OPEC head says "politics" adding $10-$15 a barrel to oil price
Wednesday, September 8 2004 - 10:59 AM WIB
Purnomo said OPEC was concerned about the high oil prices but exceptional circumstances restricted its room to maneuvre on the issue.
"According to our view based on the fundamentals -- supply and demand values -- the price should not be as high as what we see today," he told reporters at the 19th World Energy Congress in Sydney.
"What we see is a political premium between 10-15 dollars per barrel."
Purnomo, who is also Indonesia's Energy and Mineral Resources Minister, cited market speculation and geopolitical factors including unrest in the Iraqi city of Najaf and Russian government action against the country's largest oil producer Yukos, for the high oil price.
He expects prices to fall from current levels of more than $40 by the end of the year, based on contracts exchanged on oil futures markets.
Asked to speculate on how much the price could fall he replied: "Boy ... five dollars a barrel?"
In Asian trade Wednesday, oil prices continued to weaken as concerns over the possible impact of Hurricane Frances on the southern U.S. states which are home to major oil production and refinery facilities faded.
He refused to comment on where the revised band might be set but said it would reflect the impact of inflation and depreciation of the US dollar since the current target band was set in 2000.
Purnomo previously told reporters at the congress that the OPEC target band could be set at $26 to $34.
OPEC represents 11 countries -- Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
Purnomo said the cartel's quota was 26 million barrels a day but it was currently pumping almost 30 million barrels, although he conceded the two million barrels a day from Iraq fluctuated according to the security situation. (*)