Opec member Iran believes cartel members needs to cut production back to official quota levels to bolster prices for its lower-quality crude supplies, an Iranian oil official said on Tuesday. "We are cautioning producers to be more vigilant and fully adhere to quotas," said an Iranian oil official. "Members should think of trimming production to the level of quotas."
Oil prices have tumbled 15 percent from record highs in the last three weeks as Opec pumps near the highest level for 25 years, helping to replenish consumer inventories. US crude was up 26 cents at $47.13 a barrel on Tuesday.
Opec's high sulphur, or sour, grades of crude oil have sunk even further, falling to record discounts against international benchmarks. Opec's reference crude oil basket has fallen to its lowest level since mid-July at $36.11.
"All those who stood to compensate from additional barrels in the market should now review their production," the official said. "As far as heavy sours, it has already gone too far."
The 10 Opec members with quotas pumped 27.89 million barrels per day (bpd) in October, 890,000 bpd above a ceiling that came into force on November 1, a Reuters survey found.
Iran produced 3.97 million bpd in October, almost exactly in line with its new Opec quota of 3.964 million bpd.
Top world exporter Saudi Arabia has led Opec's production surge, pumping 9.58 million bpd in October, some 1.13 million bpd above its October quota and 805,000 bpd above its new November quota.
Gulf members the UAE and Kuwait are also producing over quota, as are Algeria and Libya, who both want a higher quota to reflect their expansion in production capacity. Opec next meets on December 10 in Cairo.
Other Opec delegates said that Opec should not be too hasty in trimming supply. Oil prices are still up more than 40 percent this year, raising fears that fuel demand could suffer if rising energy costs weaken economic growth.
Comments
Comments are closed.