UAE oil minister predicts Opec will reach consensus today
VIENNA // Opec will reach a consensus today on how much oil to supply to world markets in coming months, the UAE oil minister predicts.
Despite a geopolitical situation that is stoking tensions among members of the group that controls about 40 per cent of global oil supply, Opec will stick to its task of keeping the market adequately supplied with crude, Mohammed al Hamli indicated ahead of today's ministerial gathering at the Opec headquarters in Vienna.
"In Opec we reach unanimous decisions," he said this morning, as delegations from 11 of the group's 12 member countries prepared to kick off what could be a stormy negotiating session behind closed doors.
Absent at the start of the meeting was a delegation to represent embattled Libya.
"We always react to the market. If there is a need for more oil we will demonstrate our ability to bring more oil to the market, that we have the capacity," Mr al Hamli said.
Reinforcing the determination now apparent among veteran Opec oil ministers to present a united front later today, the influential Saudi oil minister Ali al Naimi continued to refrain from making any public statement on the potential outcome of today's deliberations. He firmly declined to comment during the 15-minute open question period ahead of the meeting, telling reporters not to waste their time.
For his part, Mr al Hamli declined to predict the outcome of the meeting but said he saw a need for increased crude supplies later this year.
"Today the market is well supplied, but we have to look to the second half. The second half of the year is going to be tight," he predicted.
Higher oil demand was coming from Asian economies, especially China and India.
"We've seen what happened in Japan," Mr al Hamli added.
Ehsan ul-Haq, a senior market consultant with KBC, a UK energy economics firm, said Japanese demand for oil to fuel electricity generation has risen sharply following the earthquake and tsunami that in March severely damaged the country's Fukushima atomic power plants. The ensuing nuclear crisis in Japan has had global ramifications, with both Germany and Switzerland recently pledging to phase out nuclear power.
Nevertheless, the overall state of the global economy was a concern for Opec.
"The current oil price is a problem for some consuming countries," Mr al Hamli said.
Those might even include the UAE, where petrol is currently in short supply in emirates other than Abu Dhabi, which accounts for more than 95 per cent of the country's current 2.7 million barrels per day of crude production.
Mr al Hamli declined to answer questions about the domestic fuel shortage yesterday.
In his prepared opening address to the Opec conference, Mohammad Aliabadi, the recently appointed acting oil minister of Iran who, as of this week, is serving as the Opec president, said there was still much uncertainty about the strength of the world economic recovery.
"There are still some notable points of concern. These include the persistently high level of unemployment, the sovereign debt crises in major [Organisation for Economic Co-operation and Development] countries, potential overheating in many emerging economies and rising inflation across the globe," he said.
The past six months have been a "nervous" time for the oil market, Mr Aliabadi continued.
"Throughout, however, fundamentals have remained sound. Very much due to Opec's efforts, the world remains well supplied with oil, with ample spare capacity and adequate stock levels."
Published: June 8, 2011 04:00 AM