AS world oil exporters meet today, Nigeria seems very comfortable with the prevailing oil prices, therefore may not likely support any production change at the Organisation of Petroleum Exporting Countries (OPEC) meeting in Vienna, Austria.

The Minister of Petroleum Resources, Rilwanu Lukman recently said he
would like to see oil prices remain at between $70-80 a barrel and will
not push for production changes at the meeting to consider oil output
policy.

Lukman said Nigeria was pumping around 1.7 million barrels per day
(bpd) of oil, up from just 1.2 million bpd at the height of violence in
the Niger Delta, and that it was therefore meeting its OPEC quota.

“We would like to see the price remain between $70-80. For the production, it is okay as it is for now.”

Attacks by militants in the Niger Delta on oil pipelines and facilities
over the past three years have prevented Nigeria from pumping much
above two thirds of its 3 million bpd installed capacity.

But an amnesty offer to gunmen from President Umaru Yar’Adua has brought a lull in the violence.

On the impact of the amnesty offer, Lukman said, “At the height of
militant activity, oil production dropped to 1.2 million, but now we
are doing 1.7 million. We are happy, things are getting better. We hope
it will improve more with the amnesty programme in place,”.

There are indications that more of the OPEC ministers would concur with
unchanged oil production targets, on expectations that demand would
strengthen over winter as the global economic recovery gathers pace.

Qatar’s oil minister Abdullah bin Hamad Al Attiyah, said OPEC will
likely keep output quotas unchanged, adding that OPEC may extend the
rollover because the market situation needs this to balance demand and
supply,”

In recent weeks, some officials from OPEC, which produces about 40 per
cent of the world’s oil, said they are happy with oil prices around $70
a barrel.

OPEC had last year agreed to cut output by 4.2 million bpd, which is
equal to about five per cent of daily world demand, from its output
levels to prop up slumping prices. Compliance will be discussed and
emphasised during the meeting.

Meanwhile, Iran’s OPEC Minister, Mohammad Ali Khatibi said he would
seek to discuss how to address an expected overhang in crude oil
supplies.

According to him, demand for oil produced by the oil cartel is expected
to be around 28 million barrels a day in the first quarter of 2010,
which suggests a supply surplus if OPEC production remains at current
levels.

Khatibi said secondary sources estimated OPEC’s production in July at
around 28.7 million barrels a day, adding that if OPEC continues this
production, stockpiles will build by 700,000 barrels per day.

Total oil output by OPEC’s 12 members rose by 0.9 per cent in July
versus the previous month, based on input from analysts and government
sources.

Source: Guardian Newspapers Limited

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