The 11 members of the Organization of the Petroleum Exporting Countries (OPEC) will not raise their output beyond the current 23 million barrels of oil per day (bopd) ceiling, Saudi Oil Minister Ali Al-Naimi stated Sunday morning, January 12. Ahead of the cartel’s emergency meeting at the Vienna headquarters, Al-Naimi added that a production increase would flood the market.
The oil producers were scheduled to coordinate a substantial output boost in a bid to offset supply shortages caused by a pumping strike in OPEC’s third largest member Venezuela and augmented by fears of a looming strike on another OPEC member, Iraq. The ministers are looking to bring prices back down into OPEC’s target range of $22-28 per barrel, in support of world economic growth.
"There is not a shortage (of supply) in the international market, there is only a shortage from Venezuela, probably of two million barrels per day," Naimi said.
Early talk of an imminent increase, promoted by OPEC linchpin Saudi Arabia, had already brought about a drop in oil prices last week. On Tuesday, US crude pulled back to $32.72 from a two-year peak of $33.65 a barrel recorded in December-end.
The Saudi kingdom was pushing the cartel to raise output by nine percent, equivalent to an additional 1.5-2.0 million barrels per day (bpd) on top of OPEC’s current 23 million bpd. Other cartel members believe an increase in the range of four to seven percent—1.0-1.5 million bpd—is more realistic. The 42-year-old group produces over two thirds of world oil exports. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
