OPEC won't raise output quotas at a meeting this week and will consider a supply reduction in the future because world economic growth is slowing and oil inventories are ample, Qatar's energy minister said.
"The world has sufficient supply, even oversupplied in some places," Qatar's Abdullah bin Hamad al-Attiyah said in an interview with Bloomberg News in Doha yesterday. "So to increase, I don't think this is on the agenda."
He said the 13-member producer group, the supplier of more than 40 percent of the world's oil, would consider a production cutback "if the world economy moves toward a recession." Weaker economies may lead to reduced demand for energy, he said.
The Organization of Petroleum Exporting Countries is expected to keep its output target unchanged at 29.67 million barrels a day when it meets in Vienna tommorrow, according to 29 of 32 analysts surveyed between January 24 and Monday by Bloomberg News.
OPEC officials from Iran, the United Arab Emirates and Ecuador have also said in the past few days that more oil isn't needed.
Oil prices have tumbled from a record US$100.09 a barrel set on January 3 amid signs of an economic slowdown in the United States, the world's biggest energy consumer. Crude oil for March delivery was up 45 cents at US$92.09 a barrel in electronic trading on the New York Mercantile Exchange ay 9:28am London time.
OPEC "should study the numbers very, very, very carefully because we don't want to take ourselves by surprise and repeat 1997 when we increased and a few weeks later Asia economies crashed and oil fell from $19 to under $7," al-Attiyah said.
Ministers often say they regret that decision, taken at a meeting in Jakarta in late 1997, which coincided with a collapse in Asian currencies and economies, leading to falling oil prices in 1998.
The International Monetary Fund on Tuesday cut its forecast for global growth this year to 4.1 percent, the weakest pace since 2003, as tighter access to credit in the US weighs on other assets and economies.
"I don't think OPEC will push for a cut," said John Sfakianakis, chief economist at HSBC-controlled Saudi British Bank, said in a telephone interview from Dubai. "The expectations for this year is that oil prices will come down."