OPEC seeks to reassure jittery oil market

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Nigerian Oil Minister Edmund Daukoru said he considered it unlikely that the 2 million barrels a day would be needed, though he conceded that Rita’s potential impact was difficult to judge.

Mandil said the IEA may extend its release of emergency oil and fuel stocks if Rita hits already damaged U.S. Gulf Coast oil installations. He described the OPEC measures as “very limited” gestures.

Analysts warned that the storm had the potential to cause further problems for the oil industry.

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“We really can’t afford to lose more production,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

“It’s tough to blame (OPEC) for higher oil prices. I think they’re doing what they can,” said Jason Schenker, an economist with Charlotte, N.C.-based Wachovia Corp., the fourth-largest U.S. bank.

Although the Saudis had pressed for a higher quota, previous OPEC increases have done little to ease market fears over supply.

“We don’t prefer to increase the ceiling at the moment,” said Qatar’s oil minister, Abdullah bin Hamad Al Attiyah. “There’s now oil available for three months and if the world needs oil, it’s available.”

Daukoru dismissed a higher output ceiling as a meaningless “gimmick,” and insisted that the extra 2 million barrels a day was “a much more pragmatic approach.”

He said OPEC was worried about a possible glut of crude in the second quarter of 2006 after winter demand subsides. “That’s the period we have to watch,” he said.

Most ministers maintain that the market is well supplied with crude and the problem lies with refining products.

“I hope all governments will help us to build more refineries,” Sheik Ahmed said.

OPEC said it adopted a long-term strategy plan designed to deal with most market conditions through 2020, and that its next meeting would be held on Dec. 12 in Kuwait. Daukoru will take over as OPEC president on Jan. 1, the group said.

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