OPEC Will Not Act on Production This Week: Saudi Arabia
An OPEC summit this week will not act on production policy, Saudi Arabia's oil minister said on Tuesday, reducing the prospect of an imminent output boost to lower record prices.
Ali al-Naimi, oil minister for the world's top exporter and OPEC's most influential voice, also said crude prices that have risen towards $100 a barrel did not reflect supply and demand fundamentals.
"This is not a normal OPEC meeting," Naimi told a news conference ahead of the summit of OPEC heads of state on Nov. 17-18.
"This is not a place to focus on price, incremental production or a decrease and so forth."
Oil's surge this year has prompted further calls from consumers for OPEC, which pumps more than a third of the world's oil, to increase supplies.
Speculators, Politics and Dollar to Blame
But the Organization of the Petroleum Exporting Countries has blamed factors outside its control -- speculation, political tension and a weak dollar, for the rally.
"The price of oil is a market determined process," Naimi said. "There are ... a multitude of factors influencing the price which we have the least influence on."
The Saudi minister said the views of those that question the adequacy of oil supplies and trading by speculators were among the factors sending prices higher.
"Oil experts worldwide that talk about high demand, peak oil, we're going to run out in the next few years, all of these are the pessimists that are agitating the speculators," he said. "The fundamentals do not support the current price."
Consuming nations as represented by the International Energy Agency are concerned about the impact of record oil costs on economic growth. Naimi said OPEC did not want to see economies suffer.
"First of all, we do not wish any country to go through a recession, particularly the biggest consumer in the world," he said, referring to the United States. "We are not planning for that to happen."
OPEC is expected to focus in Riyadh on longer-term issues and may call on consumers to play their part in helping ensure energy security by providing assurances of demand for OPEC oil.
The group's oil ministers are still expected to discuss the market informally while they are in the Saudi capital, a delegate said.
OPEC's next policy meeting is on Dec. 5 in Abu Dhabi.
Speaking earlier on Tuesday in Islamabad, OPEC President Mohammed bin Dhaen al-Hamli said that was where the group would make its next decision on supply.
"There we have to look at the market fundamentals and we will take a decision accordingly," he said, asked if he believed OPEC needed to raise production.
The Saudi minister also reiterated that his country's production capacity stood at 11.3 million barrels per day (bpd) and would rise by another 500,000 bpd within the next two to three months.
OPEC holds 3 million bpd of idle production capacity, Naimi said. He also reiterated Saudi Arabia and OPEC's willingness to make up for any disruption to supplies if needed.