Thursday, September 3, 2009

OPEC Will Maintain Crude Oil Production Targets, President Says

Sept. 2 (Bloomberg) -- OPEC will leave oil production targets unchanged when it meets next week in Vienna after prices recovered, the group’s president said.

“We have been seeing slowly a much reduced variation of oil prices,” Jose Maria Botelho de Vasconcelos, who is also Angola’s oil minister, said in an interview in Luanda, Angola, today. “This is a sign that the world economy is recovering. Everything shows that they will keep output unchanged.”

Botelho de Vasconcelos’s views chimed with an official from a Persian Gulf member of the Organization of Petroleum Exporting Countries who said today the group would probably hold quotas steady to avoid derailing the global economic recovery. The official declined to be identified by name because a final decision hasn’t been made.

OPEC is holding its third meeting of the year on Sept. 9 in Vienna. The group hasn’t altered output targets since it agreed last year to reduce total production for its 11 members with quotas, excluding Iraq, by 4.2 million barrels a day to arrest plunging prices as the world fell into recession.

Oil prices reached a record $147.27 a barrel in July 2008 before plummeting to less than $40 in December. Crude has recovered this year to around $70 a barrel, a price ministers have said is fair for consumers and producers.

Members’ compliance with its record output cut slipped for a fourth consecutive month in July as prices recovered, giving an implementation rate of 67 percent, OPEC said in its most recent monthly report.

Above Quotas

The 11 OPEC members with quotas pumped 26.055 million barrels a day in August, 1.21 million more than their collective target and 20,000 barrels a day up from the previous month, according to estimates in a Bloomberg survey published yesterday.

OPEC countries that are producing above their quotas, such as Iran, Angola, Ecuador and Venezuela, will be encouraged to comply with their agreed output limits, the Persian Gulf official said.

Oil ministers from Qatar, Kuwait and Iraq expressed support in recent days for leaving quotas unchanged, even as oil stocks remain high. The focus should be on returning the global economy to growth rather than higher stock levels, the official said.