A month ahead of the next Opec meeting, oil ministers from Saudi Arabia, Kuwait and Qatar showed no sign of veering from the moderate production policy which has helped keep oil prices on a leash not far from $ 50 a barrel since early March.
“We need to be pragmatic,” Qatar’s Deputy Premier and Energy Minister HE Abdullah bin Hamad al-Attiyah said. “We will have to see how the economy will recover first.”
Leading crude producer Saudi Arabia said $ 50 oil, a third of the record price hit last summer, was Riyadh’s way of helping nurse the economy back to growth.
Asked if $ 50 was supportive for growth, Saudi Oil Minister Ali al-Naimi said: “Yes, that’s our contribution to the world economy.”
Naimi and fellow Gulf oil ministers meet their counterparts from Asia consumer nations in Tokyo today.
While judging world oil markets to be “definitely” oversupplied, when asked whether he was worried about high inventories Naimi said: “Eventually, they will come down.”
Closing at $ 51.49 a barrel at the end of last week, US crude has risen from a low of $ 32.40 in December after setting a record of over $ 147 in July 2008.
Opec has cut supplies by just over 11%, 3.3mn barrels a day, since September 2008 to counteract a drop in demand and the slump in prices.
But at its last meeting in March it left output quotas unchanged, calling instead only for full compliance by its members with existing curbs. Full compliance with agreed cuts of 4.2mn bpd would take supply cuts since September to 14%.
The ministers declined comment on the likely outcome of the Opec meeting on May 28. But they stressed the need to remain focused on the global economy.
“We have to wait for the manifestation of the desired effects of the stimulus packages of the big economies which are suffering from sharp recession,” state Kuwait news agency reported Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah saying.
Opec Secretary-General Abdalla El-Badri wants the group to fully implement supply cuts agreed last year before it discusses any further reductions, Dow Jones Newswires reported yesterday.
Still, the group won’t hesitate to take further action if needed at its next meeting on May 28, the report cited El-Badri as saying in an interview.
Al-Attiyah said Opec needed to monitor the global oil market carefully to determine if it is oversupplied. The outcome of the next Opec meeting is “very hard to predict,” he said.
Opec isn’t formally obligated to reach its output targets before announcing new cuts. The group that supplies about 40% of the world’s crude oil has completed 83% of 4.2mn barrels a day of production curbs agreed last year, according to data last week from the organisation.
