No reason for Opec output hike - Iran

Tehran, London: A senior Iranian oil official said yesterday there was enough supply of crude in the market, despite calls by consumers seeking to boost reserves, and saw no reason for Opec to hike output, an Oil Ministry website said.

Oil prices surged to a record high above $100 a barrel last week. Iranian officials have said factors such as speculation are behind the price rise, not a supply shortage.

"Any decision to boost output in the next Opec meeting would not have any justification," Mohammad Ali Khatibi, deputy director of international affairs at the National Iranian Oil Company, said ahead of the March 5 Opec meeting.

Iranian Oil Minister Ghol-amhossein Nozari has said Iran, the fourth biggest crude producer, will back a cut in production by the Organisation of Petroleum Exporting Countries when it meets in Vienna.

"There are indications it is likely Opec would lower the organisation's output in its next gathering," Khatibi said.

"It is known that the current supply of crude oil is sufficient to cover consumption but the consuming countries are calling for increased supply to fill their stocks," Khatibi was quoted by the ministry's news website Shana as saying.

He said demand for gasoline, not crude, would start playing a bigger role in determining prices as the northern hemisphere cold season ends. A shortage of refinery capacity has been blamed in part for sky-high oil prices in the past.

"With the conclusion of the cold season, the market gets ready for the driving season," Khatibi said.

Meanwhile, Opec President Chakib Khelil said he expects oil demand to decrease in the second quarter and that the group may agree to cut production at its next meeting.

"We don't expect to put more oil in the market," Khelil told reporters in Algiers yesterday. Inventories are "very high and international demand is expected to decrease in the second quarter. Opec is going either to keep production or reduce it."

Opec members are concerned that inventories and prices will fall during the second quarter, when consumption usually declines amid waning demand.

Survey: February output falls

Opec oil supply is set to fall by 200,000 barrels per day in February due to lower output from the group's top two producers, Saudi Arabia and Iran, an industry consultant said on Monday.

Opec's 13 members are expected to pump 32.4 million bpd of crude in February, down from a revised 32.6 million bpd in January, said Conrad Gerber of Geneva-based Petrologistics.

The drop in supply suggests some members are trimming output to prepare for seasonally lower demand in the spring, even though oil is trading within sight of a record high of $101.32 a barrel hit last week.

Saudi Arabia is expected to pump 9.1 million bpd, down from 9.15 million bpd in January, while Iran's supply is likely to drop by about 150,000 bpd to 4.05 million bpd, Gerber said.

Despite February's decline, production from the 12 Opec members bound by agreements to set production policy, all except Iraq, remains higher than their target of 29.67 million bpd.

- Reuters