OPEC Unlikely to Change Quotas, Libyan Minister Says

By Ayesha Daya and Ladane Nasseri

Aug. 31 (Bloomberg) -- OPEC, supplier of about 40 percent of the world's oil, probably will leave production quotas unchanged when it meets Sept. 9 even if crude markets look ``oversupplied,'' Libya's oil minister said.

``If things stay as they are, with oil at $115, $116 a barrel, I don't think much will be done in the meeting,'' Shokri Ghanem said in a telephone interview today from Tripoli. ``If the market continues as it is, well-supplied, if not oversupplied, no action is needed.''

Crude oil, down 22 percent since it touched a record July 11, closed Friday at $115.46 a barrel on the New York Mercantile Exchange. Twelve nations in the 13-member Organization of Petroleum Exporting Countries have maintained an official output limit of 29.67 million barrels a day this year, and the group's meeting next month will review production levels before an increase in demand for winter heating fuel.

OPEC production surpassed its official quota as the group tried to temper a surge in prices, which still are up 57 percent in the past year and reached a peak of $147.27 a barrel on July 11. The 13 OPEC members produced 30.37 million barrels a day of oil in July, according to Bloomberg data, as the group's largest producer and de facto leader Saudi Arabia unilaterally raised output in June and July by 500,000 barrels a day.

Winter Demand

Oil prices may rise later this year because of the expected increase in demand during the Northern Hemisphere winter, Ghanem said. ``I don't think the economy will slow,'' he said. ``I think prices will go up this year as demand rises.''

The ``minimum'' suitable level for crude oil prices is $100 a barrel and prices will rise as demand increases during the winter months, Iran's Oil Minister Gholamhossein Nozari said today, according to the ministry's official news agency.

``Iran hopes that OPEC will defend the balance of the market,'' Mohammad Ali Khatibi, Iran's OPEC governor, told Bloomberg News in an interview in Tehran today. ``When oil prices are attractive, investment takes place, and if prices are on a decreasing course, investors will be hesitant.''

OPEC should leave production unchanged as there is plenty of oil in the market, Ecuador's Oil Minister Galo Chiriboga said Aug. 29. Venezuelan Oil and Energy Minister Rafael Ramirez said the day before that the group shouldn't increase production and is studying whether it will recommend an output cut.

To contact the reporter on this story: Ayesha Daya in Dubai adaya1@bloomberg.net