OPEC Plans ‘No Changes’ at Meeting, Ministers Say

Dec. 21 (Bloomberg) -- OPEC will make “no changes” in production quotas when it meets tomorrow in Angola, Saudi Oil Minister Ali al-Naimi said.

“No, absolutely not,” al-Naimi said today as reporters asked if the Organization of Petroleum Exporting Countries will adjust the output limits that have been in place all this year. Asked if he was happy with oil prices, he said, “Yes, absolutely.” Al-Naimi predicted “gradual, steady growth” in the economy next year.

OPEC has a consensus to extend the current production limit of 24.845 million barrels a day, Secretary General Abdalla Salem el-Badri told reporters earlier today. Oil has gained 66 percent since the beginning of 2009, when production cuts agreed late last year took effect. The group left quotas unchanged for a third time when it last met in September.

“The price is very comfortable,” el-Badri said. He is “not happy” with members’ adherence with oil production targets, adding that overall compliance is about 60 percent. OPEC sets output levels for 11 of its members in an effort to guide prices. Iraq is exempt from quotas.

Algerian Oil Minister Chakib Khelil said he would “like to see 100 percent compliance” with the output targets. Prices are “OK,” Khelil said, and he expects prices to stay around the same level next year.

Officials from countries including Kuwait and Libya have already signaled no need to change quotas in comments this month. All 36 analysts in a survey by Bloomberg last week said they expected OPEC to maintain its formal production limit at the Angola meeting tomorrow.

Maintain Output

Qatari Minister Abdulla bin Hamad al-Attiyah reiterated today that current output quotas are likely to be maintained at the meeting. He made the same comment in Kuwait City a week ago.

OPEC, supplying about 40 percent of the world’s oil, is meeting in the Angolan capital Luanda amid expectations that crude demand will rebound in 2010 after a two-year slump as the global economy mends.

The International Energy Agency on Dec. 11 raised its forecast for oil demand next year, highlighting growth in Asia and the Middle East and Asia. Demand from China is currently strong, the Qatari minister said today.

Crude oil for January delivery fell 89 cents, or 1.2 percent, to settle at $72.47 a barrel on the New York Mercantile exchange. The January contract expired today. Brent crude for February settlement declined $1.14 to $72.61 a barrel at 4:57 p.m. New York time on the London-based ICE Futures Europe exchange.

The oil price is “very comfortable” for OPEC producers, the group’s president and Angolan oil minister, Jose Maria Botelho de Vasconcelos said in an interview in Luanda today.

Economic Slump

The economic slump has curbed demand for oil, leading to a build-up of stockpiles in North America and Europe. IEA statistics show inventories in North America and Europe are still “well above” their five-year average.

OPEC should work to bring inventory levels down to a “reasonable level” of 52 days worth of supply, compared with about 59 days currently, el-Badri said today.

“We don’t expect any change in the level of production,” Oil and Energy Minister Rafael Ramirez said in Caracas. Venezuela’s position is to maintain production and wait for the March 2010 meeting, he said.

Prices are moving on inventories and the strength of the dollar, Ramirez said. “It’s a market that’s still sensitive to factors that don’t necessarily have to do with the fundamentals. That’s why we think we have to maintain production as is, until there’s a positive signal in recovery in demand for 2010.”

The group doesn’t need to meet again before its next scheduled March 17 conference if market conditions stay the same, el-Badri said. OPEC’s members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.