Opec committee recommends steady output

11 Sep, 2006

A committee advising Opec on oil output policy will recommend the organisation keep its current production when it meets on Monday but leave the door open to another meeting if necessary, an Opec delegate said on Sunday.
"The recommendation is no change (to the 28 million barrels per day ceiling) but adherence and compliance to quotas and also for the president to be authorised to call for a meeting before December if the market requires it," the delegate told Reuters.
The Ministerial Monitoring Committee, made up of Nigeria, Iran, Kuwait and Opec 's secretary general, convened on Sunday to examine market conditions and come up with advice for Opec ministers meeting on Monday.
For over a year Opec has been pumping at or near its fastest rate for 25 years.
"We are going to now emphasise a relation to fundamentals. The geopolitical situation has cooled off somewhat and I believe it is the right time to relate prices to other fundamentals," Opec President and Nigerian Minister of State for Petroleum Edmund Daukoru told reporters afterwards.
"We don't know when the bubble might break, we need to take a more realistic position," he said. Oil prices hit a record $78.40 a barrel on July 14, boosted by world political tensions, but has since fallen $12. Daukoru said the committee had not discussed any specific lower oil price which could trigger Opec to cut back output. "The market is really well supplied," Daukoru said. "Stocks have really built up. Non- Opec capacity is growing quite fast."

Read Comments