VIENNA (AFP) – OPEC began a tense output meeting here on Wednesday amid uncertainty over the outcome, with clear divisions over whether the cartel should boost production to help revive flagging growth.
The grouping of 12 member nations pumping 40 percent of global oil supplies, faces a crucial decision on whether to raise production for the first time for almost four years to underpin the global economy and offset lost Libyan output.
Saudi Arabian oil officials, backed by Gulf producers such as Kuwait and the United Arab Emirates, are pressing for an increase of up to 1.5 million barrels a day.
But Ecuador, Venezuela, Iraq and Iran have all called for quotas to be maintained to preserve their precious oil revenues.
“There is still much uncertainty about the strength of the world economic recovery,” said Iran’s caretaker oil minister Mohammad Aliabadi, whose country holds the rotating OPEC presidency.
He added in his opening address: “Today, we shall look at developments in the international oil market since our last meeting in Quito on 11 December 2010.
“This period has been marked by high levels of volatility and an upward trend in prices.
“In short, it has been a nervous six months for the oil market. Throughout, however, fundamentals (of supply and demand) have remained sound.
“Very much due to OPEC’s efforts, the world remains well supplied with oil, with ample spare capacity and adequate stock levels,” Aliabadi added.
OPEC has held its production target at 24.84 million barrels per day (mbpd) since January 2009, but is pumping above that limit to compensate for the loss of supplies from Libya.
UAE Energy Minister Mohammad bin Dhaen al-Hamli, speaking ahead of the meeting, added: “An increase (in the quotas) is an option, we’ll discuss it today, we have many options.”
“Today, yes, the market is well supplied, but you have too look at the second half (of this year), it’s going to be tighter. We have to look (at) economics.”
But Venezuelan Energy Minister Rafael Ramirez argued that $100 per barrel was a “fair” price level for crude oil.
“We are going to discuss (an increase) but we don’t believe it is necessary. We believe that $100 is a fair price.”