OPEC was to consider raising its oil output quota by up to 1 million barrels per day at a meeting here yesterday in a largely symbolic gesture, since members are already pumping far above the 26 million ceiling.
The 11-strong cartel is also expected to discuss raising a price band of US$22 to US$28 per barrel to bring it closer in line with market reality, which has ranged between US$40 and US$45.
But ministers appear divided over whether a change in the band, which has been in place since March 2000, is needed immediately and will likely postpone a decision.
Market watchers were waiting to hear what action, if any, OPEC ministers would take yesterday as oil prices soar near record highs.
Oil prices pressed higher in Asian trade ahead of the OPEC meeting amid concerns over possible supply disruptions in the Gulf of Mexico due to powerful Hurricane Ivan, dealers in Singapore said. New York's reference contract, light sweet crude for October delivery, was at US$44.71 a barrel, up from US$44.39 in New York overnight.
OPEC kingpin Saudi Arabia set the scene for a possible rise in the cartel's oil quota from 26 million barrels per day by saying that it was in favor of increasing the ceiling by 1 million barrels. Several other countries including Kuwait have made a similar proposal.
"The recommendation is to increase the ceiling [by] about 1 million," said Kuwait's oil minister, Al Ahmad al-Sabah, as he headed into an informal breakfast before the start of the conference.
"This is the recommendation of some members of OPEC," he told reporters.
In contrast, Iran has said the oil market was over-supplied by three million barrels daily, casting doubt on the need to raise the official production quota -- seen as a goodwill gesture to consumers as actual output is already at some 28 million barrels daily.
Venezuela, Libya, Qatar and Nigeria have also argued against an adjustment.
"It is very difficult ... raising the ceiling may affect the price too much," Libyan Oil Minister Fathi Hamed Ben Shatwan warned.
Analysts have pointed out that any hike would have slim impact in real terms as the cartel is already pumping above its official quota, noting that they may have to curb actual production in the coming months by as much as 1 million barrels daily due to cooling demand.
"I think that the easiest thing for OPEC to do is nothing," said Adam Siemenski, a global oil analyst at Deutsche Bank in London.
The bank's forecast for the fourth quarter and for most of next year is that demand for the 10 members of OPEC that have the quotas would be around 27 million barrels per day, he told reporters on the sidelines of the OPEC gathering.
"So they might actually have to cut back just a little bit, maybe a million barrels a day, this is what the supply and demand fundamentals say," he said.
Faced with record prices, the cartel in June decided to increase its output by one million barrels per day over the next two months, and sources say it went well beyond that to pump 29.75 million barrels per day by the end of last month.
Saudi Arabia has emphasized that what matters to the market is the real amount being produced by the cartel's 10 members tied to the quota, Iraq being excluded, rather than the official output roof.
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
Taiwan has experienced its most significant improvement in the QS World University Rankings by Subject, data provided on Sunday by international higher education analyst Quacquarelli Symonds (QS) showed. Compared with last year’s edition of the rankings, which measure academic excellence and influence, Taiwanese universities made great improvements in the H Index metric, which evaluates research productivity and its impact, with a notable 30 percent increase overall, QS said. Taiwanese universities also made notable progress in the Citations per Paper metric, which measures the impact of research, achieving a 13 percent increase. Taiwanese universities gained 10 percent in Academic Reputation, but declined 18 percent
UNDER DISCUSSION: The combatant command would integrate fast attack boat and anti-ship missile groups to defend waters closest to the coastline, a source said The military could establish a new combatant command as early as 2026, which would be tasked with defending Taiwan’s territorial waters 24 nautical miles (44.4km) from the nation’s coastline, a source familiar with the matter said yesterday. The new command, which would fall under the Naval Command Headquarters, would be led by a vice admiral and integrate existing fast attack boat and anti-ship missile groups, along with the Naval Maritime Surveillance and Reconnaissance Command, said the source, who asked to remain anonymous. It could be launched by 2026, but details are being discussed and no final timetable has been announced, the source
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft