ABU DHABI (Thomson Financial) - Oil markets still widely expect OPEC to raise output at a meeting next week, if recent trading patterns and opinion polls are anything to go by, but the cartel's most influential member, Saudi Arabia, has failed to hint either way.
When reporters asked Saudi Arabian Oil Minister Ali al-Naimi if OPEC needs to boost oil output, he said: 'We don't know,' and insisted players must wait until the cartel has examined data at its Dec 5 meeting in Abu Dhabi, United Arab Emirates.
He also said demand going forward is most likely to rise as temperatures in the Northern Hemisphere drop, but he said supplies were currently in a 'comfortable range'.
New York's WTI oil benchmark hit a record price of 99.29 usd a barrel on Nov 21 but has lost 11 pct of its value since then and hit 88.45 usd in intraday trading Friday a one-month low. Expectations OPEC will decide to raise oil output helped soothe prices.
Fifteen out of 23 analysts polled this week by Thomson Financial News said the cartel is likely to agree to a production-hike.
Dennis Gartman, editor of daily trading note The Gartman Letter, who tipped the cartel to raise supply in the poll, said today by telephone that Naimi's latest comments do not change anything.
He said Naimi's remarks were non-committal and 'he's not said anything that's concerned me.'
In the days ahead of the group's last meeting on Sept 11, markets had expected OPEC not to raise production, but the cartel surprised participants and agreed to boost output by 500,000 bpd starting Nov 1. The group's worries about high oil prices and their potentially damaging effect on the global economy prompted its decision.
'I think everybody expects them to increase production,' said Gartman, who added that the extra oil OPEC said it would add to the market from Nov 1 was trickling in successfully, according to tanker tracking data.
The analysts who believe OPEC will decide to raise output said the increase could be anything from 500,000 bpd to a maximum of 1 mln bpd.
'(OPEC members) seem to be somewhat alarmed by the price drop and could be backpedaling to halt the decline,' said MF Global analyst Edward Meir, in regards to Naimi's latest statements.
Meir said there was a 25 pct chance the cartel will not raise production, and a 25 pct chance they will add just 250,000 bpd to the market now and 250,000 bpd later. But, he said there was a 50 pct chance of a decision supporting an output hike of 500,000 bpd.
Elsewhere, Qatari Oil Minister Abdullah al-Attiyah seems to be less inclined to support a large increase. When asked by Agence France-Presse if an output increase was on the meeting's agenda, al-Attiyah said: 'No.' He was also quoted as saying the cartel should not flood the market with oil.
Earlier this week, Iraq's Oil Minister Hussain Al-Shahristani, said OPEC may increase production by up to 500,000 bpd. anealla.safdar@thomson.com as/jag COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.