Gulf Arab Opec members led by Saudi Arabia will push for an increase in supplies at a meeting of the oil cartel this week in an effort to support flagging world economic growth by bringing crude prices back below $100 a barrel. Data indicating that economic recovery may be stalling in the West is worrying Opec's core Gulf members Saudi Arabia, Kuwait and the United Arab Emirates.
Saudi and its fellow Gulf producers will argue that oil prices are undermining the economic growth that fuels demand for Opec crude and that more supply is needed to balance demand in the second half of the year. But Riyadh is not prepared to force-feed crude on to the market to push prices aggressively lower. "We need to increase by at least one million barrels a day," a Gulf Opec delegate told Reuters in Vienna on Sunday. "We're not happy with current prices."
"We want to meet growing demand in the second half of the year without flooding the market," said a delegate from another Gulf country. Global benchmark Brent crude was valued just below $116 a barrel on Friday having risen from $90 a barrel when Opec last met in December and decided to do nothing.
Saudi Oil Minister Ali al-Naimi, the first minister to arrive in Vienna for Wednesday's meeting of the Organisation of the Petroleum Exporting Countries, had no comment for waiting reporters. But his presence in the Austrian capital so early, along with delegates from fellow Gulf Arab nations, will permit an early exchange of views on Monday among those countries who are normally most doveish on prices.
They may face opposition from Opec's leading price hawks, Iran and Venezuela, who argue high prices are justified and that, in any case, Opec is powerless to prevent speculators controlling price direction. Iran's cause won't be helped by the fact that it has no oil minister and has yet to decide who will represent Opec's second biggest producer at the meeting.
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