OPEC to hold oil production steady, pending resumed Iraqi exports

As expected, the Organization of Petroleum Exporting Countries decided Tuesday to keep oil production at the current level of 24.2 million b/d. Delegates of the 10 nations, plus Iraq, agreed to maintain production during an informal meeting in Vienna that preceded their formal meeting at OPEC headquarters.


By the OGJ Online Staff

HOUSTON, July 3 -- As expected, the Organization of Petroleum Exporting Countries decided Tuesday to keep oil production at the current level of 24.2 million b/d.

Delegates of the 10 nations, plus Iraq, agreed to maintain production during an informal meeting in Vienna that preceded their formal meeting at OPEC headquarters.

Sec. Gen. Alí Rodríguez Araque said the group's decision took into consideration the possibility that Iraq might resume exports of 2 million b/d in the near future.

Last month Iraq halted exports in protest of plans by the United Nations Security Council to modify sanctions limiting the use of Iraqi oil revenues. On Monday the council indicated it would opt to extend the existing sanctions for 5 months. Iraq had indicated that under those circumstances, it would resume production.

OPEC delegates said if a resumption surge of Iraqi exports causes world oil prices to drop outside the group's $22-28/bbl target range, it would hold a special meeting to consider a reduction of production quotas. The group's next regular meeting is planned for Sept. 26-27.

The Tuesday OPEC meeting was delayed while Security Council members discussed an extension of sanctions. Under the oil-for-food program begun in December 1996, the UN earmarks about 60% of Iraq's oil export revenues for humanitarian goods such as food and medicine.

Anticipation of the OPEC action pushed August crude prices 29¢ higher to $26.24/bbl on the New York Mercantile Exchange.

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