Opec agrees to increase output to steady prices
business-times.asia1.com.sg January 13, 2003
Saudi Arabia says members are pumping more oil to replace lost Venezuelan output
(VIENNA) Members of the Organisation of Petroleum Exporting Countries (Opec) yesterday agreed to raise output at a special meeting in a bid to replace lost Venezuelan supplies and lower oil prices from close to two-year highs.
United Arab Emirates Oil Minister Obeid bin Seif al-Nasseri didn't provide details on the production increase, and further information wasn't immediately available.
Oil prices, now about US$30 a barrel, are expected by ministers to decline after the decision. Opec has a target range of US$22 to US$28 a barrel. Disruptions to Venezuela's exports and a possible war with Iraq boosted prices 44 per cent in London last year, the second-largest gain of the past two decades. Opec last week called its second meeting in a month, after crude oil prices in New York surged above US$33 a barrel.
Saudi Oil Minister Ali al-Naimi said members already are pumping more oil outside of their quota accord to replace lost Venezuelan output.
'There is no shortage. We never allowed the shortage to take place,' he told reporters earlier yesterday. 'There is a significant shortage from Venezuela, but there is no shortage in the international market.'
Saudi Arabia can increase production to more than 10 million barrels a day, from an estimated eight million barrels last month, within two weeks, the minister said. It would take 90 days to sustain supplies at 10.5 million, and the nation could go beyond that 'rather quickly', he said.
Ministers from Iraq, Libya, Kuwait and Iran didn't show up for the meeting yesterday. The Venezuelan government is struggling to maintain basic services as the six-week strike slows oil exports and production. Venezuelan oil production plunged by 2.3 million barrels a day in December to an average 700,000 barrels a day, according to Bloomberg estimates.
'We are increasing production,' said Ali Rodriguez, head of Venezuela's state-owned oil company, yesterday. 'Our objective is to reach a level in order to satisfy all our commitments to our customers.' He declined to give figures of the nation's output and said it's targeting a return to normal by the end of February. - Bloomberg