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French Version

Oil prices fall ahead of OPEC meeting

Cartel ministers support maintaining current production

Oil prices fell on Monday after OPEC ministers gave strong support to keeping output near a 25-year high and Nigerian militants released four foreign oil workers, ending a 19-day hostage crisis.

U.S. light crude eased 31 cents to $67.45 a barrel after soaring $1.50 a barrel on Friday, while London Brent crude slipped 49 cents to $65.75.

With oil prices up more than $7 this year, most analysts agree the Organization of the Petroleum Exporting Countries (OPEC) has little choice but to keep output steady at its meeting in Vienna on Tuesday.

Saudi Oil Minister Ali al-Naimi said he saw no reason to lower OPEC's production ceiling of 28 million barrels per day for the whole year.

The cartel currently pumps more than 29 million barrels per day when Iraq's output, which is not included in the official quota system, is counted.

Nigeria, the United Arab Emirates, Kuwait, Algeria, Indonesia and Iraq likewise looked set to keep the status quo when OPEC convenes Tuesday.

OPEC president Edmond Daukoru, who is also Nigeria's oil minister, said: "Speaking for Nigeria, I did not see a compelling reason for a cut."

His U.A.E. counterpart Mohammad bin Dhaen al-Hamli also doubted any change.

"It's going to be probably more likely than not a rollover," Hamli said, referring to the production ceiling, as he arrived at one of a number of hotels in Vienna where ministers have been gathering since Saturday.

Asked whether there was a reason to trim OPEC's production ceiling this year, Naimi of Saudi Arabia, whose country is the world's largest crude producer, said on Sunday evening: "Absolutely not."

Qatari Energy Minister Abdullah bin Hamad al-Attiyah joined a growing chorus of voices Monday calling for OPEC to leave production levels unchanged, claiming current high crude prices prevented any lowering of the cartel's production level, which is currently set at 28 million barrels per day, the minister said as he arrived at a hotel in Vienna.

"I don't think so with this high price," said Attiyah, responding to a reporter's question about whether he saw a need to cut crude production.

But not everyone agrees.

Venezuelan Energy Minister Rafael Ramirez said ministers should be prepared to reduce the production limit as early as their next meeting in March.

"I don't propose to cut at this meeting, but maybe in the next meeting we have to cut," he said. Ramirez cited a target reduction of one million barrels per day in line with a call by Iran's OPEC representative Hossein Kazempour Ardebili on January 20.

Analysts note Iran's stance may be linked to a desire by Tehran to use its energy weapon against the West amid a nuclear standoff.

Iranian Oil Minister Kazem Vaziri-Hamaneh was tight-lipped about his country's view on oil production as he arrived in Vienna on Monday.

"We will look at the conditions of the market and we will decide collectively," Vaziri-Hamaneh told reporters.

Ahead of the meeting on Tuesday, ministers from Qatar and Libya are also due to arrive in the Austrian capital. Their counterparts from Nigeria, Saudi Arabia and Algeria are already assembled.

The Kuwaiti and Indonesian oil ministers, however, will not attend. The Iraqi oil minister's presence is also doubtful.

Beirut,02 06 2006
The Daily Star
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