OPEC set to raise output despite price drop: president

by Omar Hasan

ATTENTION - ADDS quotes ///

KUWAIT CITY, April 11 (AFP) -

OPEC's president said on Monday he believed the cartel would go ahead with a proposed output increase of 500,000 barrels per day (bpd) next month despite a drop in oil prices.

"I still believe that the 500,000 (increase proposed by OPEC in Iran on March 16) will be in May because it will be (in) preparation for the third quarter," Sheikh Ahmed Fahd al-Sabah told reporters.

Asked what the cartel would do if prices continued to slide, Sheikh Ahmed, who is Kuwait's energy minister, said: "This (anticipated increase) depends on demand and not prices."

"We believe that demand will grow in the third quarter to 28.5 million bpd for the OPEC 10 (excluding Iraq). For that this increase is to meet demand in the market and is not related to prices," he said.

World oil prices slipped below 53 dollars a barrel on Monday amid easing worries over possible supply shortages, helped by Nigerian oil workers dropping a threat to strike, analysts said.

New York's main contract, light sweet crude for delivery in May, dropped 47 cents to 52.85 dollars a barrel in electronic deals.

In London, the price of Brent North Sea crude oil for delivery in May lost 83 cents to 52.06 dollars a barrel.

Oil prices have plunged after hitting record peaks a week earlier of 58.28 dollars a barrel in New York and 57.65 dollars in London, on fears of gasoline shortages ahead of the so-called "US summer driving season."

Sheikh Ahmed said that current production for the OPEC 10 is around 28 million bpd and the cartel will be required to pump some 28.5 million bpd in the third quarter and 30.3 million bpd in the fourth quarter if it is to meet demand.

Most of the increase will come from Saudi Arabia, he said.

The OPEC chief said the organization was prepared to pump more crude into the market if global demand increases further.

"If there will be more demand, to ensure (sufficient) supplies, OPEC will behave positively," he said.

OPEC ministers raised output by 500,000 bpd when they met in the Iranian city of Isfahan last month to 27.5 million barrels and authorized the cartel's chief to call for another equal hike if needed.

The Kuwaiti minister said the emirate is producing about 2.6 million bpd and its production capacity will increase to 2.78 million bpd at the end of April.

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