U.A.E. Says It's Prepared to Raise Oil Production
Friday, 30 May 2008
The United Arab Emirates, OPEC's third-largest oil producer, is prepared to raise production if required by the market. "The U.A.E. is willing and well-prepared, if the market requires, to meet our responsibilities,'' Ali Al Yabhouni, the U.A.E.'s governor to the Organization of Petroleum Exporting Countries, told reporters at a media briefing in Dubai yesterday. "We have to see if there is a demand, and definitely, we can meet that demand." Saudi Arabia, OPEC's biggest producer, earlier this month said it would boost production by 300,000 barrels a day to meet demand from its customers. Pressure has increased on OPEC, which pumps more than 40 percent of the world's oil, to increase output as record crude prices threaten economic growth.
The increase announced by Saudi Arabia ``did not impact prices'' and there is no need for OPEC to raise output, Hasan Qabazard, the group's head of research, told reporters in Dubai.
`` There is a positive balance in the market, of about 800 to 1 million barrels a day,'' he said. ``With the Saudi additions, the stock-build is even more than I mentioned.''
Crude prices in New York touched a record above $135 a barrel on May 22 amid concerns about future supply constraints and speculation that OPEC is powerless to curb prices. Oil for July delivery fell as much as $1.58, or 1.2 percent, to $129.45 a barrel in electronic trading on the New York Mercantile Exchange. It was at $129.89 a barrel at 12:52 p.m. London time.
`Stable Prices'
Prices are increasing ``too fast, too high,'' the U.A.E.'s Yabhouni said. ``High prices are not good for producers or consumers, we would like to see stable prices,'' he said.
The U.A.E. pumped 2.59 million barrels a day of crude in April, according to Bloomberg estimates, making it OPEC's biggest producer after Saudi Arabia and Iran.
The country has 150,000-200,000 barrels a day of spare capacity, as does Kuwait, Qabazard said. Al-Yabhouni declined to confirm this number.
In total, OPEC has more than 3 million barrels a day of spare capacity, Qabazard said. Saudi Arabia has about 2 million barrels, Nigeria has additional oil that cannot reach markets because of rebel attacks on export routes, and Iraq also has lots of potential growth, he said.
``I don't see a need this year for OPEC to raise oil output,'' Qabazard said. ``The primary driver of the high oil price is speculation -- oil has become a financial asset as investors seek to hedge against inflation.''
He expects an average stock build of 400,000 barrels a day for 2008, with some 500,000 barrels a day of extra oil stocks during the third quarter and up to 300,000 barrels a day in the fourth quarter.
OPEC will next meet on September 9. It has left oil production unchanged at its last three meetings in December, February and March, saying the market was well supplied.
Source: Bloomberg
AI
