Iran: 'There is no need to increase OPEC production'
A rickshaw driver carries empty oil barrels on a HoChiMinh city street.
BOB MOON: We nominate this for the quote of the day -- not because it's terribly memorable but because it sets the stage for this week's much-watched meeting of the Organization of Petroleum Exporting Countries. Iran's oil minister says flatly, "There is no need to increase OPEC production." But that's not the last word on this matter.
Joining now is oil analyst Jim Ritterbusch. He heads Ritterbusch and Associates. Welcome, sir.
JIM RITTERBUSCH: Thank you Bob. It's nice to be here.
MOON: So, what do you expect to see coming out of this OPEC meeting as far as increased production goes?
RITTERBUSCH: I think we will see an increase in production, difficult to say how much. My own guess would be maybe around one million barrels per day that would offset the significant amount of lost Libyan supply.
MOON: Well, we've heard that Iran would like no increase in production. there's been a lot of talk about tensions between Iran and Saudi Arabia. How does that play into the production question?
RITTERBUSCH: Well, this is true, but the different between these two countries is the fact that Saudi Arabia has a large amount of unused productive capacity. Iran doesn't. So the Saudi's will likely guide this meeting and their lead will likely determine what production decision is forthcoming.
MOON: Are these OPEC meetings usually this contentious?
RITTERBUSCH: This will be a tougher one than what we've seen in few years, given a lot of politically cross currents, related to the lost Libya supply and the political divisions that are going to be represented at the table. The cartel also is faced with elevated oil prices and they're going to be treading a very fine line.
MOON: What would you see happening if there is no production increase?
RITTERBUSCH: We would probably see prices ramp up maybe back up to around $102, $103.
MOON: It's not the outcome we want. Jim Ritterbusch, thank you for your insights.
RITTERBUSCH: Thank you Bob. Have a nice day.