OPEC output boost in limbo

Plans announced yesterday by OPEC to boost production by a total 500,000 b/d by the end of July appear to be in limbo after the price of its basket of crudes dropped below $28/bbl, the level OPEC said would have to be held for 20 days to trigger a rise in output. Iran, the second most influential OPEC member, was reported to have voiced the opinion that a drop below $28/bbl, no matter how brief, was grounds to set aside the rise in output proposed by OPEC Pres. Al�odr�ez Araque.


Plans announced yesterday by the Organization of Petroleum Exporting Countries to boost production from 10 member countries by a total 500,000 b/d by the end of July appear to be in limbo after the price of its basket of crudes dropped below $28/bbl, the level OPEC said would have to be held for 20 days to trigger a rise in output.

Oil prices, which had fallen only nominally following yesterday�s statement by the OPEC News Agency (OPECNA), rebounded sharply today. Brent crude bounced back to $29.01/bbl at one point on the International Petroleum Exchange in London, and West Texas Intermediate jumped to $31.45/bbl on the New York Mercantile Exchange.

Iran, the second most influential OPEC member after Saudi Arabia, was reported to have voiced the opinion that a drop below $28/bbl, no matter how brief, was grounds to set aside the rise in output proposed by OPEC Pres. Al�odr�ez Araque.

Iran�s growing significance to the global oil and gas industry was underscored at a conference last week in London by several US oil company executives, according to OPECNA. Speaking at the Iranian Oil, Gas, and Petrochemicals Forum, Chevron Corp. Vice-Chairman Richard Matzke and Conoco Inc. Vice-Pres. Mike Stinson were reported to have each expressed support for the lifting of present US sanctions against Iran and the �promotion of diplomatic and peaceful links� via stronger �bilateral commercial ties.�

Matzke suggested �commerce has the potential to build a foundation of trust and a network of interdependent relationships that can increase the probability of dissolving diplomatic impasses,� while Stinson referred to the trade-based rapprochement between Washington and Beijing as a model for future relations between the US and Iran that would render sanctions a �bad memory.�

France�s TotalFinaElf SA made the case at the conference for the viability of �buy-back� projects in Iran with the announcement that it had successfully completed the development of the Sirri E and A offshore fields and was ready to �hand them back� to the National Iranian Oil Co..

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