Tuesday 5 July 2022

Gulf Opec members unlikely to boost production

Dubai, August 31, 2012

Gulf oil producers are unlikely to ramp up oil production further unless demand rises, according to the Organisation of Petroleum Exporting Countries (Opec) delegates from the Gulf region.

Finance ministers from the Group of Seven most industrialised nations urged oil-producing countries on Tuesday to raise output to ensure the market is well supplied.

But Gulf Opec producers on Thursday dismissed the need for additional production, saying the market was still well supplied.

'We promised to meet demand and that's what we are doing, if we see there is more demand there will be more production, but for the moment our customers are satisfied,' a Gulf Opec delegate said.

The Opec ministers decided in mid-June to adhere to a collective output limit of 30 million barrels per day (bpd), implying a 1.6 million bpd cut from actual supply of around 31.5 million. Saudi Arabia was expected to make a sizable contribution to that cut.

Crude production from Gulf states has remained high. Supply from the 12-member Opec averaged 31.53 million barrels per day (bpd), up from 31.30 million bpd in July, according to a Reuters survey.

'There is enough crude in the market and crude stocks are high so no need for additional crude,' said a second Gulf delegate.

'Higher prices are driven by geopolitical factors... I doubt that there would be higher production to bring the price down.'

Oil prices have surged as Western sanctions on Iran have led to a loss of about 1 million barrels per day in supply from the Opec member.

Brent crude for October delivery rose 71 cents to $113.25 a barrel on Thursday, while US crude slipped 11 cents to $95.38.

On Tuesday, the head of the International Energy Agency (IEA), which represents 28 oil consuming countries, voiced her strongest opposition yet to a release of emergency oil supplies.

'More oil in the market is not the solution to bring down prices and the IEA now understand this well,' said the second Gulf delegate.-Reuters

Tags: Oil | Gulf | Opec | International Energy Agency |

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