OPEC president dismisses need for oil output cut

OPEC president and Kuwait’s energy minister said on Saturday he saw no need now for telephone consultations between members of the cartel over a possible oil output cut ahead of its next meeting in March.

“Until now, I don’t think there’s any need for any consultations,” Sheikh Ahmad al-Fahd al-Sabah said.

Asked what would prompt OPEC to lower output ahead of the March meeting, Sheikh Ahmad replied: “The prices. If we see the prices falling too much.”

He also said a big build-up in petroleum stocks in industrialised nations could prompt him to call for a teleconference of the oil ministers of the Organisation of Petroleum Exporting Countries.

“If you see prices go in a dramatic way down, at least we will communicate with each other. Or if the stocks will go to almost 60 (days of forward demand cover),” he said.

He was referring to commercial stocks in OECD industrialised nations which are now seen at about 52 days of cover.

Asked to provide an example on when he could initiate telephone calls with other OPEC ministers, he said:

“When we go to the record (high) of 2004, when it went over $50 for US crude or Brent, then this is something we have to communicate with each other, because this is a new record.

“And if it will lose 30% or 40% of the price now, I think also this is a signal to make us very carefully contact each other because we speak about the second quarter.

“Our worry is not now; our worry is the second quarter.”

OPEC oil ministers agreed at their January 30 meeting in Vienna to keep output limits on hold, despite lingering fears that prices could tumble if excess supplies swell after the northern winter. The cartel meets next in Isfahan, Iran, on March 16 to discuss policy.