OPEC in agreement on keeping production at near record high

By Deborah Haynes and Zoltan Simon
AFP
VIENNA
Petroleumworld.com 01 31 06

OPEC was Monday set to keep pumping oil at near record high levels at a meeting in Vienna, amid jitters over a nuclear standoff between major producer Iran and the West that have sent crude prices higher.

Saudi Oil Minister Ali al-Naimi, the most influential member of the cartel, said all 11 members agreed on maintaining OPEC's production ceiling of 28 million barrels per day (bpd) for now.

"Yes, yes, absolutely yes," he said, when asked if there was an accord ahead of the Organisation of the Petroleum Exporting Countries' meeting on Tuesday.

Libya's Energy Secretary Fathi Hamed bin Shatwan echoed the statement.
"Everybody knows, I think it will be as it is. No change," Shatwan said as he arrived in Vienna where OPEC ministers have been convening since Saturday.

An influential advisory group, the ministerial monitoring sub-committee, also recommended keeping the status quo.

The comments came against a back drop of stubbornly high oil prices, fuelled by instability fears in Iran and Nigeria.

Naimi, whose country is the world's biggest crude oil exporter, raised the prospect of OPEC maintaining production levels all year.

Asked Sunday if he saw a reason to cut in 2006, he said: "Absolutely not."
Not everyone agrees on this point, however.

Venezuelan Energy Minister Rafael Ramirez said ministers should be prepared to reduce the production limit as early as their next meeting on March 8, voicing concerns over the size of global oil stockpiles.

"Our position is that maybe the best is to wait until March, early in March, in order to cut, something like one million barrels per day," he said.

His words were in line with a call by Iran's OPEC representative Hossein Kazempour Ardebili 10 days ago, who said he wanted such a reduction from April.

Analysts note Iran's stance may be linked to a desire by Tehran to use its energy weapon against the West amid a nuclear standoff.

Iranian Oil Minister Kazem Vaziri-Hamaneh was tight-lipped about his country's view on oil production.

"We will look at the conditions of the market and we will decide collectively," Vaziri-Hamaneh told reporters.

The price of crude oil rose above 68 dollars a barrel ahead of the OPEC meeting, with traders also focused on a week of crunch diplomatic negotiations in Europe over Iran's nuclear ambitions.

New York's main contract, light sweet crude for delivery in March, increased 34 cents to 68.10 dollars per barrel in pit trading.

Ramirez blamed the strong price on mounting tensions between the United States and the European Union and Iran over Tehran's nuclear programme.

He also pledged to back Tehran in any nuclear dispute, but did not specify how.

The Venezuelan minister emphasised that each country has its own sovereignty, adding: "We're going to express that clearly to Iran."

Europe renewed a call on Iran Monday to refrain from sensitive nuclear activities, as last-ditch talks with Tehran to avoid referral to the UN Security Council failed to ease the standoff ahead of a key meeting Thursday of the Vienna-based International Atomic Energy Agency, the UN's nuclear watchdog.

Washington accuses Tehran of using its nuclear programme as a cover for developing atomic weapons. The Islamic republic denies the claim.

OPEC, for its part, tries to distance itself from such disputes, emphasising it is an apolitical body.

Another main factor keeping prices high has been a series of attacks against oil installations in Nigeria, the world's sixth-biggest exporter of oil.

In a rare piece of good news, however, Nigerian separatist militants released four foreign oil workers on Monday, after holding them hostage in the swamps of the Niger Delta for almost three weeks.

OPEC is due to meet again in Vienna on March 8.

AFP 01 29 06

Copyright © 2006 AFP. All rights reserved

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