Opec to hike oil output

The oil producers are expected to formally agree on a new production level on Thursday at their meeting in Beirut, Saudi Oil Minister Ali al-Nuaimi told the al-Hayat Arab daily.

The Organisation of Petroleum Exporting Countries (Opec) has been under pressure to up production after recent attacks in Saudi Arabia and record high oil prices.

“We should formally agree on a new Opec production level, which is already at 26 mbd (million barrels per day),” said al-Nuaimi, referring to the real production level rather than the lower official OPEC production level for member nations.

The minister said the new platform should not encounter any opposition “because the effective production of the 10 members of Opec, with the exception of Iraq which is not subject to the quota system, was maintained at a level of 26 mbd throughout last year”.

But Iran, fearing a price collapse, is proposing a two-stage
deal that would bring a maximum of 1.5 million barrels a day now with perhaps more to come at a subsequent meeting later in the summer.

Soaring prices

Asked about Saudi Arabia’s willingness to increase production to 10.5 mbd, which the minister had raised recently in Amsterdam, al-Nuaimi said: “If there is a real need for extra amounts, and we see that they [the consumers] cannot get their supplies from other producer countries, we are inclined to satisfy their needs.”

Prices fell on Wednesday in New York after Opec’s efforts to calm the market, with Riyadh leading calls for oil prices to return to the cartel’s target range of $22 to $28 a barrel.

The July contract lost $2.37 in New York trading, easing off a record high close of $42.33 on Tuesday.