UAE: OPEC Ready to Boost Oil Supply
Source: Bloomberg (2/14/11)
"IEA forecasts global consumption will rise to 89.3 Mbbls./day in 2011."
OPEC producers are watching prices because they don't want rising crude costs to destroy demand, he said, adding, "We don't want to see demand adversely affected by high prices."
Oil prices have risen in reaction to global events like the uprising in Egypt that led President Mubarak to step down after 30 years of rule, he said. Brent crude exceeded $100 last month.
There is a "decoupling" between prices for Brent and U.S. benchmark West Texas Intermediate, Al Hamli said. This was because of "technical reasons," including inventories in the US and the actions of traders, he said at an event to commemorate OPEC's 50th anniversary.
Brent crude for April settlement climbed as much as $3.02 to $103.9/barrel and was at $103.7 at 3:23 pm local time on the ICE Futures Europe exchange. WTI for March delivery on the NYMEX was at $86.3/barrel, up $0.72.
OPEC may boost supply as crude demand rises along with a recovery in global economic growth to rates approaching those last seen before the financial crisis, Saudi Arabia's Oil Minister Ali al Naimi said last month.
On January 24, Al Naimi said OPEC's policy "is to meet any increase in oil demand to maintain the supply demand balance."
The UAE is producing 2.2 Mbbls./day, within its OPEC quota, Al Hamli said. He said the UAE's "sustainable" output capacity is 2.8 Mbbls./day.
On February 10, the IEA raised its crude demand-growth forecast for a fifth consecutive month. Global consumption will rise in 2011 1.7%, to 89.3 Mbbls./day, it said. The forecast equates with the low end of the demand increase Al Naimi said OPEC foresees.