OPEC oil producers are consulting about a supply boost but many in the group remain sceptical, saying high prices are due to fears of shortage and world supply is comfortable despite the loss of Libyan crude.
The Organization of the Petroleum Exporting Countries has yet to officially change its production policy, even though it has been boosting supply informally for months and Saudi Arabia has offered to help make up for the loss of around two thirds of Libya’s output.
“We are in consultations about a potential output increase, but have not yet decided,” Kuwait’s Oil Minister Sheikh Ahmad al-Abdullah Al-Sabah told reporters on Tuesday.
Brent crude oil fell by more than $2 after the Kuwaiti comments and by 1326 GMT was down $1.04 at $114.00 a barrel. On Feb. 24 Brent hit $119.79, the highest since 2008, when it reached an all-time high of $147.50.
A different message emerged from Iran, OPEC’s leading oil price hawk and holder of the rotating OPEC presidency in 2011. Its OPEC governor Mohammad Ali Khatibi downplayed speculation of more OPEC oil.
“There is no shortage in the market,” he told Reuters. “There is no need for further OPEC supply.”
“But the consumers are worried, this is psychological.”
OPEC is not scheduled to meet to review its policy until June and its Secretary General Abdullah al-Badri is sounding out the mood in the group on whether an earlier meeting was warranted, the Kuwaiti minister said.
“I have talked to al-Badri and he’s calling everybody and making a consensus on whether we need a meeting,” he said.
Delegates from two OPEC countries told Reuters on Tuesday they saw no need for a meeting at present.
INCREASES ON THE WAY
OPEC members often adjust output informally in response to changes in demand and prices without the need for a meeting.
Senior sources in Saudi Arabia told Reuters last week that the kingdom has already increased production and was pumping around 9 million barrels per day (bpd) — about 1 million bpd more than its OPEC target.
Riyadh, which favours a relatively moderate oil price range of $70 to $80 a barrel, sometimes steps in unilaterally to meet shortages or when it feels prices have risen to levels that may threaten economic growth or oil demand.
Saudi Arabia is the only country able to pump large amounts of extra oil at short notice. Investment bank Goldman Sachs raised an oil price forecast on Tuesday, saying it believes Saudi Arabia has already used up more of its extra capacity than is widely thought.
“We believe that Saudi production could be 0.5-1 million bpd higher than the official numbers suggest, which would imply that OPEC spare capacity has already dropped below 2 million bpd,” the bank sa
