OPEC 'may boost output later this year' | OPEC may need to boost crude oil output by up to 1 million barrels per day later in 2007, perhaps in December, should demand prove robust and inventories fall, an OPEC source said.
The source said the main producers in the Organization of the Petroleum Exporting Countries (OPEC) believe there is no need to pump extra crude now, indicating the group will leave policy unchanged at its meeting on Sept. 11.
"If things stay as they are, I believe we need to increase by 500,000 barrels per day to 1 million bpd," said the source, who declined to be identified by name.
"Perhaps in December, depending on the stocks," the source said when asked when such a move may be needed. OPEC holds another meeting on Dec. 5.
The comments follow remarks from OPEC members Qatar and Venezuela suggesting it will probably hold supply steady next week. Only Indonesia, OPEC's second smallest producer, has said it may propose an increase.
Many in OPEC, which sets supply limits for 10 of its 12 member-countries, think boosting output at next week's meeting would just add to inventories that are already at a comfortable level, said the source.
"Most of the delegations are still maintaining that we still have high stocks and if we increased production now, this increase will probably go into the stocks."
Crude in New York is trading at around $74 a barrel, down from a record high of $78.77 hit on Aug. 1. Concern that worsening credit conditions and a US slowdown could take a wider economic toll have pressured prices.
While demand usually rises in the fourth quarter as consumers in the northern hemisphere use more heating fuel, the outlook has become uncertain, said the source.
OPEC, source of more than a third of the world's oil, agreed last year to lower production by 1.2 million bpd from Nov. 1 and by a further 500,000 bpd from Feb. 1 to prop up prices.
Some members have been pumping extra barrels to capture higher prices, although the larger producers are keeping a cap on supply, said the source.
"They are leaking some crude onto the market. But the main OPEC countries say there are no takers."
The source pegged OPEC's level of compliance with the accord at about 52 percent, down from above 60 percent earlier in 2007.
Oil price rises to $76 Oil prices rose to $76 a barrel, buoyed by expectations that US crude and gasoline inventories fell last week.
US crude rose 33 cents to $76.06 a barrel by 0144 GMT, after a high of $76.25 and gains of 65 cents on Wednesday. London Brent crude was up 21 cents at $74.55 a barrel.
US crude oil stocks are expected to have slipped 500,000 barrels in the week to August 31, after Hurricane Dean disrupted Mexican oil exports, while gasoline stocks were seen falling 1.3 million barrels in US government data due later today, according to a poll of analysts.
'The expectations are for quite a fall and with prices going where they are going, you've really got to get that now, or there will be a disappointment,' said Tobin Gorey, a commodities strategist at Australia's Commonwealth Bank.
The supply worries were compounded by expectations that oil cartel OPEC will maintain its output curb when it meets on September 11 in Vienna.
Most OPEC members have said that the recent rally in oil prices is due to a shortage of refined products and an output boost would only add to what they call comfortable stock levels.
Traders are also keeping an eye on the storm season in the Gulf of Mexico, with the Colorado State University forecasting that the rest of the 2007 Atlantic hurricane season would be busy.
Prices this week have climbed towards a record high of $78.77 hit on Aug. 1, as Hurricane Felix threatened the Gulf of Mexico, but Hurricane Felix has since been downgraded to a tropical depression after hitting Honduras, and is not seen affecting Mexico's major oilfields.
