OPEC Committee Recommends Keeping Oil Output Quotas Unchanged

Sept. 9 (Bloomberg) -- The Organization of Petroleum Exporting Countries should maintain existing output quotas and improve compliance when the 12-member group meets today, the group’s production-monitoring committee recommended.

“We need more compliance” with existing production targets, Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah told reporters in Vienna. “I don’t foresee any cut,” he said, when asked at what price level the group might consider a further supply reduction.

Al-Sabah spoke to reporters yesterday after attending an hour-long evening meeting of OPEC’s Ministerial Monitoring Committee to review data on OPEC oil supply and demand at the group’s Vienna headquarters.

The MMC, comprising representatives from Iran, Nigeria and Kuwait, often recommends a course of action for the full meeting of OPEC ministers, which convenes at 9.30 p.m. in Vienna. OPEC Secretary General Abdalla El-Badri and Iran’s incoming Oil Minister Masoud Mir-Kazemi both left the MMC meeting without commenting.

OPEC is meeting for a third time this year to discuss quotas. It left them unchanged at the two previous meetings in March and May. The MMC also recommended no change in quotas when it met before OPEC’s May meeting.

The group agreed late last year to cut production targets by 4.2 million barrels a day after prices crashed more than $100 a barrel from a record of $147.27 in July 2008.

Compliance Percentage

The 11 OPEC members bound by quotas are currently complying with about 68 percent of their promised cutbacks, Al-Sabah said, adding that “75 percent would be fine.”

Those members, all except Iraq, pumped 26.055 million barrels a day in August, according to estimates in a Bloomberg survey, which indicates quota compliance of about 71 percent. Only Saudi Arabia, Kuwait and Qatar pumped less than their target. Iran, Angola and Venezuela are the biggest quota busters.

Oil rallied from a low of $32.70 in January to peak this year of $75 a barrel on Aug. 25. Crude for October delivery was trading at $71.16 on the New York Mercantile Exchange at 8:24 a.m. in Singapore. Al-Sabah said current prices are “O.K.” and said a supply cutback is unlikely in the near future even though the market is “oversupplied.”

OPEC will probably leave production quotas unchanged for a third time at tomorrow’s meeting, according to all 26 analysts surveyed by Bloomberg News.

Saudi Arabia Oil Minister Ali al-Naimi, who represents OPEC’s biggest and most influential producer, said this morning the global crude market is in “good shape.”

“The price is good for everybody, consumers, producers,” Al-Naimi said as he arrived in Vienna for today’s meeting. “The market is very well supplied.”

Ministers will gather at the group’s headquarters after dark because the summit falls in the Muslim holy month of Ramadan.