VIENNA, June 8, 2011 (AFP) - OPEC squared up on Wednesday for a critical decision on whether to raise oil output for the first time for almost four years to underpin the global economy.
One central factor is a choke on production in Libya owing to unrest.
OPEC, which accounts for an estimated 40 percent of global oil supplies, will announce its decision after a regular meeting of its 12 member nations in Vienna, where the cartel is based.
|AFP - Kuwait´s Minister of Oil Mohammad Al-Busairi arrives at the headquarters of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna on June 7, 2011|
Consumer nations are appealing for OPEC to pump more crude amid concerns that high oil prices -- with London Brent oil currently trading above $116 per barrel -- could further damage the faltering global economic recovery.
The Organization of Petroleum Exporting Countries (OPEC) can pump more oil "if the market needs" it, Angolan Oil Minister Jose Botelho de Vasconcelos told reporters in Vienna on the eve of the gathering.
Brent crude has soared by about 21 percent in value since the start of this year as spreading unrest in the oil-rich Middle East and North Africa region cut supplies.
Unrest in OPEC member Libya, which erupted in February, has removed about 1.3 million barrels per day from the global oil market.
The cartel has held its production target at 24.84 million barrels per day (mbpd) since January 2009, but is pumping above that limit to compensate for the loss of supplies from Libya.
Oil prices now appear set to rise even further in the coming months owing to seasonal energy demand, which would spark a major tightening in the market.
Saudi Arabian oil officials, backed by Gulf producers such as Kuwait and the UAE, are pressing for an increase of up to 1.5 million barrels a day.
Analysts argue that an increase of this size would be roughly equivalent to the cartel's current excess output, leaving overall production unchanged.
However, hawks Ecuador, Venezuela, Iraq and Iran -- which holds the rotating OPEC presidency -- have all called for quotas to be maintained to preserve their precious oil revenues.
At the same time, deep divisions have emerged between OPEC member states over Libya, which is nevertheless due to send a delegation to Wednesday's meet.
Qatar recognises Libya's opposition National Transitional Council, pledging to help the rebels export oil, while the UAE took part in NATO operations against Libyan leader Colonel Moamer Kadhafi. Kuwait has meanwhile promised large financial support for the rebels.
The International Energy Agency, the energy monitoring and strategy arm of the developed economies, has warned that high oil prices threaten global growth and spoken of a "clear, urgent need for additional supplies".
In a fresh development on Tuesday, the World Bank slashed its global economic growth forecasts -- and blamed soaring food and fuel prices.
The Washington-based development lender projected said global growth will only be 3.2 percent in 2011, a tenth point lower than its January estimate and sharply off the 3.8 percent pace of 2010.