DOHA // Crude retreated yesterday as Opec ministers considered raising the group's output target for the first time in more than two years.
North Sea Brent crude fell below US$115 a barrel yesterday from Monday's high of $118.50, and New York crude retreated from a 29-month high above $106, after Sheikh Ahmad al Abdullah al Sabah, Kuwait's oil minister, said a special meeting was on the cards.
"I've talked to [the Opec secretary general] Abdalla Salem el Badri in this regard and he is calling everybody and making a consensus on whether we'll need an Opec meeting, an urgent meeting," the oil minister said in Kuwait City. "We have to find out at the meeting whether there is a need for an increase or not."
In Doha yesterday, Dr Mohammed Salah al Sada, the Qatari minister of energy and industry, urged investors to take heart from Opec's previous record of keeping the world supplied with oil even during periods of conflict.
"The Middle East has not been the most stable region in the world, and at the same time it has 60 per cent of the world's oil reserves," he told an energy conference in the capital.
"Despite a number of wars in the heart of the Gulf, the countries in this region take whatever measures are necessary to keep the supplies going.
"Libyan production was definitely impacted recently, but global supplies and stocks were not affected. Opec and some non-Opec countries made up for the loss in a timely manner."
The soothing comments came as fighting intensified in Libya, which has Africa's largest oil reserves.
The International Energy Agency estimated Libya's oil output had fallen by as much as 1 million barrels per day. That has directly affected European refiners, which have recently depended on the country's high quality crude to enhance narrow profit margins. The situation raises fears of local fuel shortages if processing runs are curtailed.
"The loss of Libyan light, sweet crude poses a threat to the profitability of Europe's already troubled refining industry," JBC Energy, based in Vienna, said yesterday.
Opec's next scheduled meeting is on June 8 in Vienna. But several members of the group, including Saudi Arabia, the UAE, Kuwait and Nigeria, have already informed customers that requests for additional crude would be met.
"We will do whatever Opec asks its members to do. Whatever is needed under Opec directives," said Levi Ajuonoma, a spokesman for the Nigerian National Petroleum Corporation.
But oil markets are expected to remain volatile as protests continue in parts of the Mena region.
[ tcarlisle@thenational.ae ]