Vienna: Opec is likely to hold output levels steady when ministers of the 12-nation group meet today, a senior Libyan oil official suggested on the eve of the gathering - comments that reflected producer satisfaction with present prices.
"I don't think there is a real need for doing anything," said Shokri M. Ghanem, head of the National Oil Corp of Libya.
Asked if and when the Organisation of Petroleum Exporting Countries might raise production ahead of the high-demand summer driving season, he said only: "If there is a need for more oil we will put in more oil." After two cuts in the four preceding months, the likelihood of Opec doing nothing makes sense from the organization's viewpoint - a stance reflected in a series of recent statements by oil ministers of member nations. Prices have declined from the record highs of above $78 a barrel last summer. But at around $60 a barrel, they are still more than 40 per cent above 2004 levels, the result of a market rise beginning nine years ago when a barrel of crude went for as little as $10.35.
Yesterday, oil prices edged higher ahead of US government oil inventories data expected to show declines in some fuel stocks. Light, sweet crude for April delivery gained 31 cents to $58.24 a barrel on the New York Mercantile Exchange, while Brent crude for April rose 10 cents to $61.00 a barrel on the ICE Futures exchange.
Present prices leave comfortable profit margins both for producers and the major oil companies while remaining below the pain threshold that leads to less world consumption - and increased interest in alternative fuels such as ethanol and wind and nuclear energy. So it looks to be in Opec's interest to keep pumping at present levels - but be ready to raise or lower output if prices fall too far, or rise too high.
