Gulf oil exporters are unlikely to cut production in response to the International Energy Agency (IEA) releasing emergency stocks because demand for their crude is strong, two Gulf Opec delegates said on Sunday. Oil exporters' group Opec failed in early June to agree an increase in output which Gulf Arab producers and big consumers represented by the IEA hoped would dampen prices and boost growth.
Although leading exporter Saudi Arabia pledged to deliver any oil needed after Opec talks collapsed on June 8, the IEA said last week it would release 60 million barrels from reserves to further bolster supplies over the next month.
But the move by mainly western IEA member nations to compensate for the loss of light Libyan crude because of ongoing unrest in the North African country is unlikely to dampen demand for heavier Gulf crudes.
"The Gulf countries supply around 80 percent of their oil to Asia and demand is growing there, so I don't see any sign for Gulf countries to cut their production," a Gulf Opec delegate said.
"Besides, the IEA stocks are all sweet crude and what the Gulf countries produce are mainly heavier grades, so I don't see why there should be drop in output." A second Opec delegate said crude producers in the Gulf were closely monitoring demand for oil in Asia and would adjust their output to meet it.
"If we get more orders we will produce more, that will determine production not the IEA stocks," said the delegate.
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