MercoPress. South Atlantic News Agency

OPEC considers world oil market “well supplied”

Oil Petroleum Exporting Countries ministers consider the world oil market is “well supplied” but will attempt to help stabilize prices which are “too high” and are beginning to have an impact in the world economy.

Meeting in Vienna for two days, OPEC ministers are considering an increase in supply, possibly an additional half a million barrels per day over the current cartel production of 30,2 million bpd because "many problems are emerging in the performance of the world's economy, particularly among developing nations".

"For us prices are too high and we believe it's important something is done to stabilize the market", said OPEC president Ahmed Fahd Al Sabah who is also Kuwait's Petroleum minister.

"What's essential for us is to make it clear to the world that there's an abundance of supply and that we will continue to ensure that abundant supply; the bottleneck is in refining", underlined OPEC's president.

Al Sabah said that as oil minister of Kuwait he would like to see the quota production increased by one million bpd and "if any of the members makes the proposition I will fully support it ".

Originally OPEC members had talked of increasing production by two million barrels per day or rather announce "the availability of an extra two million bpd and see what's the impact in world markets".

"We want to prove to the world that there's no lack of oil or need to increase production. We insist the market is well supplied but they don't believe us", admitted Lybian oil minister Fathi Hamed bin Shatwan.

Saudi Arabia's oil minister Ali Naimi said his country supports an increase in quota production but also cautioned that "there's no shortage of crude supply".

The International Monetary Fund (IMF) has warned that global investment in production and refining capacity will not be sufficient to stop petrol and other fuel prices rising further over the next five years.

The Financial Times reported that the IMF - in a draft of its World Economic Outlook due to be published on Wednesday - said "production capacity is unlikely to grow enough to outpace future growth in consumption and create adequate spare capacity".

According to the FT, the IMF will say that many firms are only willing to invest in projects that would still be profitable if crude prices fell as low as $20 a barrel.

OPEC has repeatedly warned that while it will try to ease prices, it is not willing to hurt its markets by creating an oil surplus.

Concerns about the effect of surging oil prices have continued despite crude falling back from recent records above 70 US dollars the barrel to 63 US dollars.