Crude at $US30 is perfect: Chavez

www.smh.com.au March 3 2003

Venezuelan president Hugo Chavez said yesterday that $US30 a barrel was a "perfect" price for crude oil.

"We have to sell oil at a fair price. $US30 a barrel? Perfect," Mr Chavez told state television station Venezolana de Television while touring an electricity plant in south-eastern Venezuela.

The president's comments came 12 days before OPEC meets in Vienna, Austria, to discuss whether to adjust its production quotas. Mr Chavez did not say what the Organisation of Petroleum Exporting Countries should do.

International oil prices are soaring amid expectations of a US-led attack on Iraq and the lingering effects of a two-month strike in Venezuela's oil industry.

A day after surging to a 12-year high of $US39.99 a barrel, crude oil fell US5c to $US37.15 on the New York Mercantile Exchange on Friday.

Venezuela was the world's fifth largest exporter before the unsuccessful strike to force early elections. The strike began on December 2 and petered out this month. The Government is steadily increasing output.

Mr Chavez said current production was 2.1 million barrels a day, almost two-thirds of pre-strike levels of 3.2 million barrels a day.

But a manager at the state oil monopoly, Petroleos de Venezuela, said production was 1.5 million barrels a day.

Venezuela had to reduce output by 500,000 barrels a day as storage tanks were full, the manager said. It will take up to three days to empty the tanks and restore production to previous levels, the manager said.

In a report released yesterday, former PDVSA executives - fired for joining the strike - said production was 1.1 million barrels a day.