OPEC hikes oil production by 500,000 bpd as of July 1: Report
Thursday, June 16 2005 - 07:09 AM WIB
The ministers have also authorized OPEC chairman and Kuwaiti Energy Minister Sheikh Ahmad Al-Fahad Al-Sabah to make another 500,000 bpd increase, whenever necessary, to help stabilize crude prices.
With this raise, OPEC official production ceiling goes up from 27.5 million to 28 million bpd. But the actual production of the cartel's members and Iraq is estimated at over 30 million bpd.
Sheikh Ahmad told KUNA following the 136th Extraordinary Meeting of the Conference of the Organization of the Petroleum Exporting Countries (OPEC) here the cartel means to convey two messages: the first is that production is now over 30 million bpd, and the second is that OPEC is capable of increasing out through whenever necessary to stabilize rates.
The Kuwaiti official admitted that oil prices were currently high, but renewed OPEC's keenness on oil markets' stability through guaranteeing smooth supplies flow.
"We found it necessary to take the 500,000 bpd hike decision today to stabilize the markets," he said.
OPEC will follow up prices and market stability, Sheikh Ahmad added, saying he has been authorized to put into effect a similar increase, after consultations with peer ministers, whenever seen necessary.
Kuwaiti analyst, Kamel A-Haramy, told KUNA the OPEC decision gives a positive message to the markets that indicates it was ready to contribute to balancing crude prices at acceptable rates to all concerned parties.
He attributed the oil prices surge to the lack of sufficient refining capacities in key consumer regions, casting fears of potential accidents as oil refineries are working at non-stop and at full capacity worldwide.
"Such incidents would trigger oil prices to surge anew," he warned.
He advocated that OPEC was not to answer for the current high crude rates as member countries were producing at full capacity. OPEC ministers' next ordinary meeting is to take place here on September 19, 2005. The Organization will, during the same month, commemorate the 40th anniversary of the OPEC Headquarters' move to Vienna with a series of events. (*)