Saudi: OPEC Will Try to Ensure Oil Supply
BEIRUT, Lebanon – OPEC (search) would do "its best" to ensure crude supplies are adequate to meet global demand, Saudi Arabia's oil minister said Tuesday as prices surged after weekend terrorist attacks in his country.
The siege at an eastern Saudi oil hub killed 22 people, most of them foreigners, adding to fears about the security of oil supplies fromSaudi Arabia (search), the world's largest exporter.
"OPEC will do its best to make the fundamentals right," Saudi Oil Minister Ali Naimi said on arriving at a Beirut hotel ahead of talks Thursday with his counterparts from the Organization of Petroleum Exporting Countries about a possible increase in oil production.
Naimi, the most influential voice in OPEC, recently urged the group to raise its 23.5 million barrel per day output ceiling by 2 million barrels a day to try to bring prices down. OPEC representatives will debate the Saudi proposal when they gather in the Lebanese capital.
The Beirut (search) meeting is drawing intense attention in light of crude prices that have recently risen above $40 a barrel. Oil ministers and analysts alike have attributed this increase to unexpected strength in global demand and tensions in oil-rich parts of the Middle East.
On Tuesday, the first day of trading on major markets since Friday, oil prices climbed in the first significant indication of market sentiment after the 25-hour shooting rampage in the Khobar area of eastern Saudi Arabia.
Contracts for Brent crude oil for July delivery trading on the International Petroleum Exchange in London were trading at $38.05 per barrel, up $1.47 from Friday's close. Futures contracts of U.S. light crude for July delivery also responded strongly, trading at $41.18, up $1.30 over Friday's close in pre-opening electronic trading on the New York Mercantile Exchange.
Both markets were closed Monday because of holidays in the United States and Britain.
The Khobar attack was the second terror strike on an oil-related target in the Arabian kingdom in a month.
Kuwaiti Oil Minister Sheik Ahmed Fahd Al Ahmed Al Sabah said in Kuwait just before departing for Beirut that "$30 will be the fair price" for oil. He said his country supports increasing OPEC's official production ceiling between 1.5 million and 2 million barrels a day.
Ahmed said he believes current high oil prices are only "temporary."
Kuwait's production is almost 2.4 million barrels daily, including a neutral zone the country shares with Saudi Arabia, Ahmed said, and the country is working toward 2.5 million barrels a day.
Saudi Arabia has already raised its output to 9.1 million barrels a day, well above its 7.638 million barrel per day OPEC quota.