OPECOPEC Will Wait for $100 Oil Before Raising Output (Update2)
By Fiona MacDonald
June 10 (Bloomberg) -- OPEC, the supplier of 40 percent of the world’s oil, will only consider increasing output when the price of crude rises to $100 a barrel, according to Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah.
The Organization of Petroleum Exporting Countries, due to meet again in September, wouldn’t raise production with oil at $75, “but if it reaches $100, maybe,” Sheikh Ahmed told reporters in Kuwait today.
Crude oil traded in New York has climbed almost 60 percent this year, after plunging more than $100 in five months at the end of 2008 as the global recession curbed demand for fuel.
Oil prices have increased because investors have bought crude as a hedge against a weakening U.S. dollar, not because demand is rising, Sheikh Ahmed said.
“The numbers, in terms of economic recovery, are not with the rise of oil,” he said. OPEC is seeing signs of an increase in demand for oil in Asia, Sheikh Ahmed said, “but overall we don’t see any rise in demand. That’s why we should be cautious not to be driven by the market.”
OPEC predicted stronger demand as it decided May 28 in Vienna to keep production quotas unchanged. OPEC agreed at three meetings last year that the 11 members with production quotas would reduce output by 4.2 million barrels a day.
Oil futures rose above $71 a barrel yesterday for the first time in seven months, and traded at $71.18 as of 9:14 a.m. on the New York Mercantile Exchange.