OPEC not planning to cut production

www.omaha.com Published Wednesday February 26, 2003

LONDON - OPEC, supplier of one-third of the world's oil, may wait until the third quarter to reduce output because of rising prices and dwindling U.S. inventories, the group's president said Wednesday.

OPEC will not change the output at its March 11 meeting, said Abdullah bin Hamad al-Attiyah, who is also the oil minister for Qatar. "We believe now the oil price is very high and demand is on the high side," he said.

The Organization of the Petroleum Exporting Countries will meet in Vienna to consider oil quotas for the second quarter.

Oil prices in London have surged 56 percent in the past year to more than $32 a barrel as a strike in Venezuela sent U.S. inventories to a 28-year low and concern increased of an attack on Iraq.

The OPEC president has reversed course, after saying Feb. 3 that members probably will have to lower sales.

Forecasters such as the International Energy Agency have since lifted their oil-demand estimates for that period, in part because of a colder-than-normal winter in the U.S and Europe.

Analysts expect any U.S.-led attack on Iraq to take place within weeks.

Oil prices are inflated by as much as $6 a barrel on concern of war, and the group may consider trimming supply during the third quarter to avert a glut, al-Attiyah said Wednesday.

"I am very concerned about the third quarter," he said. "I believe that OPEC will come again to talk about how to cut production."

The minister visited London this week to attend an energy conference and also met British government officials.

OPEC won't halt oil sales to protest U.S. aggression against Iraq, al-Attiyah reiterated.