OPEC considering increasing oil output in December

OPEC may increase their oil output targets when the group meets in Luanda, Angola on December 22. OPEC’s Secretary-General, Mr. Abdalla el-Badri, said if oil prices continue to rise; if the global economy continues to recover and there is fall in global inventories, the organisation would not hesitate to increase production targets at its December meeting.

Crude oil slipped towards $80 yesterday as a stronger dollar encouraged investors to lock into profits from a 12 month high on Wednesday. US crude oil futures fell 63 cents to $80.74 a barrel by 1205 GMT, having dipped as low as $79.90. London Brent crude fell 49 cents to $79.20. On Wednesday, US crude surged to $82, the highest price since October last year, as weekly US government oil data showed a large drop in gasoline inventories over the last week and fuel demand rising about 4 per cent year-on-year.

El-Badri said OPEC was comfortable with prices at current levels, particularly compared to the price drop to near $30 late last year. “If these prices will continue; if we see the stocks go back to normal levels, the five-year average; if we see there is real economic growth, I am sure our member countries will take a decision to increase the production. This is up to the ministers to decide.

“The market is improving, but we would like to see evidence. If we see a shortage, OPEC will not hesitate to increase the production,” eI-Badri said. According to him, “When I go back to December and I look at the price now, I think we are in a very comfortable zone at this time.”

The current prices, he said, would ensure the revival of all 35 upstream projects, which OPEC had put on hold due to the drop in oil prices, to boost output capacity. El-Badri, however, declined to reveal what the projects are, but said collectively, they would account for 1.2 million barrels per day of production capacity.

Tags:  oil output, OPEC