Gulf states may pump more oil

ABU DHABI - Two of Opec's leading Gulf producers say the cartel may agree to keep pumping above formal oil output quotas to cool overheated markets.

The United Arab Emirates yesterday joined Kuwait in suggesting that the producer group might take such a decision as American oil prices again threaten to breach US$55 ($75.49) a barrel.

"The decision may be to maintain current production levels with the aim of calming the market," UAE Oil Minister Mohamed al-Hamli said ahead of Thursday's Opec meeting in Isfahan, Iran.

Hamli did not specify how much the Organisation of the Petroleum Exporting Countries is now producing, but a Reuters survey showed 10 members excluding Iraq pumping 600,000 barrels per day above an official 27 million barrels ceiling in February.

His Kuwaiti counterpart, Sheikh Ahmad al-Fahd al-Sabah, also Opec president, acknowledged at the weekend that sky-high oil prices had tempted some members to exceed their quotas.

"I think that now everybody is overproducing," he said. "Current prices make it lucrative for everybody to hike production without the need for an [official] decision. "

Neither minister saw signs of tightening oil supplies and Hamli suggested stockpiles could even build by 2 million barrels per day during the second quarter.

- REUTERS