* No change to output targets seen at this week’s meeting
* Price levels within OPEC expectations
* Libya says market oversupplied, to call for compliance
* Demand should rise in second half, Gulf OPEC delegate says
(releads with Algerian minister comments)
By Alejandro Barbajosa and Simon Webb
VIENNA, March 15 (Reuters) – OPEC does not need to respond to rising oil demand as economies recover until later in the year, Algeria’s energy minister said as he arrived for a meeting which looked set to keep the lid on output from the group.
Asked how OPEC would deal with the demands of a recovering economy, Algerian Energy and Mines Minister Chakib Khelil replied: “We wait until the second and third quarters.”
OPEC also has a further meeting scheduled in September.
“The economy is looking like it is recovering,” he added. “I expect prices to hold pretty well until the end of this year despite the surplus in supply,” he told reporters.
Benchmark U.S. crude futures were trading just shy of $80 per barrel CLc1 on Monday, down from Friday’s $81.24 settlement, pressured by a strengthening dollar and expectations China might tighten credit again. [O/R]
Saudi Arabia has named $70-80 as a fair price for producers and consumers and Libya’s delegate to the meeting, Shokri Ghanem, said in an interview with Reuters on Sunday he thought prices would be between $80-90 this year.
“I don’t think there is any need for any change,” Ghanem said on arrival here. “The market is oversupplied, we are going to call for compliance for everyone,” he added.
COMPLIANCE QUESTION
OPEC last agreed to cut output in December 2008, slashing a record 4.2 million barrels per day (bpd) from production to 24.84 million bpd as the world reeled into recession.
In the past year, rising prices and a hesitant global recovery have encouraged OPEC members to add supply to the market, however.
In February, OPEC delivered just 53 percent of pledged output curbs it agreed in late 2008 — down from 81 percent a year ago.
Ministers are emphasising the need to support existing supply curbs and the issue will be on the agenda this week, even though demand could rise in the second half.
“We need very strong compliance,” Attiyah said. “If we say rollover, it means with existing targets.”
Forecasts from OPEC as well as the International Energy Agency (IEA) and the U.S. government all suggest demand has been better than expected and could continue to rise this year. [ID:nLDE62B127]
Global growth could be 4 to 4.5 percent this year instead of the 3.4 percent predicted in November, the head of the Organisation of Economic Cooperation and Development (OECD) told Reuters in an interview on Monday. [ID:nATH005280]
“The reason why the global economy is going to grow faster is because China and India are pulling very hard,” OECD secretary general Angel Gurria said.
The question for OPEC is whether that growth translates into enough demand to mop up the crude its members are pumping.
One OPEC delegate said current output from the 12-member group was meeting demand.
“If you take the average forecast for OPEC demand, you’re looking at 29.2 million bpd, which is in line with production. That’s an indication that things will be the same until the end of the year,” the delegate said.
OPEC, including Iraq which does not have a quota, pumped 29.28 million bpd in February, a 14-month high, according to a Reuters survey. [OPEC/O]
A senior Gulf OPEC delegate said demand should pick up in the second half.
“The market is well balanced,” the delegate said. “Stocks started going down in the last 2 months,” he added.
Developed countries have shown little appetite for more oil as their economies emerge from recession, leaving oil producers to fight for market share in developing giant China.
For a graphic showing the relationship between OPEC output cuts and the oil price, please see:
(additional reporting by Alex Lawler, Alejandro Barbarosa, Joe Brock in Vienna, Rania el Gamal in Baghdad and Ali Shuaib in Tripoli; editing by William Hardy)
http://uk.reuters.com/article/idUKLDE62E1MV20100315?sp=true
* Price levels within OPEC expectations
* Libya says market oversupplied, to call for compliance
* Demand should rise in second half, Gulf OPEC delegate says
(releads with Algerian minister comments)
By Alejandro Barbajosa and Simon Webb
VIENNA, March 15 (Reuters) – OPEC does not need to respond to rising oil demand as economies recover until later in the year, Algeria’s energy minister said as he arrived for a meeting which looked set to keep the lid on output from the group.
Asked how OPEC would deal with the demands of a recovering economy, Algerian Energy and Mines Minister Chakib Khelil replied: “We wait until the second and third quarters.”
OPEC also has a further meeting scheduled in September.
“The economy is looking like it is recovering,” he added. “I expect prices to hold pretty well until the end of this year despite the surplus in supply,” he told reporters.
Benchmark U.S. crude futures were trading just shy of $80 per barrel CLc1 on Monday, down from Friday’s $81.24 settlement, pressured by a strengthening dollar and expectations China might tighten credit again. [O/R]
Saudi Arabia has named $70-80 as a fair price for producers and consumers and Libya’s delegate to the meeting, Shokri Ghanem, said in an interview with Reuters on Sunday he thought prices would be between $80-90 this year.
“I don’t think there is any need for any change,” Ghanem said on arrival here. “The market is oversupplied, we are going to call for compliance for everyone,” he added.
COMPLIANCE QUESTION
OPEC last agreed to cut output in December 2008, slashing a record 4.2 million barrels per day (bpd) from production to 24.84 million bpd as the world reeled into recession.
In the past year, rising prices and a hesitant global recovery have encouraged OPEC members to add supply to the market, however.
In February, OPEC delivered just 53 percent of pledged output curbs it agreed in late 2008 — down from 81 percent a year ago.
Ministers are emphasising the need to support existing supply curbs and the issue will be on the agenda this week, even though demand could rise in the second half.
“We need very strong compliance,” Attiyah said. “If we say rollover, it means with existing targets.”
Forecasts from OPEC as well as the International Energy Agency (IEA) and the U.S. government all suggest demand has been better than expected and could continue to rise this year. [ID:nLDE62B127]
Global growth could be 4 to 4.5 percent this year instead of the 3.4 percent predicted in November, the head of the Organisation of Economic Cooperation and Development (OECD) told Reuters in an interview on Monday. [ID:nATH005280]
“The reason why the global economy is going to grow faster is because China and India are pulling very hard,” OECD secretary general Angel Gurria said.
The question for OPEC is whether that growth translates into enough demand to mop up the crude its members are pumping.
One OPEC delegate said current output from the 12-member group was meeting demand.
“If you take the average forecast for OPEC demand, you’re looking at 29.2 million bpd, which is in line with production. That’s an indication that things will be the same until the end of the year,” the delegate said.
OPEC, including Iraq which does not have a quota, pumped 29.28 million bpd in February, a 14-month high, according to a Reuters survey. [OPEC/O]
A senior Gulf OPEC delegate said demand should pick up in the second half.
“The market is well balanced,” the delegate said. “Stocks started going down in the last 2 months,” he added.
Developed countries have shown little appetite for more oil as their economies emerge from recession, leaving oil producers to fight for market share in developing giant China.
For a graphic showing the relationship between OPEC output cuts and the oil price, please see:
For more stories on OPEC’s Wednesday meeting [ID:nLDE62A12D]
(additional reporting by Alex Lawler, Alejandro Barbarosa, Joe Brock in Vienna, Rania el Gamal in Baghdad and Ali Shuaib in Tripoli; editing by William Hardy)
