OPEC: New output hike from 31 October
The Organization of Petroleum Exporting Countries' conference president, Al�odr�ez-Araque has written to fellow oil ministers suggesting that 'steps be taken' to raise OPEC's collective output by a further 500,000 b/d starting tomorrow, the organization's news agency, OPECNA, reported today.
The Organization of Petroleum Exporting Countries' conference president, Al�odr�ez Araque, has written to fellow oil ministers suggesting that "steps be taken" to raise OPEC's collective output, by a further 500,000 b/d starting tomorrow, the organization's news agency, OPECNA, reported today.
"I am writing to ask you to take the necessary steps to raise your esteemed country's output" by the agreed amount, Rodr�ez wrote. "The measure would be effective "from 31 October 2000."
This will be the fourth time this year that OPEC has raised output quotas in a bid to bring prices below $28/bbl�though the first occasion when a production increase has been triggered by the OPEC's price-band mechanism. Using this device, which members agreed to in March, OPEC members agreed to raise production if the price of a basket of seven types of OPEC crude traded above $28/bbl for 20 days in a row. On Friday, the basket price averaged $30.91, the 20th day above $28.
In total, OPEC has pumped an extra 3.7 million b/d onto world crude markets this year. Including the latest increase, its daily production ceiling stands at 26.7 million bbl.
Reports coming out of some OPEC member states signaled moves were already afoot to implement the increase as of midnight today.
Algerian Energy and Mines Minister Chakib Khelil announced over the weekend that his country would raise its oil output by 36,000 b/d starting Monday. Speaking on Algerian television, Khelil stated that
Algeria's quota allocation would be 872,600 b/d.
Meanwhile, Obaid bin Saif Al-Nasseri, Minister of Petroleum and Mineral Resources of the United Arab Emirates (UAE) has said that his country supported a 500,000b/d increase in OPEC output. Al-Nasseri was quoted by the official UAE news agency as saying: "The UAE favors enforcing the adjustment mechanism. The application of this mechanism is a way of reinforcing OPEC's credibility."
Al-Nasseri stressed that each OPEC member state should shoulder its individual "responsibility" when it came to producing the additional quantities called for by the organization's quota system. "It is unthinkable that one country would produce over its quota to compensate for another that is unable to increase output," he stated.