Enough supplies to meet demand

english.eastday.com

OPEC president says oil prices are inflated by war concern OIL consumers worldwide have enough supplies to meet demand, the OPEC president said on Monday, adding that prices are inflated by traders' concern that a war with Iraq will disrupt shipments.

"The answer from our customers is they don't see the need for more oil now," Abdullah bin Hamad al-Attiyah, the OPEC president and Qatari oil minister, told reporters in London, where he was attending an oil conference. Oil prices are inflated by at least US$5 a barrel because of war concern, he said.

The Organization of Petroleum Exporting Countries, which pumps a third of the world's oil, meets on March 11 to consider oil quotas for the second quarter, when demand will slow because of the end of the Northern Hemisphere winter. Oil prices in London have surged 65 percent in the past year to US$32.92 a barrel.

The OPEC president said ministers would discuss at next month's meeting in Vienna whether to suspend production quotas temporarily to boost supplies should Iraqi oil output be halted because of a U.S.-led attack, among other scenarios.

"We will meet in March and we will discuss it," he said. "We will discuss all options."

Last week, OPEC officials said the group may suspend quotas in the event Iraq's exports are cut off by an attack.

The country produces about 3.2 percent of the world's oil.

OPEC raised its output target by 6.5 percent, or 1.5 million barrels a day, starting February 1, in an effort to lower prices, which have surged on concern of an attack on Iraq and a strike in Venezuela.

The group, except Iraq, restrains oil output to keep its oil-price benchmark between US$22 a barrel and US$28. The price has stayed above the range since December 16.

Iraq has no quota as its trade is under UN oversight.

OPEC will consider implementing an informal accord to raise quotas by at least 500,000 barrels a day should the oil benchmark stay above US$28 a barrel for 20 consecutive trading days, al-Attiyah said. The 20th day would be this Friday.

The agreement "can be triggered," though ministers may decide to wait until they meet before taking any decision on changing quotas, the minister said.