Opec members want to maintain crisis allocation
Organisation of Petroleum Exporting Countries (Opec) members Algeria and Kuwait said on Friday they support maintaining the extra two million barrels per day allocated by the cartel in September to counter hurricane disruption to North American output.
Kuwait’s Oil Minister and Opec’s current chief, Sheikh Ahmad Fahd al-Sabah, also said the cartel will hold an extraordinary meeting in January.
“The position of Algeria is to continue with the two million barrels per day [bpd], we have to work for a stable market,” said Algerian Energy Minister Chakib Khelil upon arrival in Kuwait City to take part in a meeting of members of the 11-nation Opec.
Ahmad voiced a similar position.
“As for Kuwait, I think we should continue to roll over the two million bpd” allocation, which expires at the end of the year, he said.
Both ministers said they supported the renewal of Opec’s production quota, which stands at 28-million bpd, at Monday’s meeting.
Ahmad said the meeting was unlikely to resolve the issue of the optimal price-band mechanism for oil, which hit an all-time high of $70,85 per barrel in New York on August 30 following Hurricane Katrina, which devastated refining and crude production facilities along the US Gulf Coast.
“Maybe we start to discuss the [price-band] mechanism ... but there will be no resolution at this meeting,” he said.
When asked what he thought was a fair price for oil, he said: “I think it is still between $35 and $55” per barrel.
Oil prices shot above $61 per barrel for the first time for more than a month before easing to $60,60 per barrel on profit-taking in New York trading on Friday.
In addition to prices, another concern for Opec ministers meeting in Kuwait will be how to deal with the traditional dip in demand in the second quarter of next year when warmer temperatures return to the industrialised northern hemisphere.
Sheikh Ahmad said he believes issues relating to the second quarter are best left for January’s special meeting.
On Thursday, Qatar’s Energy Minister, Abdullah al-Attiya, had said that the cartel would discuss second-quarter demand at the Kuwait meeting.—Sapa-AFP.