Enviado: 2/4/2005 19:50OPEC May Boost Oil-Output Quota in May, Third Quarter (Update2)
April 2 (Bloomberg) -- OPEC may boost its crude output quota by 500,000 barrels a day in May and add another half a million barrels in the third quarter in a bid to stop record oil prices from slowing economic growth, the group's president said.
``Prices should remain within a reasonable range to prevent a slowdown in economic growth,'' Sheikh Ahmad Fahd al-Sabah said in Kuwait City today at the Euro-Gulf Energy Forum. ``Because prices are at a record, we expect to resume discussions this coming week to add 500,000 barrels a day starting May.''
The Organization of Petroleum Exporting Countries, supplier of almost 40 percent of the world's crude, is pumping close to its limit to bring down crude prices that reached an all-time high of $57.70 a barrel in New York yesterday. High oil prices contributed to slowing job growth and faster inflation in the U.S. in March, signs that the economy may be slowing.
``Oil prices could reach $60 if the group doesn't calm the market and increase supply,'' said Sabah, who is also Kuwait's oil minister. Market fears of supply disruptions are driving up the oil price, he said.
OPEC states with quotas, all except Iraq, are now producing close to 28 million barrels a day, which is 500,000 barrels above the current output quota, Sabah said. The group has spare capacity of 2 million barrels a day and this will rise to 3 million barrels by the end of the year as members boost their production capabilities.
Effect on Growth
Crude prices of $55 a barrel have slowed economic growth in countries such as the U.S. and China, the world's largest oil consumers, said William Ramsay, deputy director of the International Energy Agency. The Paris-based agency advises 26 oil-importing countries on energy policy.
``Just because these countries continue to grow, doesn't mean oil price increases haven't affected them,'' Ramsay said today in an interview in Kuwait.
OPEC may raise its oil-output quota by 500,000 barrels a day in the third quarter and make further increases in the fourth quarter, Sabah said, without specifying the size of the potential fourth quarter increase.
The 11-member group agreed on March 16 to boost its official output quota by 500,000 barrels a day to 27.5 million barrels and pledged to add half a million barrels a day more as early as May, if prices rose and demand warranted more supply.
$105?
Saudi Arabia, the group's largest producer, has said it's prepared to raise output by 1.5 million barrels a day to its maximum capacity of 11 million barrels a day to meet any unexpected rise in demand.
Prices may touch $105 a barrel in the next several years as the market goes through a ``super spike'' period because of increasing demand, Goldman Sachs Group Inc. said March 31. The company's upper forecast was $80 previously.
Rising prices are needed to ``meaningfully reduce energy consumption and recreate a spare capacity cushion,'' according to the report, which helped push oil prices.
The IEA is preparing a study on energy saving measures that oil-importers could implement in the transportation industry to lower fuel consumption as oil prices rise, Ramsay said.
Gasoline rallied to records yesterday as the summer driving season in the U.S. approaches. About 10 percent of the world's crude oil is used to make gasoline for U.S. motorists.
To contact the reporter on this story:
Dania Saadi in Kuwait on dsaadi2@bloomberg.net
To contact the editor responsible for this story:
Chris Collins at collinsc@bloomberg.net
Last Updated: April 2, 2005 11:26 EST
April 2 (Bloomberg) -- OPEC may boost its crude output quota by 500,000 barrels a day in May and add another half a million barrels in the third quarter in a bid to stop record oil prices from slowing economic growth, the group's president said.
``Prices should remain within a reasonable range to prevent a slowdown in economic growth,'' Sheikh Ahmad Fahd al-Sabah said in Kuwait City today at the Euro-Gulf Energy Forum. ``Because prices are at a record, we expect to resume discussions this coming week to add 500,000 barrels a day starting May.''
The Organization of Petroleum Exporting Countries, supplier of almost 40 percent of the world's crude, is pumping close to its limit to bring down crude prices that reached an all-time high of $57.70 a barrel in New York yesterday. High oil prices contributed to slowing job growth and faster inflation in the U.S. in March, signs that the economy may be slowing.
``Oil prices could reach $60 if the group doesn't calm the market and increase supply,'' said Sabah, who is also Kuwait's oil minister. Market fears of supply disruptions are driving up the oil price, he said.
OPEC states with quotas, all except Iraq, are now producing close to 28 million barrels a day, which is 500,000 barrels above the current output quota, Sabah said. The group has spare capacity of 2 million barrels a day and this will rise to 3 million barrels by the end of the year as members boost their production capabilities.
Effect on Growth
Crude prices of $55 a barrel have slowed economic growth in countries such as the U.S. and China, the world's largest oil consumers, said William Ramsay, deputy director of the International Energy Agency. The Paris-based agency advises 26 oil-importing countries on energy policy.
``Just because these countries continue to grow, doesn't mean oil price increases haven't affected them,'' Ramsay said today in an interview in Kuwait.
OPEC may raise its oil-output quota by 500,000 barrels a day in the third quarter and make further increases in the fourth quarter, Sabah said, without specifying the size of the potential fourth quarter increase.
The 11-member group agreed on March 16 to boost its official output quota by 500,000 barrels a day to 27.5 million barrels and pledged to add half a million barrels a day more as early as May, if prices rose and demand warranted more supply.
$105?
Saudi Arabia, the group's largest producer, has said it's prepared to raise output by 1.5 million barrels a day to its maximum capacity of 11 million barrels a day to meet any unexpected rise in demand.
Prices may touch $105 a barrel in the next several years as the market goes through a ``super spike'' period because of increasing demand, Goldman Sachs Group Inc. said March 31. The company's upper forecast was $80 previously.
Rising prices are needed to ``meaningfully reduce energy consumption and recreate a spare capacity cushion,'' according to the report, which helped push oil prices.
The IEA is preparing a study on energy saving measures that oil-importers could implement in the transportation industry to lower fuel consumption as oil prices rise, Ramsay said.
Gasoline rallied to records yesterday as the summer driving season in the U.S. approaches. About 10 percent of the world's crude oil is used to make gasoline for U.S. motorists.
To contact the reporter on this story:
Dania Saadi in Kuwait on dsaadi2@bloomberg.net
To contact the editor responsible for this story:
Chris Collins at collinsc@bloomberg.net
Last Updated: April 2, 2005 11:26 EST