VIENNA (Thomson Financial) - The oil market awaited comments from top OPEC member Saudi Arabia to see if the cartel will agree to raise production at its meeting Tuesday as other countries today dashed hopes of such a scenario.
Comments from Saudi Arabia carry the most weight as the country is OPEC's biggest producer.
Ministers from Kuwait, Qatar and the United Arab Emirates today suggested they are not particularly in favour of increasing supply quotas at a time of economic uncertainty and amid a swathe of refinery problems.
As he arrived in Vienna Sunday, Kuwaits Mohammad al Olaim said: We are seeing the increase of the prices (but) we think its not related to demand and supply only. It could be related to geopolitics and refinery capacity in the US.
He added OPEC officials were closely monitoring nervous financial markets currently engulfed by fears of a global credit crunch. Most officials fear risky commodities like oil would be abandoned if a serious crisis was on the way.
Markets have for some time now been expecting that OPEC would choose against raising production quotas at Tuesday's meeting, but if Saudi Arabia hints otherwise, participants might revisit their initial expectations.
Also likely to have some impact on the cartel's decision is the dollar's value, said Qatar's oil minister Abdullah al-Attiyah.
The weak dollar is a big caution to us, he said. We are losing value of the dollar. I prefer the (2002-2004 oil price) in the value of the money, he said.
OPEC pumps more than a third of global output.
Earlier today, OPEC president and UAEs oil minister Mohamed al Hamli failed to reiterate his view that the current oil market is well supplied as he arrived in Vienna.
Having reportedly told the press before flying to Vienna the oil market is well balanced and there is no shortage of supply, on his arrival here, al Hamli left the market guessing as to what the cartel will decide.
'We are going to have a meeting on the 11th,' he said, giving no further details. anealla@hotmail.com ma COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.