Iran minister says OPEC oil output not to be increased yet

27 March 2011 27 March 2011

BonTrade

OPEC member countries will not increase crude oil output just yet, according to the Iranian Oil Minister Massoud Mirkazemi who holds the OPEC rotating presidency.

Speaking on Saturday, the minister told Mehr News Agency that there is no need for an OPEC emergency meeting in the current situation as the oil market is well balanced.

The official said that OPEC only pumps about 30 million barrels of oil to the world markets per day, nearly a third of the global oil production.

US Dollar Weakness Lifting Oil Prices?

“Oil prices were pushed up by political crises in some countries of North Africa and the Persian Gulf as well as due to the global economic recovery.” he said, adding that an extraordinary meeting is not necessary despite oil prices now trading well over $100 per barrel.

Mirkazemi went on to say that if OPEC member countries request an extraordinary meeting, OPEC is ready to organise it shortly. He further named weakness in the US dollar as the reason behind the rise in crude oil prices.

OPEC will cut oil shipments to their lowest level since October as civil war halts exports from Libya, according to tanker tracker Oil Movements. Oil Movements calculates crude oil shipments by keeping a tally of tanker rental agreements.

OPEC oil exports are due to fall to 23.03 million barrels a day in the four weeks to 9th April, down 1.8 percent from 23.46 million in the period to 12th March, an Oil Movements consultant said in a recent report.

JP Morgan raised oil price forecasts for 2011 as a protracted outage in Libya and the run up to summer demand require additional oil supplies from OPEC member countries.

Brent Oil Price Forecast

JP Morgan raised its Brent oil price forecast for the second quarter of 2011 to $118 a barrel from $105, which combined with smaller increases for the third and fourth quarters, results in an increase of $6 a barrel for the full year 2011 projection to $110 a barrel.

JP Morgan analysts headed by Lawrence Eagles said “There is a real risk that oil producers respond to, rather than pre-empt, price signals, or perhaps wait until OPEC’s meeting in the middle of June before raising oil output. By then, it will be too late to prevent higher oil prices.”