Saudi Arabia's oil minister said Saturday that current global oil prices are "perfect," as several key Arab OPEC members indicated the group was unlikely to change output levels when it meets later this month.
The Organization of the Petroleum Exporting Countries, which supplies roughly 35 percent of the world's crude, has held its quotas unchanged since last year's record 4.2 million barrels per day in cuts.
"The price is perfect," said Saudi Oil Minister Ali Naimi, whose country sits atop the world's largest proven oil reserves and is OPEC's most influential member.
Speaking on the sidelines of the annual meeting of the Organization of Arab Petroleum Exporting Countries, Naimi said the market is stable and "volatility is at a minimum."
Since last December, OPEC has focused on boosting compliance with output quotas of its 12 member states. The group's approach has helped oil prices rebound to almost $80 per barrel recently, after they collapsed last year as the world's worst recession in decades sapped demand for crude.
The benchmark crude oil contract for January delivery settled at $75.47 a barrel on Friday on the New York Mercantile Exchange, hitting a seven-week low on high global inventories and the strong dollar.
Ministers from several key Arab OPEC nations, however, indicated that they were satisfied with the current market situation and said it was unlikely the group would change quota levels at its Dec. 22 meeting in Luanda, Angola.
"No, no, no, I don't expect anything," said Shukri Ghanem, the head of Libya's National Oil Corp. who serves as the North African nation's de facto oil minister. "I think because ... of the market situation, because of the fluctuation of the market, we don't expect any change in the quota."
Ministers from Kuwait, Algeria and Qatar echoed those sentiments.
Kuwaiti oil minister Sheik Ahmed Al Abdullah Al Sabah said he believes there is a consensus among the Arab OPEC members that there will be no major changes.
Sheik Ahmed said, however, he was dissatisfied with current compliance with production targets by some OPEC countries, stressing that level needed to be above 65 percent but was now near 60 percent. He did not say who was overproducing.
The comments came against a backdrop of broader concerns by oil producers that an upcoming international climate change summit in Copenhagen — aimed at brokering an agreement on emissions reductions — could be used to undermine interests of oil producers.
Oil producers worry they are being scapegoated, and that the net result of any agreement will come at their expense amid a push to reduce dependence on crude, their chief export.
Saudi Arabia has said it would like to see some sort of compensation paid to producers, a sentiment that appears to have found support among some other OPEC members.
"They're already proposing how to increase tax on ... gasoline" and other petroleum products," said Qatari Oil Minister Abdullah bin Hamad al-Attiyah.
OPEC has said it wants to see crude in the $70-$80 per barrel range, a level which Saudi Arabia's king had first indicated was high enough to encourage producers to continue their work while not shocking the world's economy.
The producer bloc's efforts to bring global crude stocks down have been somewhat undermined, however, by eroding compliance by some of its members — a slippage that has become more pronounced as oil prices climbed. The overwhelming majority of OPEC nations rely on oil revenues for as much as 90 percent of their foreign revenues, and higher prices have encouraged the more cash-strapped member-states to boost their output.
Libya's Ghanem said that he believed the group will "have to call for more compliance by OPEC members because there is some ... excess production."
An OPEC report last month said the group, excluding Iraq which is not bound by quotas, produced roughly 26.5 million barrels per day in October. That is about 1.5 million barrels per day above their production target.
Naimi voiced satisfaction with the current situation, however, saying that "inventories are coming down."