KUWAIT CITY, Dec 13, (Agencies): Kuwait’s Oil Minister Mohammad Al-Busairi said on Tuesday that OPEC will likely keep its official production quotas unchanged as the market is balanced and prices are stable. “The (oil) market is currently balanced and there is no shortage or excess in supplies which resulted in relatively stable prices that remained above $100 a barrel,” Busairi told the official KUNA news agency in Vienna. “This balance could probably lead OPEC not to change its current production ceiling,” said the minister ahead of an OPEC meeting Wednesday. He however said that the final decision depends on talks that would be held between OPEC ministers who would also discuss the Eurozone economic crisis, slow US growth, high inflation in China and Libya’s rising production.

Stable
Busairi said a sharp drop in supplies would send oil prices soaring, harming the interests of consumers and producers as well, adding that the interests of all parties is to keep crude price balanced and stable.
The Kuwaiti minister has said the emirate has boosted production to above 3.0 million barrels per day in October, way ahead of its official quota of 2.22 million bpd. Analysts widely expect OPEC, which supplies a third of the world’s crude, to maintain its official output quota of 24.84 million barrels per day — where it has stood for almost three years. The Middle East Economic Survey (MEES) said in its last edition that OPEC members excluding Iraq produced almost 28.0 million bpd in November, the highest level in three years.

Crude prices were mixed in Asia Tuesday on worries over Eurozone debt crisis with New York’s main contract, light sweet crude for delivery in January, was up nine cents to $97.86 a barrel in the afternoon.
Brent North Sea crude for January delivery shed four cents to $107.22.
Meanwhile, healthy production levels by OPEC will help balance oil markets next year as demand growth slows, the West’s energy watchdog and OPEC said on Tuesday, a day ahead of a policy-setting meeting by the producer group.
The International Energy Agency said the Organization of the Petroleum Exporting Countries had raised output to its highest level in more than three years, and the oil producer group said it was now pumping more than might be required next year.

Levels
“Our base case is seeing a relatively balanced market next year if OPEC continues to produce at the levels they have been producing at over the last three or four months,” said David Fyfe, head of the oil industry and markets division of the IEA.
OPEC meets on Wednesday in Vienna to agree on output from its members, which pump more than a third of the world’s oil, and is expected to aim for a production target of around 30 million barrels per day (bpd).

The IEA and OPEC clashed in June when the IEA predicted a steep rise in demand and called on OPEC to help replace lost Libyan output in order to prevent oil prices from spiking further and damaging the global economy.
OPEC rejected the pressure and failed to agree on new output targets, which led the IEA to release stocks and further anger OPEC.
Saudi Arabia unilaterally raised production and was pumping at the highest level for 30 years in November, while the IEA has meanwhile repeatedly cut estimates for the global demand in 2012 as Europe’s debt crisis has worsened.
“We think that the market for 2011 and 2012 now looks tight to balanced, and there is the prospect of it easing somewhat after that,” Fyfe said.

Output
The IEA said its average call on OPEC crude for the first half of 2012 should stand at 29.35 million bpd versus 30.68 million bpd produced in November, which was a rise of 620,000 bpd on the back of higher Libyan and Saudi output.
“Overall, the IEA sees a fairly rosy supply side, which should be able to keep pace with demand growth by and large in the coming years, with limited spare capacity and inventory buffers in operation,” said analysts from Barclays Capital.

Analysts from PMV brokerage said in a note that such a level of production by OPEC would not only mean comfortable supply but would also allow daily stocks to be replenished by 700,000 bpd.
OPEC gave a more modest but still very healthy estimate of its own November output, when Libya, Saudi Arabia, Angola, Nigeria and Iraq raised output to help pump 30.37 million bpd.
The output figure for last month far exceeded the 2009 and 2010 yearly averages, according to data compiled by OPEC based on secondary sources. Both OPEC and the IEA also trimmed oil demand growth forecasts for next year.
“Planned austerity measures, not only in the euro zone but also in other OECD economies; the slowdown in developing economies, particularly China and India; and the still weak economic situation in the United States are factors that warrant particular attention as downside risks,” OPEC said.

Forecast
OPEC revised down its forecast for 2012 demand growth by 100,000 bpd to 1.1 million bpd while the IEA, which has been cutting its 2012 oil demand growth forecast since July, said demand would grow next year by 1.26 million bpd, 40,000 bpd lower than its previous forecast. For the whole of 2012, the IEA expects global demand for OPEC oil to be at 30.2 million bpd, a cut of 300,000 bpd from the previous report.
Non-OPEC output is seen growing next year by around 1 million bpd, slightly lower than previously forecast but still better than during a disappointing 2011, when output fell sharply in the North Sea, Azerbaijan and other regions.
“Our preliminary medium-term update suggests a more comfortable market outlook than looked likely six months ago,” the IEA said.
On the bullish side, the IEA said oil prices could spike if tighter sanctions are applied against OPEC member Iran, and it questioned the efficacy of a possible embargo imposed only by the European Union.