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15 July 2024

Opec unlikely to be moved by $100 oil

By Agencies


Oil prices of more than $100 a barrel are unlikely to sway Opec ministers meeting in Vienna this week into raising output, which they say is more than adequate.

Consumers, led by top fuel burner the United States, have urged the Organization of the Petroleum Exporting Countries (Opec) to produce more oil in an attempt to cool prices, which were trading at $101.63.

Opec ministers have said prices have been driven by factors beyond their control, including a weak US dollar and political tension, and not by any lack of oil.

Arriving in Vienna on Sunday, Libya's top oil official Shokri Ghanem reiterated he did not expect a change at Wednesday's meeting.

"It seems that things are going to be as is," Ghanem told reporters, echoing remarks he made last week.

Oil prices were supported on Monday as Opec members Venezuela and Ecuador sent troops to their borders with Colombia.

Venezuela is also in dispute with US oil major Exxon Mobil, which has won court orders freezing up to $12 billion of the country's assets.

Opec 's most influential member Saudi Arabia would not be drawn on the outcome of this week's meeting.

But the kingdom's Oil Minister Ali Al Naimi said in an interview published at the weekend prices would not fall below $60-$70 a barrel as this was the minimum level at which alternatives to conventional oil were economically viable.

"From now there's a line below which prices won't fall," Naimi was quoted as saying in an interview with Petrostrategies magazine.

Opec, which pumps more than a third of the world's oil, last met on February 1 and left output unchanged. It has not agreed a formal increase since September last year.

A Reuters survey at the end of last week found analysts were unanimous in predicting no official change at this week's meeting.

A deal on Wednesday to hold supplies steady, would still leave latitude for raising or lowering output to reflect demand.

"I wouldn't rule out further supply gains, but not necessarily associated with a formal quota increase," said Antoine Halff of Newedge brokerage.

Whether that would have any impact on price remains to be seen.

"It's become hard to figure what would lower prices these days -- rising stocks and weakening fundamentals have not kept them from rising," Halff said. (Reuters)