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No need to pump more oil, OPEC president says

OPEC's president said yesterday that the cartel's members excluding Iraq were producing 29.7 million barrels per day (bpd), 2.2 million bpd above the official quota, and there was no immediate need to pump any more oil.

"Our latest information is that the OPEC-10 production now is 29.7 million bpd. There is [more than] 2 million [bpd] over [official] production," Sheikh Ahmad Fahd al-Sabah, also Kuwait's energy minister, told reporters.

"We think the market is well supplied ... I think by numbers we already have more than the 500,000 bpd of real production," he said, referring to a proposed 500,000 bpd increase by mid-May.

"In Isfahan, production was 27.7 million barrels per day," he said, referring to a March OPEC meeting in Iran.

"The market needs real supply and this is what is on the market. Since Isfahan, two million barrels has been added to the market," Sheikh Ahmad said.

Asked what OPEC would do if prices continued to slide, he said: "I think prices will continue at this level between 45 to 55 dollars," for Brent crude.

"Yes, we accept less than this," he said when asked if this was acceptable to the cartel.

The drop in prices ruled out the need for further discussions on raising output, the Kuwaiti official added.

Oil prices fell further in Asian trading yesterday as the market switched its focus to the possibility that the US economy may be slowing, thus easing pressure on supplies, dealers said.

The light, sweet crude contract for June on the New York Mercantile Exchange fell US$0.54 to US$49.18 a barrel in late afternoon trading in Asia. Unleaded gas fell US$0.02 to US$1.4730 a gallon (3.8 liters).

On Friday, oil prices closed below US$50 a barrel, a psychologically significant mark, for the first time in more than two months after declining by more than US$5 a barrel over the previous week.

Last week, the US Energy Department said inventories of crude oil in the largest energy-consuming country grew by 5.5 million barrels to 324.4 million barrels, or 9 percent above year-ago levels -- the 10th time supplies have risen in 11 weeks.

Also last week, the US Commerce Department announced that the US economy grew at a slower-than-expected rate of 3.1 percent in the first quarter, easing concerns over booming crude oil demand. It was the slowest rate of expansion in two years.

Traders, though, are still leery of declaring the end of high oil prices, saying that another run-up above US$50 a barrel would hardly come as a surprise given still-tight global supplies and market jitters about even the slightest output disruption.

While oil futures have fallen from their recent peak above US$58 a barrel, prices remain more than 30 percent higher than a year ago.
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