Business | Oil & Gas
US hopes Opec won't cut output
US Energy Secretary Samuel Bodman said yesterday that he hopes Opec ministers will not decide to cut crude oil output levels further when they meet tomorrow.
- AP
- Published: 00:00 December 13, 2006
Tokyo: US Energy Secretary Samuel Bodman said yesterday that he hopes Opec ministers will not decide to cut crude oil output levels further when they meet tomorrow.
Bodman also said he wants to encourage China to rely more on the global energy market and less on acquisitions as a way to bolster its energy security.
He said he will encourage Beijing to use its strategic petroleum reserves as a buffer against physical supply disruptions, rather than a step to manupulate world prices.
The US energy secretary also discussed clean energy and energy-efficient technologies in his separate talks with Japanese Trade and Industry Minister Akira Amari and Foreign Minister Taro Aso.
Bodman is in Tokyo as part of his Asia trip to promote global energy security and clean energy technologies. He was to leave for South Korea later yesterday.
He also plans to attend the first US-China economic dialogue and the five-party energy ministerial meeting among China, Japan, South Korea and India on Saturday.
China started pouring commercial quantities of crude oil into strategic storage tanks in August, and its efforts have prompted worries over secrecy and the absence of clear policies on managing the oil assets held in store.
When US energy officials visited China in September, they called for greater transparency and caution against the reserves being used by authorities to massage oil prices.
Referring to the closely monitored Organisation of Petroleum Exporting Countries' meeting tomorrow in Nigeria, Bodman said he is "hopeful they [the ministers] are not going to further cut output."
The US has encouraged oil producers "to make sure the market is very well supplied."
Some Opec officials have been pressing for another reduction in crude oil output on top of the production cut of 1.2 million barrels a day approved in October, while others have indicated that with prices above $60 a barrel, the 11-member group was likely to refrain from another cut.
But state-owned Saudi Arabian Oil, or Aramco, said on Monday that it will cut its January crude supply to Asia by about 8 per cent, more than doubling the December cut.
Light sweet crude for January delivery was trading at $61.21 a barrel in Asian electronic trading yesterday on the New York Mercantile Exchange.
Policy: Kuwait not in favour of slashing supply
Kuwait does not favour an additional Opec output cut at the group's meeting this week if oil prices remain above $60 a barrel, its oil minister said yesterday.
"Sixty is acceptable. I imagine most Opec states are comfortable with these prices but we are concerned from any impact from stockpiles," Shaikh Ali Al Jarrah Al Sabah said.
Asked if he believes the global petroleum markets are oversupplied, the minister said: "Well, we think yes." He did not quantify the size of the surplus on the market.
Opec will meet in Abuja, Nigeria tomorrow to decide whether to cut beyond a 1.2 million barrel per day reduction agreed in October and which went into effect from November 1. Oil edged higher yesterday, supported by the possibility that Opec would agree a supply cut.
A narrow majority of Opec members have said they are leaning towards a cut of at least 500,000 barrels per day to counter rising fuel stocks in the US, where inventories are at their highest for this time of year since 1993.
- Reuters
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