OPEC likely to keep output steady in Sept: Source
OPEC is likely to keep oil output policy unchanged at its meeting in September as prices remain high despite a sharp fall from July's peak, an OPEC source said on Monday.
By Agencies |
DUBAI:OPEC is likely to keep oil output policy unchanged at its meeting in Septemberas prices remain high despite a sharp fall from July's peak, an OPEC source saidon Monday.
U.S. crude traded at $115 a barrel onMonday, and has fallen over $30 from July's peak. Top oil exporter Saudi Arabiapledged to boost output to a 27-year high in July to meet rising demand and helptame record prices.
Some of OPEC's more hawkish members have saidthat the group should trim output at its next meeting on Sept. 9 if pricescontinue to weaken.
"I think output will stay the same," the OPECsource said. "The price is still high."
OPEC members wanted to seeprices that prevent long-term demand erosion and encourage global economicgrowth, the source said, declining to define an ideal price. OPEC pumps morethan a third of the world's oil.
Officials from the producer grouphave been reluctant to give a price target, in part because different members ofthe group have different price needs to balance their budgets.
Venezuela and Iran are among the OPEC members in need of the highestprices and have been the first to publicly call for the group to trim output ifthe market keeps falling.
UNCERTAINTIES
Global oilproduction was more than sufficient to meet demand in the short-term, butconsumption should rise in winter, the source said.
Seasonal demandshould soften the short-term impact of the fall in consumption from the slowingeconomies of industrialised countries, the source said. The effect of theslowdown on oil demand would be clearer after winter.
"There are alot of uncertain issues in the market," the source said. "We don't know whatdemand will be and we have to keep a close eye on the U.S. economy. We don'tknow what supply will be from producers outside of OPEC. We don't know aboutinventories."
U.S. demand fell 800,000 barrels per day (bpd) on theyear in the first half of 2008, the steepest fall in 26 years. But in thelong-term, fundamentals looked tight, the OPEC source said.
Emergingeconomies led by China continued to show strong demand growth, while producersoutside of OPEC struggle to boost output, the source said.
"In thelong term, the market is tight," the source said. "Demand for oil is stillgrowing, and alternatives to oil cannot answer the need overnight, especiallynot in developing countries that can't afford the technology."
U.S. crude
Some of OPEC's more hawkish members have saidthat the group should trim output at its next meeting on Sept. 9 if pricescontinue to weaken.
"I think output will stay the same," the OPECsource said. "The price is still high."
OPEC members wanted to seeprices that prevent long-term demand erosion and encourage global economicgrowth, the source said, declining to define an ideal price. OPEC pumps morethan a third of the world's oil.
Officials from the producer grouphave been reluctant to give a price target, in part because different members ofthe group have different price needs to balance their budgets.
Venezuela and Iran are among the OPEC members in need of the highestprices and have been the first to publicly call for the group to trim output ifthe market keeps falling.
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UNCERTAINTIES
Global oilproduction was more than sufficient to meet demand in the short-term, butconsumption should rise in winter, the source said.
Seasonal demandshould soften the short-term impact of the fall in consumption from the slowingeconomies of industrialised countries, the source said. The effect of theslowdown on oil demand would be clearer after winter.
"There are alot of uncertain issues in the market," the source said. "We don't know whatdemand will be and we have to keep a close eye on the U.S. economy. We don'tknow what supply will be from producers outside of OPEC. We don't know aboutinventories."
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U.S. demand fell 800,000 barrels per day (bpd) on theyear in the first half of 2008, the steepest fall in 26 years. But in thelong-term, fundamentals looked tight, the OPEC source said.
Emergingeconomies led by China continued to show strong demand growth, while producersoutside of OPEC struggle to boost output, the source said.
ADVERTISEMENT
"In thelong term, the market is tight," the source said. "Demand for oil is stillgrowing, and alternatives to oil cannot answer the need overnight, especiallynot in developing countries that can't afford the technology."
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