'Opec to lift output to cool oil prices'

2011-03-08 10:09

Singapore - Members of oil cartel Opec are joining Saudi Arabia in raising output to cool soaring prices and allay fears of a supply crunch in the West, the Financial Times newspaper reported on Tuesday.

Fed by fears of widening Middle East unrest that has slashed Libya's exports, US crude closed on Monday above $105, its highest since September 2008.

On Tuesday, following reports that Libyan leader Muammar Gaddafi was looking for a way to step down, it slid 75 cents to $104.68, while ICE Brent crude for April shed 68c to $114.36 a barrel in early morning trade, after having hit $119.79 on February 24, the highest price since 2008.

Kuwait, the United Arab Emirates and Nigeria are to ramp up their production by as much as 300 000 barrels per day in coming weeks, the paper said, quoting industry officials.

The production increase, expected by early April, will - together with an earlier rise by Saudi Arabia - almost make up the shortfall in supply from falling Libyan crude exports, it added.

Abu Dhabi National Oil Co (ADNOC) informed its Asian customers on March 1 it would supply full volumes of Lower Zakum, Umm Shaif and Upper Zakum crudes although there was still a 10% cut in its flagship Murban allocation.

Last month, Kuwait notified at least three Asian term buyers that it would supply crude for April-June at 5% below contracted volumes, the same as in January-March, industry sources familiar with the matter said.

Opec producers have said there was no shortage of crude supply.

Qatar's energy minister said on Monday Opec was assessing the oil market to determine whether it should hold an extraordinary meeting, but added there was no shortage of supply in the market.

Opec member Algeria is concerned about Libyan supply disruptions but sees no physical crude oil shortages globally, the country's oil minister said on Monday.