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Venezuela: No need for OPEC quota change

CARACAS, May 09, 2011

Global oil price fluctuations are typical of market instability and a recent selloff confirms Venezuela's position there is no need for quota changes at an OPEC meeting next month, the oil minister said.

Price changes are not always related to fundamentals, making it impossible to predict the behavior of the market, minister Rafael Ramirez said on Friday.

"Oil prices have risen a lot, it goes up and down. It is the typical characteristic of the instability of the market and what is happening in Libya also influences a lot," Ramirez said of a $12 drop in Brent crude prices on Thursday.

South America's biggest crude producer has regularly dismissed suggestions OPEC might need to boost output at its June 8 meeting, saying the market was well-supplied.

"Our position is stronger, we cannot take decisions ahead of time," Ramirez told reporters.

"We should keep working to keep prices at an adequate level. The fluctuations have to do with the violence in North Africa, it is out of OPEC hands to regulate the market."

President Hugo Chavez's socialist government has been an outspoken critic of the attacks on Muammar Gaddafi's forces, which Chavez has denounced as a ploy by the West's "men of war" to steal Libya's crude reserves.

Ramirez said world oil inventories are at the moment above average levels.

He said OPEC member Venezuela was well insulated against oil price changes and Thursday's fall would not affect its infrastructure projects.

The minister said Venezuela had recently received a $1.6 billion payment for the sale of its stake in four Ruhr Oel refineries in Germany to Russia's Rosneft.

He said work on several large oil developments in the Orinoco heavy crude region was going ahead, with the Carabobo projects advancing more quickly thanks to infrastructure already in place. Venezuela aims to produce 50,000 barrels per day of oil from the projects by the end of 2011.

Ramirez said state oil company PDVSA was not currently considering a new bond issue for financing.

Oil prices bounced back on Friday from the previous session's sell off, as shellshocked traders mulled market fundamentals and the frenzy this week that wiped out half the year's gains.

Brent crude traded up 87 cents to $111.67 a barrel at 12:39 p.m. EDT (1639 GMT). U.S. crude futures fell 36 cents to $99.44 a barrel, off earlier highs of $102.38, weighed down by gains in the dollar.

Story by Marianna Parraga from Reuters.

Reuters/ Sat May 7, 2011


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