month highs, Saudi Oil Minister Ali-Naimi suggested Wednesday that OPEC will opt to keep production steady at its upcoming meeting. Even before he spoke, the recent jump in oil prices was working against OPEC members advocating for even costlier crude. But Al-Naimi's comment reinforced expectations that OPEC oil ministers would decide to continue pumping oil at present levels. “There is no need to cut production,” Al-Naimi told reporters, adding that the group should “stay the course.” He said that oil prices would likely reach around $75 a barrel by the end of the year on the back of growing demand in Asia. Benchmark crude for July delivery was up 67 cents to $63.12 a barrel by midday in Europe Wednesday in electronic trading on the New York Mercantile Exchange. Earlier in the session, the contract reached a peak of $63.45, its highest level since mid-November. The Kingdom has said it can live with oil at $50 a barrel, while supporting the general view of the Organization of the Petroleum Exporting Countries that prices of $75 to $80 are needed over the longer term. Price hawks Venezuela and Iran, the No. 2 OPEC producer, have been the most vociferous in support of those levels ahead of the meeting. The steep slide of crude from its 2008 peaks of $147 a barrel – and resulting Iranian economic hardship – is believed to be hurting President Mahmoud Ahmadinejad's re-election chances. Oil Minister Gholam Hossein Nozari said in March that his country was diverting funds from other sectors of its national budget to support its oil industry, its main revenue source. Staking out Iran's position ahead of Thursday's meeting, Ahmadinejad recently said $80 to $90 a barrel was “a suitable price for oil.” And Rafael Ramirez of Iranian oil ally Venezuela said his country favored oil prices at $70 a barrel – still about $10 above present levels. Still, a strong recovery in prices has given support to calls for keeping production levels unchanged. A barrel of crude now fetches more than $60 compared to levels near $30 just four months ago. And that spike has come despite continued anemic worldwide demand and gloomy future forecasts – Al-Naimi on Wednesday suggested greater demand later this year would come only from Asia, with the US and Europe continuing to lag. OPEC's May estimate in fact predicts that demand for its crude will decline by over 2 million barrels a day this year. Instead of being powered by demand, oil prices have risen on the back of international stock markets.
