Opec may boost output as oil price hits 12-year high
DUBAI - Opec officials sought to ease fears of looming oil shortages, signalling that they may raise output to lower crude oil prices which shot up to 12-year highs yesterday.
The group, which supplies a third of the world's oil, will consider increasing production for a second time this year when it meets on March 11, said oil ministry officials from Qatar and Kuwait yesterday.
Opec secretary-general Alvaro Silva Calderon also said the group 'won't use oil as a weapon' if war breaks out in Iraq.
'We have around 4 million barrels per day of spare capacity. We are ready to put this amount on the market if necessary,' he added.
US light crude in electronic trade hit US$38.66 a barrel yesterday, the highest since the 1990-1991 Gulf crisis when crude peaked at more than US$41 shortly after Iraq invaded Kuwait.
'The supply situation in the US and parts of Asia is very, very dangerous,' said commodity strategist Tetsu Emori of Mitsui Bussan Futures.
'It's easy for crude oil prices to reach US$45 to US$50' a barrel once a war starts in Iraq, he added.
In another worrying development, oil traders said yesterday that Asia might find itself short of fuel oil next month.
Fuel oil shipments from Syria, Saudi Arabia's Yanbu refinery, Venezuela and the US west coast that are expected to arrive next month in Asia will not be enough to meet demand, they said.
High tanker rates are discouraging suppliers in Europe, the US and South America from shipping cargoes to Asia.
Some suppliers preferred to send cargoes to the US, where supplies are low, traders said. --AFP, Bloomberg News, Reuters