Chakib Khelil opec may increase oil output in february

Chakib Khelil: OPEC May Increase Oil Output in February

12-17-2007

OPEC, producer of more than 40 percent of the world's crude oil, may increase output quotas when it meets Feb. 1 because stronger demand is expected during the winter season, Algerian Oil Minister Chakib Khelil said.

``The forecasts now point toward a cold winter, and the economy seems to be improving. That means stronger demand'' for oil, Khelil said today in an interview in Limassol, Cyprus. ``The chances that we could decide to increase output are greater than reducing output.''

The Algerian oil official will become President of the Organization of Petroleum Exporting Countries at the start of next year for a 12-month term. Venezuela's Oil Minister Rafael Ramirez said earlier this month that the oil exporters group may decide to reduce output when it meets in February to discuss output policy at its headquarters in Vienna.

Oil prices closed in New York on Dec. 14 at $91.27 a barrel, up more than 4 percent since OPEC decided to keep production quotas unchanged at its Dec. 5 meeting.

OPEC's production ceiling now stands at 29.673 million barrels a day for 12 of its members. War-torn Iraq is the only member without a quota.

``OPEC seems happy with $90-a-barrel prices, otherwise it would have decided at the last meeting to increase output,'' John Hall, from U.K.-based John Hall Associates energy consultants, said yesterday. ``The price level that we'll have by end January will definitely weigh on the decision it will make on Feb. 1.''

The International Energy Agency, an adviser to 27 nations, said on Dec. 14 that signs of rising OPEC supply have helped lower prices from a record near $100 a barrel in the past month, boosting prospects for winter-heating-fuel consumers.

Global demand in 2008 is forecast to rise 2.5 percent to 87.8 million barrels a day, the IEA said in a report. That's 110,000 barrels a day more than last month's estimate. Demand for 2007 was revised lower by 60,000 barrels a day.

Growth in supplies from Iraq and Angola have added about 400,000 barrels of oil supply a day between August and November, helping offset lower supplies from the United Arab Emirates because of oil-field maintenance in November.

Khelil is in Cyprus this week to attend a conference of European and Mediterranean energy ministers which starts tomorrow.