OPEC comes to rescue

www.examiner.com Publication date: 01/13/2003 BY BRUCE STANLEY Associated Press

    VIENNA, Austria -- OPEC members agreed Sunday to boost the cartel's oil production target by 6.5 percent to stabilize a world market jittery over a crisis in Venezuela and the possibility of war in Iraq.

    The increase of 1.5 million barrels a day -- to 24.5 million barrels -- would take effect Feb. 1, OPEC President Abdullah bin Hamad Al Attiyah told a news conference at the group's headquarters in Vienna.

    Al Attiyah confirmed that the Organization of Petroleum Exporting Countries wants to keep prices of its benchmark blend of crudes at $22-$28 per barrel. Friday prices hovered around $30.

    Earlier in the day, Saudi Arabian Oil Minister Ali Naimi said the ceiling should remain at 23 million barrels. Saudi Arabia is OPEC's most influential member and has the bulk of the cartel's spare production capacity.

    OPEC said it wanted to calm fears of a supply crunch caused by an ongoing strike in Venezuela. The agreed output hike was near the upper end of what analysts expected.

    The strike, launched Dec. 2 by political opponents seeking to oust President Hugo Chavez, has slashed Venezuela's exports by about 2 million barrels a day. Venezuela normally is OPEC's third-largest producer and a major oil supplier to the United States.

    "OPEC is trying to send a very strong message that it will do its utmost to stabilize demand and supply," Al Attiyah said after delegates reached their decision in informal talks.

    "Now we will wait for the market to react."

    The United States praised the move, saying the hike would support economic growth and stability.