By ALEX LAWLER & SIMON WEBB | REUTERS
VIENNA: OPEC may not need to adjust output policy this year if the oil market remains stable and the global economy continues to recover, the oil minister of its top producer, Saudi Arabia, said on Monday.
"The economy is doing well, it will do better down the road.
I don't see any reason to disturb this happy situation," Ali al-Naimi told reporters as he arrived for a Wednesday meeting of the group that looks set to keep a lid on output.
"The market is in balance, the price is great, inventories are coming down so why should we do anything?" he said.
Pressed on whether OPEC needed to change its current output ceiling later this year, Naimi said: "That remains to be seen, if it stays like the way it is, no." Algerian Energy and Mines Minister Chakib Khelil had earlier said OPEC could wait until the second and third quarters to deal with the demands of a recovering economy.
OPEC also has a further meeting scheduled in September.
"The economy is looking like it is recovering," Khelil said.
"I expect prices to hold pretty well until the end of this year despite the surplus in supply," he told reporters.
Naimi, who has said $70-80 per barrel was a fair price for consumers and producers alike, said he was happy with current levels around $80.
"It has stayed very well within the range of $70-$80....it is in a very happy situation," he said.
COMPLIANCE NOT A PROBLEM Benchmark US crude futures were trading just shy of $80 per barrel on Monday, down from Friday's $81.24 settlement, pressured by a strengthening dollar and expectations China might tighten credit again.
And while several OPEC ministers heading for Wednesday's meeting have stressed members should adhere to output targets set in December 2008 to cut production 4.2 million barrels per day (bpd) to 24.84 million bpd, Naimi did not see a problem.
"Compliance is there," Naimi said, replying "yes" when asked by reporters if he was happy with compliance.
"The market is happy , there is balance, there are no shortages, there is enough investment going on," Naimi added.
In the past year, rising prices and a hesitant global recovery have encouraged OPEC members to add supply to the market. In February, OPEC delivered just 53 percent of pledged output curbs it agreed in late 2008 - down from 81 percent a year ago.
The icing on OPEC's cake is that from here, demand could pick up enough to mop up the extra crude from its members as China leads a global economic recovery.
Forecasts from OPEC as well as the International Energy Agency (IEA) and the US government all suggest demand could continue to rise this year.
Global growth could be 4 to 4.5 percent this year instead of the 3.4 percent predicted in November, the head of the Organization of Economic Cooperation and Development (OECD) told Reuters in an interview on Monday.
"The reason why the global economy is going to grow faster is because China and India are pulling very hard," OECD secretary general Angel Gurria said.
Developed countries have shown little appetite for more oil as their economies emerge from recession, leaving oil producers to fight for market share in developing giant China.
Arab News
