Kuwait Open New Oil Storage Center

Sabriya,Kuwait on Thursday opened a new reception center at Sabriya oil fields as part of efforts to encourage the Gulf states to increase oil production to four million barrels per day in 2020. Oil Minister Sheikh Ahmad Abdullah al-Sabah inaugurated the center’s third largest oil fields near Kuwait’s northern border with Iraq. The facility was built by South Korean SK Engineering and Construction Co.. at a cost of 626.7 million dollars, can handle 165 000 barrels of crude per day and 85 million cubic feet of gas.

“The center is one of the facilities that contribute to the strategic direction in 2020,” said Sami al-Rasheed, chairman of the Kuwait Oil Co.., The state-owned company responsible for production. Reception center to the physical separation of crude oil, natural gas, water and other impurities before pumping clean oil, either for export or for gas and oil refineries to power plants.

President SK Choi Kwang-Chul said the project was completed six months ahead of schedule and went online a month ago. Reception center is already scheduled to be completed in September. Original center, about 50 kilometers (30 miles) from the border with Iraq, have been damaged during the invasion of Kuwait in 1990 by Saddam Hussein’s forces. Sheikh Ahmad said the center and a number of other projects are part of a long-term strategy of OPEC member Kuwait to increase production capacity to four million barrels per day.

“Currently, we are able to produce three million barrels per day,” the minister told reporters after the opening ceremony, but declined to say whether this is sustainable for a long time. Kuwait, OPEC’s fourth largest exporter, said that occupy 10 percent of global crude reserves. It had been pumping about 2.2 million barrels per day. (AFP)

OPEC price hawks like Iran and Venezuela are happy with present prices near $80 a barrel

VIENNA With U.S. demand for oil lackluster, even traditional OPEC price hawks like Iran and Venezuela are happy with present prices near $80 a barrel as they head into Tuesday’s meeting of the 12-nation organization.These two countries traditionally are the greatest advocates of tight OPEC supply. But ahead of their meeting there is informal unanimity among OPEC oil ministers that – with the world’s economic recovery feeble at best and crude prices at preferred levels – it’s best not to rock the boat.

That means the ministers will likely agree to maintain OPEC’s formal production target, now at 26 million barrels a day – a benchmark set over one year ago.OPEC has left its members’ production quotas unchanged since December 2008, when it announced the last of a series of cuts aimed at bringing their output down by 4.2 million barrels per day. The cuts helped engineer a rebound in crude prices, which had collapsed to the low $30s from a mid-2008 high of almost $150 per barrel.

Since the oil ministers last met three months ago, prices mostly have hovered between $70 and $80 a barrel – a range that most OPEC nations have factored into their national budgets this year. That has kept even hardliners Iran and Venezuela on board with other OPEC members.”OPEC should not take any decision to change production,” Iranian oil minister Masoud Mirkazemi told reporters in Tehran on Monday, echoing comments voiced by Rafael Ramirez, his Venezuean counterpart.Still, there will be behind-the-scenes pressure on some members to produce less by honoring their allotted targets.

At close to 27 million barrels a day, OPEC now is producing a daily 600,000 barrels above its official target – a result of cheating by individual nations on their quotas. While OPEC does not reveal which nations are overproducing, the Paris-based International Energy Agency put overall quota compliance within OPEC at only 58 percent in January.World oil demand is expected to rise this year due to surging economic activity in Asian countries, especially China. The IEA, which advises oil-consuming countries, predicts that the world’s appetite for crude will average 86.6 million barrels a day this year, or 1.6 million barrels a day more than 2009’s 86.5 million barrels.Still, oil markets remain concerned about shaky demand in the U.S. Crude consumption there and in other top industrialized nations is expected to contract in 2010 for the fifth consecutive year.(AP)

OPEC ministers say must focus on compliance

OPEC

LUANDA, Angola Several OPEC ministers say the oil producing group has decided to hold its output targets unchanged and wants members to adhere more closely to their quotas.Oil ministers from Angola, Algeria, the United Arab Emirates and Libya all said Tuesday the group has decided to hold steady its production quotas.

The decision was widely expected as the 12-member Organization of the Petroleum Exporting Countries has voiced comfort with current oil prices and is wary of taking a step that could shock the market and undercut the ongoing fragile global economic recovery.

“Yes, we are talking about compliance. We are calling for member compliance,” said Shukri Ghanem, the head of Libya’s National Oil Corp. and that country’s de facto oil minister. Ghanem said there would be “no change” with quotas.

Oil prices fell below $75 a barrel Monday as the dollar strengthened

Oil prices

Oil prices fell below $75 a barrel Monday as the dollar strengthened and several OPEC ministers said they don’t expect their group to change production levels at a meeting later this month.By early afternoon in Europe, benchmark crude for January delivery was down 67 cents to $74.80 in electronic trading on the New York Mercantile Exchange. The contract lost 99 cents to settle at $75.47 on Friday.

Top oil officials from Libya, Kuwait, Algeria and Qatar said Saturday that the Organization of Petroleum Exporting Countries, which supplies about 35 percent of the world’s crude, will likely leave output levels unchanged at the group’s next policy meeting on Dec. 22.

Saudi Arabia’s oil minister, Ali Naimi, said Saturday that oil prices, which have bounced around the high $70s for about two months, were “perfect.”

“Crude oil prices have been in a downtrend since Oct. 21,” said a report from Sucden Research in London. “Given the high levels of crude inventories as well as views that OPEC will keep the output quotas unchanged … it looks likely that fundamentals do not support higher crude oil prices.”

Oil traders are also eyeing the U.S. dollar as some investors buy crude as a hedge against inflation and a weaker U.S. currency. When the greenback strengthens, however, oil becomes more expensive for investors holding other currencies, like the euro or the Japanese yen.

On Friday, crude fell to a seven-week low after the Labor Department said the unemployment rate fell to 10 percent in November from 10.2 percent a month earlier, sparking a rally in the dollar. On Monday, the euro was down to $1.4785 from $1.4851 on Friday, near its lowest point in about a month.

Analysts at U.S. energy consultancy Cameron Hanover said the dollar’s rise was taking away “the best source of buying for the oil complex” and putting some of the focus back on the fundamentals of supply and demand.

“This could be the beginning of the end for the so-called ‘carry’ trade … the whole process of borrowing money at negligible interest costs and then ‘investing’ it in anything with a market pulse,” Cameron Hanover said. “It completely disregards supply and demand and it has been the guiding force behind higher prices in commodities in 2009.”

Many experts say that the uncertainties of the economic recovery and the high inventories of crude and fuels in the United States do not justify oil prices near $80.

While Friday’s unemployment figures were encouraging, analysts warned that its was too soon to judge their impact on oil consumption.

Olivier Jakob of Switzerland’s Petromatrix said U.S. oil demand was still at least 2 million barrels a day lower than two years ago.

“The job losses are getting narrower but the number of unemployed remains astronomically high,” Jakob said. “A lot still needs to happen before the situation moves from less bad to much better on the employment front and really starts to have an impact on U.S. oil demand.”

In other Nymex trading in January contracts, heating oil fell 1.01 cents to $2.0167 and gasoline slipped 1.28 cents to $1.9622. Natural gas jumped 16.5 cents to $4.751 per 1,000 cubic feet.In London, Brent crude for January delivery lost 46 cents to $77.06 on the ICE Futures exchange.