OPEC Not Contemplating Oil Production Cut as a Group
LONDON (Dow Jones Newswires), June 26, 2008
The Organization of Petroleum Exporting Countries isn't contemplating decreasing oil production as a group despite comments in recent days by the head of Libya's oil policy that a cut could be warranted, an OPEC delegate said Thursday.
OPEC members met informally in Jeddah at the weekend during a summit of oil producing and consuming nations hosted by Saudi Arabia and reaffirmed that they would take no formal action as a group on whether to change output levels until September, the OPEC delegate told Dow Jones Newswires.
"We will discuss (any change in output) in September at the next meeting," the delegate said.
Shokri Ghanem, chairman of Libya's National Oil Corp., said Saturday that the oil market is currently saturated, and that Libya actually "sees a possibility for a decrease in production." Ghanem reiterated similar comments Thursday in a telephone interview with Bloomberg.
"I can't say what Libya is going to do," and Libya hasn't directly conveyed any intention to cut production, the delegate said, but added that any such move wasn't indicative of a broader agreement among the 13-member producer group.
In Jeddah, Saudi Arabia announced for the second time in as many months that it was raising its oil production - this time by 200,000 barrels a day to reach 9.7 million barrels a day in July. That followed a 300,000-barrel-a-day hike announced in May.
"Some (other OPEC members) were not happy" about Saudi Arabia acting unilaterally outside of the group and disagreed that there was a need for more oil at present, the delegate said.
The delegate added that in the current oil market, the weakness of the U.S. economy and dollar were "causing more trouble than the supply-demand balance."
Copyright (c) 2008 Dow Jones & Company, Inc.
- OPEC Sends Strongest Signal Cuts Will Be Extended to End-2018 (Oct 19)
- World's Biggest Oil Traders See Wildly Diverging Crude Price (Oct 19)
- OPEC's Output Curbs Squeeze World's Biggest Oil Refining Complex (Oct 16)