Opec coasts towards smooth deal
Vienna, May 29, 2013
Opec, enjoying oil at just over $100 a barrel, looks set to keep its output policy on a steady course for 2013.
Saudi Arabia, its top oil producer, has already set the stage for a swift and easy deal when oil ministers meet on Friday and are expected to retain a 30-million barrel-a-day output target.
"Let me tell you this, this is the best environment for the market. Supplies are plentiful, demand is great, balanced -inventories are balanced," influential Saudi Oil Minister Ali al-Naimi said on Tuesday.
And while the price of oil by historical standards is expensive, it is well below the $125 that rang alarms in major consumer countries last year.
"The current price is fair and reasonable," UAE Oil Minister Suhail Bin Mohammed Al-Mazroui told Reuters on Wednesday.
"It's been sustained for some time without impacting the economics of the producers and the countries that are buying the crude. It also encourages investment in future supply," said Mazroui, attending his first meeting of Opec.
Triple digit oil has also encouraged development of US shale oil, some of which is among the most costly in the world to produce and competes with Opec's crude.
But Saudi Arabia - holder of most spare capacity in the Organization of the Petroleum Exporting Countries - shows no sign of opening the taps to bring down prices and curtail that output by making it uneconomic.
Opec, which dismissed it as of little concern a year ago, does not hold a common position on shale. While Saudi's Naimi welcomes it, his Nigerian counterpart Diezani Alison-Madueke has said it will have a "major impact."
Nigeria, along with Algeria, has already felt the heat from the US oil boom, losing ground in its most lucrative export market and diverting sales to Asia.
Fast-growing exporter Iraq is also fighting for more Asian market share, undercutting regional rival Saudi Arabia.
The UAE is the only other Opec member with significant growth plans. It has the ability to pump 3 million barrels per day (bpd) and plans to increase capacity to 3.5 million bpd by 2017, said Mazroui.
But the minister brushed off any concern of a looming market share battle in Asia. - Reuters