OPEC will watch price before going ahead with 500,000 barrel increase

OPEC’s president said June 25 that the cartel would watch oil prices further before deciding whether to increase the output ceiling.

Sheik Ahmed Fahd Al Ahmed Al Sabah, who is also Kuwait’s oil minister, spoke to reporters on the sidelines of a parliament session.

“I think we’ve got to wait for a while to see exactly what is the behavior of the prices, because until now it’s not clear,” he said. “When you (keep) following the prices, they are moving up and down.”

Al Sabah said he spoke June 24 by phone with his Saudi and Qatari counterparts on the possibility of increasing OPEC production ceiling and was also calling other OPEC ministers for their opinions.

“We’ve already started consultations but the prices now started to come back to normal and this is what we were thinking (would happen),” Al Sabah said.

“I hope very soon we will have an opinion on what will be the situation,” he said, adding that he couldn’t give a specific timing for a decision on the possible increase.

June 20, Al Sabah said that if oil prices stayed at record highs, OPEC would start consultations June 24 to increase production by 500,000 barrels a day.

Crude oil futures ended a strong week at a new settlement high of just under $60 a barrel June 24, lifted by rising fear that petroleum demand will outpace supply.

Benchmark crude futures for August delivery on the New York Mercantile Exchange closed at $59.84 a barrel June 24, a new settlement record for a front month contract since crude futures began trading on the exchange in 1983.

Asked about the $60-barrel highs of the last few days, Al Sabah said he expected the price to drop to a normal level, referring to $50-51 as normal.

In mid-June the oil cartel agreed to raise its official production ceiling to 28 million barrels, starting July 1. Including Iraq, which is not bound by the quota system, OPEC is pumping close to 30 million barrels a day, or about 35 percent of global demand.

—The Associated Press