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UAE oil minister expects no OPEC output change after Venezuela meeting
AP
CAIRO
Petroleumworld.com 05 31 06
The United Arab Emirates' oil minister said Monday he expects the Organization of Petroleum Exporting Countries to maintain current production levels when it meets in Venezuela this week, the official Emirates news agency reported.Mohamed al-Hamili said he expects OPEC to take a decision to maintain production levels at its forthcoming meeting because there is no shortage of supply of crude oil on the market. In April, OPEC pumped 29.8 million barrels per day.
The 11-country producers' group is due to meet June 1 in Caracas.The group's official production target, which does not include Iraqi output, is 28 million barrels per day.
Al-Hamili also said he expects demand for oil to grow in 2006 at the same rate as in 2005 because reports show global economic growth is going be the same as last year.
He said a fair price of oil for both producers and consumers is $50-$60 US a barrel. On Friday, light sweet crude for July delivery on the New York Mercantile Exchange settled at $71.37 a barrel, an increase of 40 per cent from last year.
The average price of OPEC's basket of eleven crudes stood at $65.10 on Friday.
OPEC's spare output capacity stands at two million barrels a day and so the reason behind high oil prices is not a lack of supply but geopolitics and speculation on futures markets in addition to a shortage of refining capacity, al-Hamili added.
The U.A.E. plans to increase its output capacity from 2.6 million barrels per day to 3.5 million barrels per day in the next five years and its refining capacity from 600,000 barrels a day to 1.1 million barrels a day by building a new 500,000-barrels-a-day refinery, al-Hamili added.
AP 29 05 06
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