Oil at close to $70 means Opec will almost certainly keep existing output cuts in place when it meets in Vienna on Wednesday, although it could seek to tighten compliance with existing targets, ministers and delegates said. "The market is in very good shape, very well supplied, the price is good for everybody, consumers and producers," Saudi Oil Minister Ali al Naimi said on arrival in Vienna in the early hours of Tuesday.
When asked if he thought Opec needed to cut output at its meeting set to begin at 9.30 pm (1930 GMT) on Wednesday, Naimi said: "With the price ranging between $68 and $73, what else do you want? The price, everybody likes, consumers and producers." Opec has kept official output targets steady since it announced late last year a record cut of 4.2 million barrels per day from September 2008 production.
But as the oil market has recovered from a low of $32.40 in December - its weakest in nearly five years - to this year's peak of $75 hit in August, it has reduced compliance from a peak of around 80 percent of agreed cuts to less than 70 percent. The lapsing discipline has contributed to an inventory build that has taken stocks to the equivalent of nearly 62 days of forward cover, according to the International Energy Agency - around 10 days more than Opec views as comfortable.