Opec may turn down US call to increase production

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Oil hovers below $79 after 3-day slideOil spikes to USD 81.26 a barrelOil eases to USD 78.65 a barrelOil tops $80, highest since Oct 14, 2008

Nov 15: Opec oil nations plan to reject US calls to increase production as crude prices remain stuck above $90 a barrel, according to a draft of the group’s statement to be released this weekend.

The group will instead reiterate a commitment to ensure energy supply and seek to reduce their carbon emissions released from pumping and refining oil and gas, according to the statement to be issued in Riyadh, which was seen by Bloomberg and confirmed by three officials from the group who spoke on the condition of anonymity.

Their intention to keep production at current levels signals consumers are unlikely to see relief from rising oil prices, which reached a record $98.62 a barrel on Nov. 7 in New York. A pledge to reduce carbon dioxide threatens to force investors in Opec nations such as Royal Dutch Shell Plc and Exxon Mobil Corp. to incur additional costs at their operations.

“I don’t think we can expect any move from Opec to reduce prices,’’ Jean-Francois Gruson, an economist with the Institute for French Petroleum said on Thursday. The group will take a “wait-and-see’’ approach, he said.

Saudi oil minister Ali al-Naimi and his counterparts from Qatar and Algeria have said this week that the group won’t decide on production quotas at the Nov. 17-18 heads of state summit in Riyadh and will instead take up the matter at a Dec 5 meeting in Abu Dhabi.

The Organisation of Petroleum Exporting Countries’ summit is the third for its heads of state since the group was founded in 1960. “Since fossil fuels are going to be around for some time, we need to develop technology to reduce’’ carbon emissions, Saudi Arabian Oil Minister Ali al-Naimi said in a speech in Riyadh on Thursday.

“We are all called upon to address the climate change concern and find a balance that is a possible, comprehensive and cost-effective solution.’’ High oil prices are already damaging demand in some industrialized nations, according to the International Energy Agency, which this week cut its forecasts for fourth-quarter world consumption for a third time since August.