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OPEC
will maintain crude oil production targets, says President
Organisation of Petroleum Exporting Countries (OPEC) will leave oil production targets unchanged when it meets next week in Vienna after prices recovered, the group's president said.
"We have been seeing slowly a much reduced variation of oil prices," Jose Maria Botelho de Vasconcelos, who is also Angola's oil minister, said in an interview in Luanda, Angola, yesterday.
"This is a sign that the world economy is recovering. Everything shows that they will keep output unchanged."
Botelho de Vasconcelos's views chimed with an official from a Persian Gulf member of the OPEC who said yesterday the group would probably hold quotas steady to avoid derailing the global economic recovery. The official declined to be identified by name because a final decision hasn't been made.
OPEC is holding its third meeting of the year on September 9 in Vienna. The group hasn't altered output targets since it agreed last year to reduce total production for its 11 members with quotas, excluding Iraq, by 4.2 million barrels a day to arrest plunging prices as the world fell into recession.
Oil prices reached a record $147.27 a barrel in July 2008 before plummeting to less than $40 in December. Crude has recovered this year to around $70 a barrel, a price ministers have said is fair for consumers and producers.
Members' compliance with its record output cut slipped for a fourth consecutive month in July as prices recovered, giving an implementation rate of 67 per cent, OPEC said in its most recent monthly report.
The 11 OPEC members with quotas pumped 26.055 million barrels a day in August, 1.21 million more than their collective target and 20,000 barrels a day up from the previous month, according to estimates in a Bloomberg survey published yesterday.
OPEC countries that are producing above their quotas, such as Iran, Angola, Ecuador and Venezuela, will be encouraged to comply with their agreed output limits, the Persian Gulf official said.
Oil ministers from Qatar, Kuwait and Iraq expressed support in recent days for leaving quotas unchanged, even as oil stocks remain high.
The focus should be on returning the global economy to growth rather than higher stock levels, the official said.
Crude oil rose yesterday for the first time in three days on expectations of an increase in fuel demand after an industry report showed U.S. stockpiles fell.
Crude oil for October delivery rose as much as 60 cents, or 0.9 per cent, to $68.65 a barrel in electronic trading on the New York Mercantile Exchange.
It was at $68.58 a barrel at 2:34 p.m. Singapore time. On Tuesday, the contract fell 2.7 per cent to $68.05, the lowest settlement since August 17.
The American Petroleum Institute said yesterday that crude supplies dropped 3.19 million barrels last week. A U.S. government report yesterday may have showed stockpiles declined.
Oil's gains were supported as Australia said economic growth unexpectedly accelerated in the second quarter, adding to expansion in France, Germany and Japan.
"The broader economy has shown signs it's turning around," said Toby Hassall, a research analyst at Commodity Warrants Australia Pty in Sydney.
Should the API figures be "any indication of the EIA numbers tonight, those numbers could be construed as supportive."
Prices on Tuesday climbed as much as $1.41 a barrel when reports showed that manufacturing in the U.S. and China, the two biggest energy using nations, expanded in August. The U.S. and China are responsible for more than 30 percent of global crude- oil demand.
Oil in New York has traded between $65 and $75 a barrel since July 31.
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