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Opec 'seeking stable world oil price'

Baghdad, April 10, 2012

Opec is seeking a balance in world oil prices, but political instability rather than production issues are affecting the market price, Iraqi Oil Minister Abdul Kareem Luaibi said.

Brent crude slipped around $1 yesterday after Iran agreed to resume talks on its disputed nuclear programme, easing fears over a supply disruption, and prices were under pressure on demand growth concerns.

"Opec is doing its best to produce enough crude to meet demand, but political issues are affecting prices. World prices are affected more by political instability than by production issues," Luaibi, who is Opec president, said.

He expected Iraq's oil exports to be at 2.3 million barrels per day (bpd) or slightly more, in April. Iraq's crude oil exports rose to their highest level since 2003 in March, at 2.317m bpd thanks to a new offshore export terminal.

Baghdad will complete work at its second offshore floating oil export terminal in the Gulf in about 10 days, he said. "It will provide further export capacity, enabling us to pump more crude," he added.

An increase in Iraqi exports could help alleviate international markets wary of cuts in exports from neighbouring Iran due to US and European sanctions.

Iraq is studying whether to allow Exxon Mobil to take part in a fourth oil bidding round due to a dispute over contracts it signed with Iraqi Kurdistan, he said.

Luaibi said last week Exxon Mobil had sent a second letter to the ministry confirming its decision to freeze its oil deals with the Kurdish autonomous region.

Exxon has signed up to explore for oil in Kurdistan, upsetting Baghdad which sees those contracts as illegal.

The government has warned Exxon it may face sanctions over the deals.

An industry source, meanwhile, said Saudi Arabia, the world's top crude exporter, will supply full contracted volumes of crude oil in May to at least one Asian term buyer, unchanged from April.

Riyadh made no changes to the operational tolerance in the supply allocation, he added, meaning buyers have the option of asking for cargoes to be loaded with up to 10 per cent more or less crude than contracted.

Kuwait is producing around 3m bpd of crude oil, leaving a spare capacity of about 150,000 bpd, the chairman of Kuwait Oil Company said.

The firm plans to start surveys of offshore reservoirs this year, Sami Al Rashid said to raise Kuwait's production capacity to 4m bpd by 2020.

Exploratory drilling could also start this year if the surveys are successful, Al Rashid added.-Reuters




Tags: Opec | Iraq | Crude | oil price | stable |

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