(Updates with officials’ comments in second, third paragraphs.)
Oct. 2 (Bloomberg) -- Global oil demand is balanced with supply, said officials from OPEC’s two largest producers Saudi Arabia and Iran, as the group evaluates the outlook for economic growth and the return of Libyan output.
Markets are “stable and in balance,” Saudi Arabian Oil Minister Ali Al-Naimi was cited by Asharq Al-Awsat newspaper as saying yesterday in Riyadh. “The kingdom is ready to play a positive role to ensure the stability of the market.”
Iran sees no need for the Organization of Petroleum Exporting Countries to raise oil production, given the lack of clarity about global demand, Mohammad Ali Khatibi, the country’s representative to the group, told the state-run Mehr news agency.
Oil capped the largest quarterly drop last week since the 2008 financial crisis, tumbling to a one-year low as signs of slowing growth in China, the U.S. and Germany heightened concern demand will weaken. The International Energy Agency cut global oil demand forecasts for this year and next in their latest market reports released last month.
OPEC is set to meet in December in Vienna to evaluate supply and demand and consider current production levels.
OPEC’s oil output in September rose to the highest since November 2008, as a Saudi cut was outpaced by Iraqi and Libyan gains, a Bloomberg News survey showed. Production increased by 75,000 barrels, or 0.3 percent, to average 30.055 million barrels a day, according to the survey of oil companies, producers and analysts. Excluding Iraq, the 11 members’ daily output dropped 15,000 barrels to 27.3 million, 2.44 million barrels above their target.
Saudi Arabia, OPEC’s biggest producer, reduced output by 90,000 barrels, or 0.8 percent, to 9.76 million barrels a day. August output of 9.85 million barrels a day was at the highest level since at least January 1989 when Bloomberg monthly data began. The kingdom exceeded its quota by 1.71 million barrels.
The Kingdom, the world’s largest crude exporter, and Persian Gulf neighbors Kuwait and the United Arab Emirates increased output beyond their OPEC limits to help make up for a shortfall in Libyan exports caused by the conflict in the North African country.
Those countries backed a plan to raise OPEC’s output quotas during the group’s last meeting in June, a move that was opposed by countries such as Iran.
Middle East producers may target higher minimum oil prices to pay for increased social spending, Citigroup Inc. said in a briefing. Producers need prices at about $86 a barrel on average to meet budget requirements, Deutsche Bank AG said.
Saudi state revenue, made up mainly of income from oil sales, will cover increases in government spending and be higher than the 2011 budget forecast, newspaper al-Eqtisadiah reported today, citing Finance Minister Ibrahim al-Assaf. The Saudi economy has “healthy growth” and oil prices are in “great fluctuation,” the newspaper reported al-Assaf as saying.
Crude for November delivery fell $2.94 to $79.20 a barrel on the New York Mercantile Exchange, the lowest settlement since Sept. 29, 2010. Brent oil for November settlement fell $1.19, or 1.1 percent, to settle at $102.76 a barrel on the ICE Futures Europe exchange in London. Prices fell 8.6 percent last quarter, paring their rise so far this year to 8.5 percent.
--With assistance from Ladane Nasseri and Maher Chmaytelli in Dubai. Editors: Mike Harrison, Torrey Clark
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