Vienna, Austria — Despite current high prices for crude, markets already are well supplied and any decision by OPEC to pump more oil at this time would be destructive, the oil minister for the group's largest member said Tuesday.
Saudi Arabia's oil minister Ali Naimi blamed investors and speculators for driving prices up to 13-year highs and said that current prices "have absolutely nothing to do with supply and demand" for crude. He argued OPEC should proceed with its planned cut in output targets.
Naimi spoke to reporters as OPEC representatives arrived in Vienna to review the oil market and set output policy for the crucial second quarter of the year.
The Organization of Petroleum Exporting Countries meets today to decide whether to follow through on its agreement last month to cut its crude production target by 4 percent, or 1 million barrels a day, starting Thursday.
The meeting comes amid unexpectedly strong demand for oil in Asia and the United States. However, OPEC members fear that demand soon will slow due to a seasonal lull, and they had agreed to trim output to prevent a damaging fall in prices. Given the recent price increase, some delegates were saying that they might consider several options at the meeting, including postponing or even abandoning their planned cut.
Naimi's argument against any increase in output carries weight because Saudi Arabia is the biggest and most influential of OPEC's 11 members.
He said OPEC must reduce its output target as planned, arguing there was already a surplus of crude and that adding more oil now would further weaken the soft market expected in the second quarter.
Naimi found support from at least two OPEC counterparts.
"I feel we should go with the cut," said Libyan oil minister Fathi bin Shatwan. "The supply is enough in the market. Maybe there's a bit of oversupply even."
Algerian oil minister Chakib Khelil said OPEC's credibility would suffer if it reneged on its pledge to cut output.
However, Kuwaiti oil minister Ahmed Fahd al-Ahmed Al-Sabah said OPEC should postpone its production cut until it meets again in June, "unless there is an emergency," he told reporters before boarding a plane for Vienna.
OPEC supplies about a third of the world's oil. Its current output target is 24.5 million barrels per day.