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OPEC keeps output stable at 28 million barrels a day
Reuters/Christian Veron
Nigerian Edmund Maduabebe Daukoru, Minister of State for Petroleum Resources and President of the OPEC, speaks to journalists after the first working session at the 114th OPEC (Organization of Petroleum Exporting Countries) ministerial meeting in Caracas June 1, 2006.By Jitendra Joshi
AFP
CARACAS
Petroleumworld.com 06 02 06The OPEC oil cartel decided Thursday to keep its official crude output at a 25-year high of 28 million barrels a day, ministers said.
Ministers ordered a "rollover" of current production levels, Qatar's Energy Minister Abdullah bin Hamad al-Attiyah told reporters as he emerged from a meeting of the 11-nation group in Caracas.
Venezuela's Oil Minister Rafael Ramirez confirmed that there would be no output change. "The levels will be maintained," he said.
Shokri Ghanem, chairman of Libya's National Oil Corporation, said the decision had been "straightforward". "No sweat. It's a rollover," he told reporters.
The move was a recognition by OPEC that any production cut would drive oil prices to new peaks and risk choking world growth.
"Our primary objective is to help stabilise the market. We would hate to do anything that exacerbates the current volatility," said Nigerian oil minister Edmund Daukoru, OPEC's current president, before the end of the meeting.
"We are doing all we can to stabilise prices, but the geopolitical situation continues to be a counter-factor to these efforts," he said, also blaming refinery shortfalls in major consuming nations.
Saudi Arabian Oil Minister Ali al-Nuaimi, whose country is by the most influential OPEC member, said that the global crude market is "oversupplied and over-priced".
The Organization of the Petroleum Exporting Countries met as Iran rejected US demands that it suspend uranium enrichment as condition for direct talks.
"We cannot agree with it," Iranian oil minister Kazem Vaziri-Hamaneh said in Caracas. "It's our right to achieve scientific development and to encourage enrichment," he said.
The oil market has been convulsed for weeks by the threat of UN sanctions against Iran, the second-biggest oil exporter in OPEC.
Crude prices fell heavily on the US offer, before recovering ground on the Iranian remarks. Markets have also been reassured about OPEC's intentions to keep output levels steady.
OPEC has an official production quota of 28 million barrels per day, its highest level in a quarter century, but is under pressure from the Group of Seven club of rich nations to pump more to keep pace with demand.
However, OPEC members argue that oil supplies are plentiful. They blame the tensions over Iran and unrest in Nigeria, sub-Saharan Africa's biggest crude producer, for sparking a speculative market frenzy.
Venezuela, OPEC's only Latin American member, had been pushing for reduced output, but the idea received no support from the Gulf states that dominate the cartel.
Ramirez acknowledged that it was "too early" for OPEC to cut output now but said the group should consider a reduction when it next meets in September.
Venezuela has lobbyied for OPEC to admit Ecuador into its ranks and for Bolivia to be given observer status. Both Latin American countries have angered the United States by tearing up contracts with foreign energy companies.
Officials said other OPEC members were looking more seriously at a Nigerian proposal to invite Angola and Sudan into the cartel. Both African countries have small but fast-growing oil industries.
"We welcome any producing and exporting country that wants to join," Nuaimi said. "The more, the better -- because we are a great organisation!"
Addressing OPEC ministers, Venezuelan President Hugo Chavez said current oil prices were "fair" and should not be allowed to drop to under 50 dollars a barrel.
But other OPEC members have shown no inclination to thumb their noses at oil consumers.
John Hall, managing director of British energy consultancy John Hall Associates, said OPEC might "threaten" to cut output in September.
"But as long as prices remain high, they won't do it. They can't be seen to be getting too greedy," he said.
AFP 01 2254 GMT 06 06
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