OPEC "sure" to add more oil under output mechanism
Reuters, 12.30.02, 10:53 AM ET
LONDON, Dec 30 (Reuters) - OPEC is sure to raise oil output quotas by at least 500,000 barrels per day unless prices drop heavily in the next two weeks, a senior delegate from an OPEC nation said on Monday.
"The 500,000 barrels a day is sure. More than that is subject to ministerial consultations which are already underway," the delegate told Reuters.
An informal OPEC agreement stipulates that output be raised if prices for a basket of cartel crudes stay over $28 a barrel for 20 working days. The basket was priced at $31.06 on Friday, its ninth day over $28. Unless prices fall sharply it will have stayed over $28 for 20 working days by January 15.
Oil prices are running at two-year highs for fear of a war in Iraq and because of a four-week-old strike in OPEC member country Venezuela that has slashed its exports.
The OPEC delegate said oil ministers would not need to meet to raise output quotas by more than 500,000 bpd.
"If they want to do more than that they can agree the volume by phone," he said.
OPEC in December raised output quotas by 1.3 million barrels a day to 23 million bpd from January 1. Quota-busting means actual output has been running at some 24.5 million bpd.
Copyright 2002, Reuters News Service