OPEC chief to seek 500,000 bpd output hike if prices stay high

The president of OPEC said he would propose a 500,000 barrel per day (bpd) hike in the cartel?s output ceiling at a meeting next week if prices remain at current high levels, AFX-Europe reported Tuesday.

?If prices continue at this high level, I will, as OPEC president, propose to increase this (production) ceiling by 500,000 bpd at the OPEC ministers? meeting in Vienna on June 15,? Sheikh Ahmed Fahd al-Sabah, who is also Kuwait's energy minister, told reporters.

However, he said the proposed rise would not add to OPEC's current actual production because ?I think the real (over) production is already in the market.?

?Our real production now is over 30 million bpd for the OPEC-11 ... We are already over the ceiling.?

The OPEC chief said the increase in OPEC's official output quota is intended to calm a nervous market and reaffirm the cartel's commitment to pump sufficient crude.

?The psychology of the market plays a major role in the prices ... The increase is just to assure everybody that this our real production on the market,? said Sheikh Ahmed, adding that OPEC-10 actual output is over 28 million bpd.

?Now, we are going to Vienna and the prices are almost the same as in Isfahan, maybe higher,? he said in reference to OPEC's previous meeting in the Iranian city on March 16.

?For that, I think it will be the right time to increase 500,000 bpd to the ceiling ... I am in favour of that,? he said.

Sheikh Ahmed also said the OPEC meeting will review a study about a new price band for the OPEC basket, but a decision will not be taken before OPEC's meeting in September. OPEC price band now is between US$22 and $28 a barrel. (*)