Opec sees 'no need for output boost'

A panel of Opec economists meeting ahead of the group's March 5 gathering does not see a need for the group to raise its oil output, an Opec delegate said on Thursday.

Opec's Economic Commission Board is holding a two-day meeting at the group's Vienna headquarters on Thursday and Friday, ahead of next week's ministerial session that will decide output policy.

"So far, it seems things won't change," said the delegate. "Let's see what happens tomorrow."

Oil hit a record high above $102 a barrel this week, partly on expectations that the Organisation of the Petroleum Exporting Countries, source of more than a third of the world's oil, will not raise production.

 

News that a fire struck a major European natural gas terminal also pushed oil to reach its all-time high. Record weakness in the US dollar encouraged oil's gains, fueling a broad commodities rally.

 

US Energy Secretary Sam Bodman reiterated calls for Opec to open the taps as US consumers struggle with the effects of rising energy costs, the mortgage crisis and the credit crunch. But Opec ministers say prices are rising on speculative buying, and insist global supplies are ample to cover demand.

 

US crude oil stocks rose for the seventh straight week last week, according to US government data released Wednesday, while gasoline stocks are at 14-year highs.

"In terms of fundamentals, it's hard to justify the ferocity of the market's rally," said Robert Laughlin of MF Global. "The weakness in the US economy is now affecting demand." (Reuters)