OPEC president gives assurances on supplies

OPEC will increase supply to meet demand in the event of a second Gulf war or any other unforseen circumstance, the cartel's …

OPEC will increase supply to meet demand in the event of a second Gulf war or any other unforseen circumstance, the cartel's president, Mr Abdullah bin Hamad al-Attiyah, says.

In the event of a US-led attack on Iraq, the cartel could convene a snap meeting, said Mr Attiyah, who is Qatar's energy and industry minister.

"OPEC always has a tradition, can meet any time to discuss the markets, but I hope not to see a war," he said.

"If there is a shortage of supply, OPEC will balance demand and supply," Mr Attiyah told reporters on the sidelines of an energy and environment conference in the Emirati capital.

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"We have learnt from history how to deal with these situations," he said, adding that the Organisation of Petroleum Exporting Countries (OPEC) had "learnt a lot of lessons" from the 199O Iraqi invasion of Kuwait and 1991 Gulf war.

Mr Attiyah said no OPEC meeting had been scheduled during the Abu Dhabi conference attended by at least 11 oil ministers.

"Only bilateral talks are taking place but not any OPEC meetings because not all the oil ministers are present.

"The next OPEC meeting is on March 11th and we will discuss all options taking into account the market situation. For sure we will take into account any surprise development in the market also."

However, OPEC could do little to bring down oil prices which are rising mainly on political events, Mr Attiyah explained.

"There is plenty of supply, no shortage of oil ... prices are high because of instability in the region and OPEC has no control over this. We don't know any magic to bring prices down.

"OPEC can manoeuvre prices between $22 and $28 [per barrel], the preferred price band which OPEC has been maintaining until the war threat began and prices shot up."

The OPEC president said the focus was on prices not quota-busting by members.

"Right now we are trying to get oil prices down and not talking about cheating. We are discussing only prices within OPEC," he said.

Saudi Oil Minister Mr Ali al-Nuaimi said the March meeting of OPEC will discuss international inventory levels which are currently low, especially in the United States.

"If Venezuela comes back to the market and extra supplies begin to the US, the inventories will build up quickly," he said.

"Producers will surely fill up any shortfall during an emergency, as we are doing now for Venezuela. There is enough trust built up between producers and consumers that we will balance the market," Mr Nuaimi said.

He renewed the kingdom's pledge to activate spare oil production capacity and make up for any loss in world petroleum supply if war breaks out. The world's top oil exporter "does not hope that a strike on Iraq happens but, if it does, it is committed to cover the needs of the market in line with its capacity," Mr Nuaimi said.

On Friday, New York's light sweet crude March-dated futures were priced $33.51. In London, the price of benchmark Brent North Sea crude oil for March delivery fell was $31.06 per barrel, despite OPEC's decision in mid-January to increase production by 1.5 million barrels per day from next month.

AFP