JEDDAH�Saudi Arabia has called for an "appropriate increase" in oil production from the Organization of Petroleum Exporting Countries in order to restore equilibrium to the international oil market and re-establish price stability. The call was made in a statement issued Wednesday at the end of a meeting of the kingdom's Higher Council for Petroleum and Minerals, chaired by King Fahd bin Abdulaziz al-Saud, the Saudi Press Agency reported.
"The council emphasized the kingdom's declared policy towards the oil market," the statement said. "This policy aims at achieving stability in the oil market in a way that secures the interests of exporting countries as well as continuing global economic growth. It also aims at stability of oil supplies and prices at reasonable levels, in line with what has been agreed by OPEC countries concerning price levels during their June meeting."
Oil futures prices topped $33/bbl in the US Wednesday, and the OPEC basket of seven crudes was selling for $31.70, well above OPEC's $28 price-band limit. The group has agreed to adjust production in 500,000 b/d increments whenever the OPEC basket price remains outside the $22-28/bbl range for more than 20 consecutive days.
Saudi Arabian Oil Minister Ali al-Naimi has been instructed to achieve those objections by working with other OPEC countries to boost oil output by an amount that restores market stability, according to the statement. It also asked the minister to review a "suitable mechanism" to create such stability while pursuing coordination with other producers.
Presumably, this is to be done preceding and during the next OPEC ministerial conference, to be held in Vienna Sept. 10.
Multab Abdullah al Nafisa, secretary of the higher council, said the council reviewed the kingdom's oil strategy, which emphasizes Saudi Arabia's unique role in the international oil market and its continued cooperation with various countries, within and outside OPEC, in order to achieve oil market stability and secure supplies for consumers. The strategy is also aimed at maintaining the share of oil in global energy consumption, preserving the kingdom's market share, and maintaining an acceptable level of production capacity, Nafisa said.
The council also approved Saudi Aramco's work plan for 2001-05 during the meeting. Aramco's policy for the period is aimed at maintaining a suitable level of production capacity, so that the kingdom would be able to meet any shortfall in global demand and face any potential negative effects on the oil market situation, he explained.
