Kuwait boosts oil output to 2.9 million bpd

KUWAIT CITY: Kuwait's Oil Minister Mohammad al-Baseeri said on Monday the OPEC member has increased its oil production to 2.9 million barrels per day to compensate for a shortage in the market.

"We have been producing 2.9 million bpd at least for the past 10 days. We are heading towards 3.0 million bpd," the minister told a news conference. Kuwait's OPEC production quota is slightly above 2.2 million bpd.

Baseeri hoped production over the rest of September will not be fewer than 2.9 million bpd, adding that Kuwait, Saudi Arabia and other Gulf states have increased production to meet rising demand and stabilise prices.

"If Kuwait and Saudi Arabia had not raised their production in the past four to five months, oil prices would have been at a totally different (higher) level," he said.

"We tried to contribute to the stability of oil prices by raising production but without flooding the market," Baseeri said.

The minister said the markets are "very thirsty for oil," and based on OPEC figures, "the world will need between 1.5 million bpd and 2.0 million bpd of extra oil in the third and fourth quarters."

The Organisation of Petroleum Exporting Countries, however, on Monday lowered its world oil demand forecast for 2011 and 2012, citing the poor economic climate.

Oil demand for this year was set at 87.99 million barrels per day, down from a previous forecast of 88.14 million bpd, OPEC said in its latest monthly report.

The 12-member cartel blamed the revision on a weaker-than-expected demand in the United States and ongoing effects of the financial crisis, which was dragging down demand in China and India.

For 2012, demand was expected to average 89.26 million bpd, down from the August estimate of 89.44 million bpd but still up 1.27 million bpd from 2010, OPEC added.

Baseeri, however, said some OPEC and non-OPEC states were producing at their "full capacity," and that production of some non-OPEC countries has declined and "there is a need to compensate for this shortage."

The new OPEC forecast has dented oil prices.

New York's main contract, light sweet crude for delivery in October slid $1.22 to $86.02 a barrel.

Brent North Sea crude for October delivery shed $1.32 to $111.45 approaching midday trade in London.

Copyright AFP (Agence France-Presse), 2011