VIENNA, (Reuters) – Oil prices of more than $100 a barrel are unlikely to sway OPEC ministers meeting in Vienna this week into raising output, which they say is more than enough.
Consumers, led by top fuel burner the United States, have urged the Organization of the Petroleum Exporting Countries (OPEC) to produce more oil in an attempt to cool prices, which were trading at $101.29 a barrel by 1027 GMT, down 55 cents from Friday’s close.
OPEC ministers have said prices have been driven by factors beyond their control, including a weak U.S. dollar and political tension, and not by any lack of oil.
Libya’s top oil official Shokri Ghanem, the first to arrive in Vienna ahead of Wednesday’s meeting, said he did not expect a change.
“It is not a good time for action, it is a time for watching,” he told Reuters on Monday.
That could even be the case for the rest of the year, OPEC sources said.
“It looks like a relaxed year in terms of the supply-demand balance,” said an OPEC source. “OPEC could more or less keep production steady for the rest of the year.”
The producers have forecast global demand growth of 1.23 million barrels per day (bpd) this year, which is more conservative than data from the International Energy Agency, which represents consumer interests.
Oil prices drew some support on Monday as OPEC members Venezuela and Ecuador sent troops to their borders with Colombia.
Venezuela is also in dispute with U.S. oil major Exxon Mobil, which has won court orders freezing up to $12 billion of the country’s assets.
OPEC’s most influential member Saudi Arabia would not be led on the outcome of this week’s meeting.
But the kingdom’s Oil Minister Ali al-Naimi said in an interview published at the weekend prices would not fall below $60-$70 a barrel as this was the minimum level at which alternatives to conventional oil were economically viable.
“From now there’s a line below which prices won’t fall,” Naimi was quoted as saying in an interview with Petrostrategies magazine.
OPEC, which pumps more than a third of the world’s oil, last met on Feb. 1 and left output unchanged. It has not agreed a formal increase since September last year.
A Reuters survey at the end of last week found analysts were unanimous in predicting no official change this week.
But ministers are very likely to call an extraordinary meeting in the next month or two to review the situation, delegates have said.
In addition, a formal deal on Wednesday to hold supplies steady would still leave latitude for quietly adjusting output to reflect demand.
“I wouldn’t rule out further supply gains, but not necessarily associated with a formal quota increase,” said Antoine Halff of Newedge brokerage.
Whether that would have any impact on price remains to be seen.
“It’s become hard to figure what would lower prices these days — rising stocks and weakening fundamentals have not kept them from rising,” Halff said.