world's biggest crude producer, voiced satisfaction at the present levels of crude supply and demand, while other key members said they did not believe there was a need to change output.
"The fundamentals are sound," Saudi Oil Minister Ali al-Nuaimi had told reporters, as he expressed his views about the current demand and supply situation for crude oil.
Libya had said on Wednesday it did not believe there was a need to change the 13-member group's official daily output of 29.67 million barrels at the upcoming get-together.
Oil analysts have argued that OPEC is concerned that oil demand and prices may fall sharply should there be a US recession.
On Wednesday, the US Federal Reserve trimmed its key interest rate by a half-point to 3.0 percent -- its second cut in eight days to help the world's biggest economy that some say is on the brink of recession.
The action came a week after an emergency cut of 0.75 percentage points.
Lower borrowing costs would "help the economy a little bit," Algerian minister Khelil said.
OPEC's meeting on Friday is an 'extraordinary' get-together that was scheduled at its last official gathering on December 5 in Abu Dhabi.
There, OPEC decided against increasing production, insisting the market was well supplied and that high prices were caused by speculative activity, not a reaction to the actual demand and supply situation.
OPEC comprises Algeria, Angola, Ecuador, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
Iraq is the only member without an output quota owing to unrest in the country, while analysts say OPEC is in fact producing above its official ceiling by about 180,000 barrels of oil each day.
Copyright © 2009 AFP. All rights reserved. More »
