Kuwait Says OPEC Should Keep Output Steady Next Month (Update1)

Aug. 19 (Bloomberg) -- OPEC should agree to maintain oil production targets when it meets next month to decide quotas, Kuwait’s oil minister said.

Oil prices are “not too bad, not too bad at all,” Sheikh Ahmed al-Abdullah al-Sabah told reporters in Kuwait today. OPEC should keep quotas unchanged, he said. Al-Sabah favors an oil price of $70-$80 a barrel.

Crude oil for September delivery fell as much as 50 cents, or 0.7 percent, to $68.69 a barrel on the New York Mercantile Exchange and traded at $68.89 as of 8:40 a.m. in London. Prices have rebounded 55 percent this year.

Members of the Organization of Petroleum Exporting Countries agreed in December on record production cuts of 4.2 million barrels a day in an attempt to support oil prices that slumped 69 percent after reaching a record $147.27. The group is scheduled to discuss quotas in Vienna on Sept. 9 after leaving output unchanged at its last two meetings.

OPEC raised production in July as compliance with quotas weakened for a fourth consecutive month, the group said in an Aug. 11 report. The 11 members bound by a production quota of 24.8 million barrels a day are producing 1.4 million barrels above their target, it said.

Economists at Deutsche Bank AG said a cut is still possible as inventory levels keep rising.

“Fears of a global depression have abated and the consensus for the ‘call on OPEC’ in 2010 suggests lower quotas may be required,” Adam Sieminski, chief energy economist at Deutsche Bank, said in an Aug. 14 report.

Angola, Iran and Venezuela are the biggest quota-busters. Angola’s daily crude oil exports are scheduled to rise to the highest this year, according to shipping programs, and Iran and Venezuela are producing at least 200,000 barrels a day each above their formal limits, Bloomberg data shows.

Al-Sabah said he’s optimistic that demand will increase by year end.