OPEC members should pump oil at will during the next few months to lower record prices, Qatar's energy minister said, joining calls from Saudi Arabia, Kuwait, Indonesia and the United Arab Emirates for more supply. The minister, Abdullah bin Hamad al-Attiyah, said concern of potential attacks on Middle East oil installations or U.S. gasoline shortages have inflated prices by $10 a barrel. Crude oil was at $42 a barrel in New York, down 33 cents, after reaching a record of $42.45 earlier in electronic trading.
``Everybody should produce what they want over the next few months,'' the minister said in an interview in Beirut, where the group meets tomorrow. The OPEC president, Purnomo Yusgiantoro of Indonesia, told reporters that members want to increase output and have a ``significant impact'' on prices. Members of Organization of Petroleum Exporting Countries outside of Saudi Arabia are producing as much oil as they can in a bid to prevent higher energy costs from damaging a recovery in the world economy. Canadian Prime Minister Paul Martin said the Group of Eight nations should lobby OPEC for more oil.
Violence is rising in the Middle East, raising concern about the security of oil supplies from the region. As many as two gunmen today opened fire on U.S. citizens in southern Riyadh, Arabiya television reported. On Saturday, terrorists attacked a compound that houses foreign oil workers in Khobar, Saudi Arabia, killing 22. Last month, five ABB Ltd. employees were killed at a petrochemical plant in Yanbu, Saudi Arabia.
Higher Quotas
Saudi Arabia, the group's biggest producer, has raised output to 9.1 million barrels a day, a Persian Gulf oil official said yesterday. That compares with Saudi assessments of capacity of 10.5 million barrels a day. Outside estimates say the limit may be 10 million. The OPEC president, Purnomo, said ministers are considering an increase of 2 million to 2.5 million barrels in the group's quota of 23.5 million barrels a day. Qatar, Indonesia and Kuwait have said they will oppose calls to suspend formally the limits. OPEC ``has to'' maintain its quota system, al-Attiyah said. ``When it comes to cutting production sometime in the future, you have to have a quota in place or else everybody will come back with unrealistic production levels.''
Today in Beirut, delegates from Nigeria, Iran, Venezuela and the United Arab Emirates are scheduled to arrive. The Ministerial Monitoring Committee, a subgroup of officials that oversees production, also is to meet and recommend a course of action to the ministers. The United Arab Emirates oil minister, Obaid bin Saif al- Nasseri, yesterday said his nation is pumping 2.45 million barrels a day, 400,000 above its OPEC quota and at the nation's limit. The United Arab Emirates cannot produce any more oil until its infrastructure is expanded, he said. Ministers yesterday said security around Middle East oil installations is increasing, seeking to allay concern among traders of threats to production.
Higher Price Target?
The Saudi oil minister, Ali al-Naimi, in Beirut said his nation is committed to keeping prices between $22 and $28 a barrel for the OPEC price benchmark. OPEC cannot always control prices, and Saudi Arabia plans to ensure demand is always met, he said. OPEC president Purnomo this week said the group won't suspend its oil quota system. Saudi Arabia on May 21 announced an increase in production and suggested the group's target rise by at least 2 million barrels a day, or 8.5 percent. Crude oil futures in New York are 37 percent higher than a year ago, in part because of refining bottlenecks and speculation of potential gasoline shortages in the U.S. Iraqi exports have failed to reach prewar levels because of persistent attacks against pipelines, refineries and other infrastructure.///www.bloomberg.com