Sunday, December 2, 2007

OPEC Won't Boost Crude Output, Algeria's Khelil Says (Update1)

By Ahmed Rouaba and Abeer Allam

Dec. 2 (Bloomberg) -- OPEC won't increase crude-oil supply to world markets to meet rising demand for energy during the winter because stocks of fuel are already ``high,'' Algerian Oil Minister Chakib Khelil said.

``We will not increase output unless there is a need in the market,'' Khelil told reporters during a mining conference in Algiers today. ``For the moment there is no need. Stocks are high.''

The U.S. and other oil consuming nations are pressing OPEC, which produces more than 40 percent of the world's oil, to increase output again to ease crude oil prices that tripled in four years to a record $99.29 on Nov. 21 in New York.

Saudi Arabia's Oil Minister Ali al-Naimi said yesterday that inventory levels were ``very comfortable,'' and the 12- member Organization of Petroleum Exporting Countries may not need to increase oil supply when it meets Dec. 5 in Abu Dhabi.

Inventory ``levels are still in the five-year range,'' said al-Naimi, speaking to reporters in Doha, Qatar, before an Arab oil ministers' meeting. ``It's important to look at the information first, jointly, so we can come to a consensus.''

The U.S., the world's largest oil consumer, may go into recession next year and trigger an economic slowdown across the world, Qatar's Oil Minister Abdullah al-Attiyah told reporters yesterday in Doha.

No `Shortage'

Crude prices shouldn't be blamed for causing a recession, and there is no ``shortage'' of oil in the market, al-Attiyah said.

Venezuela's Minister of Energy and Oil Rafael Ramirez said speculation was responsible for the current price of oil and that OPEC doesn't need to increase supply. The decline of the price in the past week shows that there is enough oil in the market, he said in remarks broadcast on state television.

Oil dropped 9.7 percent last week, the biggest weekly loss since April 2005, on concern slowing economic growth will cut energy demand. Crude oil for January delivery declined $9.47 to $88.71 a barrel last week on the New York Mercantile Exchange.

Saudi Arabia, OPEC's biggest producer, is adding 500,000 barrels of spare capacity in December to ensure that consumers are adequately supplied. The country is producing 9 million barrels a day, al-Naimi has said.

-- With reporting by Ayesha Daya and Glen Carey in Doha and Steven Bodzin in Caracas. Editors: Guy Collins, Tony Barrett

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