December 10, 2010 / 4:54 PM / in 7 years

UPDATE 1-OPEC set for no change despite $90 oil

* No hike needed-Angola

* OPEC forecasts lower demand growth than IEA

* Timing of next meeting in question

(Updates throughout)

By Hugh Bronstein and Robert Campbell

QUITO, Dec 10 (Reuters) - OPEC ministers arriving for a Saturday meeting look set to hold oil output steady, leaving traders to question at what price the group might open the taps to stop fuel inflation hurting the global economy.

With oil trading near $90 a barrel, OPEC and the International Energy Agency, the energy consumer watchdog, painted widely divergent pictures of global demand and the need for the group to add production.

Oil prices are at the top end of the $70-$90 a barrel range flagged by Saudi Arabia recently as the level consumer nations could cope with, but concern about the potential damage of rising fuel costs on a recovering world economy is mounting.

If oil prices hold at current levels for a sustained period of time it could damage recovery, IEA chief economist Fatih Birol told Reuters, while analysts said a push toward $100 a barrel from around $88 on Friday would increase the chance of OPEC action.

“There would be a lot of pressure on the Saudi’s and OPEC in general to raise production as $100 oil would be viewed as injurious to economy,” said Phil Flynn, analyst at PFG Best Research in Chicago.

Angolan Oil Minister Jose Botelho de Vasconcelos told local newspapers that current oil prices did not warrant an output increase. Several other ministers have backed that view.

The producer group remains focused on the driving forces behind the run up in prices, with Libya insisting OPEC should not increase production if speculation, rather than oil fundamentals, send crude to $100 a barrel.

Leading producer Saudi Arabia has yet to make its position know on what conditions it requires to support an increase in supply.

OPEC appears to have a much more conservative view than the IEA of how fast world oil demand is growing. In a monthly report released on Friday, it estimated demand will grow this year at 1.47 million barrels per day (bpd).

The IEA expects global demand growth to average 2.47 million bpd for 2010, with consumption in the third quarter surging by 3.3 million bpd.

OPEC does not currently plan to meet again to discuss policy until June, but could call for an extraordinary meeting if needed, a senior delegate said on Friday.


Read what ministers have been saying: [ID:nN09250654]

For a selection of GRAPHICS related to OPEC see:

OECD days forward cover:

Global supply/demand forecasts:

Oil price forecasts:

Price in different currencies:

For more OPEC news and analysis click on [O-OPEC]



In its monthly update released on Friday, the IEA, an adviser to 28 industrialized countries, lifted its 2011 global oil demand growth forecast by 130,000 barrels per day (bpd) to 1.32 million bpd and also raised its projections to 2015. [ID:nLDE6B90JO]

“Against a backdrop of much stronger-than-expected global oil demand growth and oil prices above two-year highs, OPEC may come under pressure to increase supplies to the market in the new year,” the IEA said in its report.

OPEC revised its 2011 outlook upward by only 10,000 bpd from last month, to 1.18 million bpd, reinforcing its case to maintain output targets on Saturday. [ID:nLDE6B91HK] (Additional reporting by Daniel Wallis and Amena Bakr) (Writing by Matthew Robinson, Editing by Richard Mably)

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