OPEC May Boost Output at Oil Over $75

OPEC May Boost Output at Oil Over $75, President Says   

  OPEC may increase production targets in December as oil rises above $75 a barrel, the group’s president said, as the International Energy Agency warned rising prices threaten the recovering global economy.

“We have always defended a position of equilibrium,” Jose Maria Botelho de Vasconcelos, who is also Angola’s oil minister, said in an interview late yesterday.

“Some countries are available to pump more oil into the market and if it comes to be necessary to pump more oil into the market this will be done.” The Organization of Petroleum Exporting Countries will meet Dec. 22 in Luanda, Angola, to review production quotas that it has left unchanged at three gatherings in 2009.

Crude futures have rallied 80 percent this year, trading at around $80 a barrel today in New York. Rising prices harm the economic recovery, according to IEA Chief Economist Fatih Birol.

“With the strong rebound of the economy, we will see high prices, especially at this juncture, as a significant risk to the risk to the recovery efforts,” Birol said in an interview at a Coaltrans conference in London today.

Oil at $100 a barrel would make a supply boost inevitable because “it is necessary to maintain the equilibrium,” de Vasconcelos said. An output increase would depend on whether prices remain at $75 to $80 a barrel, stockpiles return to the five-year average and floating inventories disappear, OPEC’s Secretary-General Abdalla El-Badri said Oct. 22.

Production Quotas The 11 OPEC members bound by production quotas agreed last December to a collective limit of 24.845 million barrels day from the start of this year.

The record 4.2 million barrel-a-day output cut came after oil prices sank 70 percent from their July 2008 peak. Kuwaiti Oil Minister Sheikh Ahmad al-Sabah said Oct. 6 that OPEC is unlikely to change output targets at the December gathering and that it is “impossible” for the organization to raise production this year.

 Saudi Arabia, the group’s biggest member and de facto leader, has yet to express an opinion. World oil prices are rising on “speculation” and on “signs of recovery” in the global economy, United Arab Emirates Oil Minister Mohamed al-Hamli said at a conference in Moscow today.

“I think it is primarily driven by speculators but there is also support for the current surge in oil prices,” al-Hamli said. “We have to wait and see how the world economy recovers” before adding production as the market is “well supplied.”

Global oil demand may rise by 700,000 barrels a day next year after dropping by twice that amount in 2009, he said. OPEC’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. Iraq is exempt from the quota system.  

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