Lukman: OPEC poised to act on prices

Rilwanu Lukman, secretary general of the Organization of Petroleum Exporting Countries, today underlined that the organization stands poised to 'stabilize the oil market' by adjusting its collective output to offset rates seen to be 'too high or too low' but refused to be drawn on whether such a move was immediately warranted by the current level of oil prices.


CARACAS�Organization of Petroleum Exporting Countries Sec. Gen. Rilwanu Lukman today underlined that the organization stands poised to 'stabilize the oil market' by adjusting its collective output to offset rates seen to be 'too high or too low' but refused to be drawn on whether such a move was immediately warranted by the current level of oil prices.

�Right now we are ready to take action,� Lukman told a brief news conference shortly after a meeting with Venezuelan President Hugo Ch�z at the beginning of his 5-day visit to Venezuela. He said OPEC was ready to pump an additional 500,000 bbl of oil on the market if necessary to cool overheated oil prices but declined to comment on whether his organization felt the current level of prices should trigger rapid OPEC action.

"OPEC remains ready and prepared to stabilize the market," said Lukman, adding that the organization had a �tool" to influence prices either upward or downward. The OPEC official was referring to the group's recently approved oil price band that allows for a production increase if its so-called basket of crudes remains above $28/bbl for 20 days running.

Lukman refused comment on what he called �speculation� that Saudi Arabia�OPEC's largest oil producer�was considering the possibility of unilaterally pumping extra oil on the market. "We try to avoid indulging in speculation," he said. �[OPEC members] have a common objective, and we are working as an organization.�

Noting the willingness of non-OPEC producers Norway and Mexico to back OPEC's oil production decisions, Lukman said "we [OPEC producers] are ready" to increase output by approximately 500,000 b/d in addition to previous increases.

Lukman also stressed that other oil market developments currently contributing to oil price hikes were outside OPEC�s influence. The organization, he said, "has no control over the manipulators" of the market. "We address the [market] fundamentals to get a fair price."

OPEC Pres. Al�odr�ez Araque echoed Lukman�s assurances that OPEC would make use of its �new internal mechanism� to regulate prices. However, according to the OPEC News Agency, Rodr�ez, who was in talks today with Nigerian President Olusegun Obasanjo as part of a tour of OPEC member states, cautioned that sustaining current oil price and supply levels is the organization�s �most difficult task.�

�OPEC has increased the production allocation of its member countries, while non-OPEC oil producers have also increased supply,� Rodr�ez stated.

Rodr�ez suggested that the solution to volatile oil prices was now �beyond the scope� of OPEC. "There is no problem on the supply of crude oil...it is a problem of refining."

Outlining OPEC�s program for the organization�s second summit of heads of state, to be held in Venezuela in September, Rodr�ez expressed his optimism that the �interests of member countries would be adequately protected.�

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