Opec meeting in doubt, output hike still stands

VIENNA – Opec is likely to cancel a ministerial meeting scheduled for July 21 in Vienna, but a production increase on August 1 will go ahead as planned, sources said here yesterday.

“The cancellation of the meeting? We’re almost there,” a source close to the Organisation of Petroleum Exporting Countries told AFP. “There is an agreement between the ministers on implementation of the increase and that makes the meeting unnecessary.”Omar Ibrahim, Opec director of information had said earlier yesterday: “We are consulting (with the ministers) and we should know more today at 1600 GMT.”The other source had already said the planned output increase of 500 000 barrels a day would go ahead “as foreseen” on August 1.Opec agreed in June to raise its output ceiling by 2,5 million barrels a day in two stages in its effort to curb high world prices.A rise of two million barrels per day began this month and the 500 000 rise was scheduled to take effect on August 1.On Monday, Opec president Purnomo Yusgiantoro said in Jakarta that the cartel had no plans to consider any further increases.In Vienna, an Erste Bank analyst who wished to remain anonymous said: “Given the current level of prices, Opec does not plan to either raise or lower production in the short term.”As a result, the cartel didn’t really have any reason to meet.”In London, Commerzbank analyst David Thomas said it was “pretty irrelevant” for the oil market whether Opec met or not.”The market still doesn’t take much direction from Opec’s actions at the moment.It’s more demand and inventories driven than anything else,” he added.Yusgiantoro’s remarks had come in reply to a report last week that quoted Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah as saying Opec would discuss a further output increase at the July 21 meeting.Meanwhile, Iranian Oil Minister Bijan Namdar Zanganeh had noted that the price of oil was “good” and said Opec might delay the August 1 increase.But last Friday, Saudi Arabian Oil Minister Ali al-Nuaimi clarified matters by vowing that Opec would implement the output hikes.Coupled with uncertainty stemming from a Russian tax case against oil giant Yukos, persistent disruption to oil supplies from Iraq and Nigeria and alleged threats of attacks against the US during its presidential campaign, Zanganeh’s remarks had pushed up crude prices.-Nampa-AFP”There is an agreement between the ministers on implementation of the increase and that makes the meeting unnecessary.”Omar Ibrahim, Opec director of information had said earlier yesterday: “We are consulting (with the ministers) and we should know more today at 1600 GMT.”The other source had already said the planned output increase of 500 000 barrels a day would go ahead “as foreseen” on August 1.Opec agreed in June to raise its output ceiling by 2,5 million barrels a day in two stages in its effort to curb high world prices.A rise of two million barrels per day began this month and the 500 000 rise was scheduled to take effect on August 1.On Monday, Opec president Purnomo Yusgiantoro said in Jakarta that the cartel had no plans to consider any further increases.In Vienna, an Erste Bank analyst who wished to remain anonymous said: “Given the current level of prices, Opec does not plan to either raise or lower production in the short term.”As a result, the cartel didn’t really have any reason to meet.”In London, Commerzbank analyst David Thomas said it was “pretty irrelevant” for the oil market whether Opec met or not.”The market still doesn’t take much direction from Opec’s actions at the moment.It’s more demand and inventories driven than anything else,” he added.Yusgiantoro’s remarks had come in reply to a report last week that quoted Kuwaiti Oil Minister Sheikh Ahmad al-Fahd al-Sabah as saying Opec would discuss a further output increase at the July 21 meeting.Meanwhile, Iranian Oil Minister Bijan Namdar Zanganeh had noted that the price of oil was “good” and said Opec might delay the August 1 increase.But last Friday, Saudi Arabian Oil Minister Ali al-Nuaimi clarified matters by vowing that Opec would implement the output hikes.Coupled with uncertainty stemming from a Russian tax case against oil giant Yukos, persistent disruption to oil supplies from Iraq and Nigeria and alleged threats of attacks against the US during its presidential campaign, Zanganeh’s remarks had pushed up crude prices.-Nampa-AFP