ARZEW (Algeria) — Opec does not have the oil production capacity to enable it to lift supply quotas at next week’s meeting in Iran, Algeria’s Energy Minister said yesterday.
“Opec does not have the production capacity to increase its quotas,” Chakib Khelil told reporters.
Oil prices have risen 25 per cent since the start of the year to near record highs on forecasts of tight global supply through this year. “I think that even a one million barrels per day increase would not reduce prices,” Khelil said. Opec last year raised supply to the highest level in 25 years, leaving little spare production capacity to cope with output disruptions.
“Demand in China and strong global economic growth are the origin of the rise in prices ... Speculators are profiting from this,” Khelil said. The group agreed to cut one million barrels per day of excess supply from January 1, but strong global demand allowed it to pump around 630,000 barrels per day above its official targets last month.