OPEC divided over production cut

OPEC powerhouse Saudi Arabia has secured majority cartel support for endorsing tighter oil supply curbs, shrugging aside consumer concerns about crude prices close to 13-year highs.

    Saudi minister Ali al-Naimi favours production cut

    But Saudi's regional Gulf allies Kuwait and the United Arab Emirates say OPEC should consider delaying the April curbs to allow oil prices to cool.

       

    Libyan Oil Minister Fethi bin Chetwane, speaking before a 1000 GMT meeting, said OPEC nations were "mostly" in favour of pushing ahead with lower output quotas, agreed in February for implementation from 1 April.

       

    Iran argued that it was too late to reverse February's Algiers deal to axe output by 4% or one million barrels a day.

     

    Most in the Organisation of the Petroleum Exporting Countries, including Saudi, insist on turning down the taps despite calls from the United States for cheaper fuel.     

     

    Split

       

    The split in the ranks of OPEC's core Gulf membership has raised speculation that the United States is now targeting Kuwait and the UAE, instead of Saudi, for diplomatic efforts aimed at getting lower prices.

       

    Kuwaiti Oil Minister Shaikh Ahmad al-Fahd al-Sabah has proposed deferring curbs until the group meets again on 3 June.

     

    "All options are open"

    UAE

    Shaikh Ahmad late on Tuesday, after a meeting with Saudi Oil Minister Ali al-Naimi, said he was sticking by his position. The UAE continued to insist on Wednesday that "all options are open."

       

    The Bush administration, in an election year, is pressing OPEC to raise export flows to help control US gasoline prices, already at record highs, and prevent energy inflation from slowing economic growth.

       

    OPEC blames speculators for high prices, saying it has no control over the investment funds who this year have taken record positions on energy futures contracts in London and New York.

     

    US crude early on Wednesday traded up 29 cents at $36.54 a barrel, driven by a new all-time high on the New York Mercantile Exchange's gasoline contract of $1.177 a gallon.

    SOURCE: Reuters


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