KUWAIT CITY, 8 June 2005 — The president of OPEC said yesterday he would propose a 500,000 barrel per day (bpd) hike in the organization’s output ceiling at a meeting next week if prices remain at current high levels.
“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, 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 organization’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 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 favor of that,” he said.
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 $22 and $28 a barrel.
Meanwhile, world oil prices fell yesterday after OPEC comments suggesting an increase in crude production output, while traders anticipated rising energy stocks in the United States.
New York’s main contract, light sweet crude for delivery in July, fell 44 cents to $54.05 per barrel in early deals.
In London, the price of Brent North Sea crude oil for delivery in July lost 32 cents to $53.35 per barrel.
