North Sea output hurts oil prices, OPEC says
North Sea output hurts oil prices, OPEC says
DOHA (Reuter): OPEC President Ida Bagus Sudjana of Indonesia arrived in Qatar yesterday at the start of a Gulf Arab tour and said high North Sea oil production was affecting oil prices.
"North Sea over-production will upset the market and make prices (go) down," Sudjana, also Indonesia's energy minister, told reporters after arriving in Qatar.
"So far I am satisfied with the movement of prices after the Bali meeting. Now it is rising a little bit. We try to maintain production to maintain prices but on the other side North Sea production is increasing so...it will make the prices (go) down," Sudjana said.
He said he would discuss with Qatar's Energy Minister Abdullah al-Attiyah "the oil market and other OPEC matters".
Oil ministers of Qatar and Kuwait have blamed high output from North Sea oilfields for weak world oil prices.
Sudjana, who is also visiting Saudi Arabia and the United Arab Emirates, said on Friday he would seek a solution during his trip to Gabon's demand to reduce its contribution to the Organization of Petroleum Exporting Countries (OPEC).
He said he would stress there was a need for Qatar, Saudi Arabia and the UAE to show consideration for Gabon.
Gabon's Oil Minister Paul Toungui has denied suggestions his country has withdrawn from OPEC, saying any withdrawal would depend on the response from other member states to a request for a cut in its contributions.
Output
Meanwhile, the Middle East Economic Survey (MEES) reported yesterday that OPEC output in December rose by 30,000 barrels per day (bpd) to 24.99 million bpd which does not give the oil group much leeway in maintaining a balanced market,
It said the output was "marginally short of 25 million bpd."
"At the 25 million bpd level of output -- nearly 500,000 bpd above the official OPEC ceiling of 24.52 million bpd -- OPEC does not leave itself much leeway in terms of maintaining even a balanced market, let alone a scenario for rising prices, in the coming year," the authoritative newsletter said.
A Reuters survey had put the December output of OPEC at 25.19 million bpd, up 110,000 bpd from Reuters November estimates of 25.08 million bpd.
OPEC agreed in Bali, Indonesia, in November to freeze its ceiling at 24.52 million bpd through the end of 1995 to try to tighten the market and shore up oil prices.
MEES said Iran maintained production close to the 3.7 million bpd in December for the second month running. "However, Iranian production for the fourth quarter as a whole averaged 3.625, only modestly above its 3.6 million bpd OPEC quota. For the full year 1994 Iranian production at 3.583 million bpd fell comfortably within the quota limit."
The newsletter said its estimates put OPEC production for 1994 at 24.786 million bpd "an increase of only 103,000 bpd or 0.4 percent over the 1993 level of 24.683 million bpd."
It said a combination of warm winter weather and higher "output from non-OPEC suppliers, and to a certain extent from OPEC as well, is already casting unwelcome shadows over the outlook for 1995 - to say nothing of the specter of Iraq's possible return to the market sometime in the second half of the year, even if this is looking distinctly less likely in view of Washington's ultra-tough stance against Baghdad."
The U.N. Security Council decided on Thursday to make no changes in sanctions imposed on Iraq, which include a ban on the sale of Iraqi oil, since its August 1990 invasion of Kuwait.
The sanctions have remained unchanged since they were first imposed. The council reviews them every 60 days.