Confirming sentiment that the Organization of Petroleum Exporting Countries (OPEC) is poised to keep its current quota, a key committee recommended that the production ceiling be held at 27 million barrels a day, the group's president said. The group's members were split on whether a cut could come before the group meets on March 16 in Iran.
Venezuelan Oil Minister Rafael Ramirez won't be in attendance after his country met with Chinese delegations to sign several trade agreements.
Instead, the South American country's OPEC governor Ivan Orellana will attend. OPEC is scheduled to start its official meeting at 10am.
Kuwait's oil minister Sheik Ahmad Fahd al-Ahmad al-Sabah, who heads OPEC, said the recommendation on production was made Saturday evening by the group's Ministerial Monitoring Committee.
"We believe that we [will] continue with the ceiling, but at the same time [need] to comply with the decision we made in Egypt," he said, adding that some cuts had already been made.
OPEC's current quota is 27 million barrels a day, a decision reached during its meeting in December in Cairo, when it agreed to reduce output by 1 million barrels a day. But production is about 29.6 million barrels a day.
Al-Sabah said the 10 members of the group subject to quotas are overproducing by some 500,000 barrels daily. Iraq is not subject to the quota.
Most OPEC oil ministers said on Saturday there's no need to modify output, despite prices hovering near US$50 -- a feeling that could cause more consumer concern about the price of heating oil this winter. Several ministers suggested cuts were instead possible at a meeting in March in Iran, or beforehand if conditions warrant.
"I don't believe in this meeting we can change anything," Iran's oil minister Bijan Namdar Zangeneh said. Instead, he said OPEC should keep its focus on improving its compliance with existing output targets.
The full group would meet yesterday to decide whether to adopt the recommendation of the committee, which takes stock of conditions affecting the oil markets and offers policy recommendations.
"I think the consensus is that we're not going to decrease output," Algerian Oil Minister Chakib Khelil said.
OPEC, which accounts for one-third of the world's oil supply, is seeking to keep its buyers -- and their consumers -- from becoming jittery that prices could resume their climb. Prices hit a record US$55.17 per barrel in late October.
Al-Sabah said the cartel was closely monitoring prices and weighing options, and could decide to change its output policy next month via a telephone conference if necessary.
Asked if there will be a cut in March, or before, Libyan Oil Minister Fathi Hamed Ben Shatwan said it depended on the market. "If there are some problems -- a decrease in price -- we have to take action," he said.
Qatari oil minister Abdullah bin Hamad al-Attiyah said OPEC would probably have a 1.5 million barrel a day surplus during the second quarter. "Now, everybody is not concerned, but by the second quarter there will be a big concern," he said.
Saudi Arabian Oil Minister Ali Naimi said the price of oil has not worried OPEC.
"The world economy has grown so big, a little fluctuation here and there won't hurt it," Naimi said. "You have to keep looking at the inventories, looking at the economy. If all the signs are positive, then it's OK."
It's a sentiment unlikely to ease consumer fears of higher prices for oil needed to heat homes this winter.
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