Opec to keep watch on winter, no cut needed yet

Kuwait, Nov 14 | Updated: Nov 15 2005, 05:30am hrs
Opec is waiting for cold winter weather to set in before it charts oil supply policy for early next year, but for now sees no need to cut output, the producer groups president said on Monday. The cartel basket price has sunk close to $50 a barrel, a level some members wish to defend, as swelling fuel stocks and milder than normal weather ease fears of tight supplies.

We have to wait, still the winter has not started. For that, we have to follow the prices and Opec, they dont have a target for the prices, said Sheikh Ahmad al-Fahd al-Sabah, also Kuwaiti oil minister.

Until now, we dont have any plans to cut production. US energy secretary Sam Bodman, on a tour of Middle East producers, called on Opec at the weekend to keep pumping at its highest rate in 25 years to keep markets amply supplied.

I would hope that the (OPEC) ministers would see fit to continue supplying the market, Bodman said. Washingtons own calculations show the Organisation of the Petroleum Exporting Countries, which controls half the worlds oil exports, would have no need to curb supplies. I think our view is the market needs to continue to be adequately supplied, Guy Caruso of the US governments Energy Information Administration said on Sunday. There is a lot of uncertainty about demand and therefore its best to let the market determine how much it wants to take up.

Signalling that production cuts were not immediatly on the horizon, the worlds top oil exporter Saudi Arabia on Monday told customers in Asia and Europe it would hold crude shipments in December steady versus this month. At its meeting in September, the Organisation of the Petroleum Exporting Countries agreed to offer all its spare capacity, the lions share of which is held by Saudi Arabia, from Oct. 1 for three months but there have been no takers. Sheikh Ahmad said the cartel would decide whether to renew its offer when it meets next month in Kuwait. Oil has fallen below $58 to a four-month low as building US stockpiles have relieved consumer fears of a winter fuel crunch. US prices are more than $13 below a late-August high of $70.85.