OPEC produces more oil to curb prices
Kuwait City, September 5:
Organisation of Petroleum Exporting Countries (OPEC) president Sheikh Ahmad Fahd al-Sabah reaffirmed here the cartel is producing 30.4 million barrels per day (bpd), one million bpd over market needs, in a bid to curb soaring oil prices.
“OPEC is currently producing 30.4 million bpd. This production is more than the market needs to allow the building of strategic and commercial stocks in order to stabilise prices,” Sheikh Ahmad said. He added there was one million bpd of overproduction in the market.
The figure of 30.4 million bpd is the same as that given by OPEC officials in early August, well before Hurricane Katrina drove up oil prices to record highs. Sheikh Ahmad said current oil prices are above what the crude prices should be. “If measured by economic factors only, crude prices should be lower than their current level,” Sheikh Ahmad, who is also Kuwait’s energy minister, said. He attributed the rise to “geopolitical and climatic factors in addition to speculations in world markets and lack of refining capacity.” He also said that Hurricane Katrina in the US will further negatively affect supply of products.
Sheikh Ahmad said in a statement Wednesday that OPEC would do its utmost to ensure the stability of the global oil market in the wake of Hurricane Katrina and would discuss the means at its meeting in Vienna on September 19-20. World oil prices slumped on Friday as the US government led a drive by major industrial powers to release emergency supplies of crude onto markets still reeling from Hurricane Katrina.
Oil prices fell on Monday after industrialised nations agreed to release 60 million barrels of crude from their strategic stockpiles to help avert a severe fuel shortage in the US. The US refinery system was struggling to recover from Hurricane Katrina, with two storm-shuttered facilities restarting and flow of crude improving enough to allow refineries in the Gulf Coast and Midwest to ramp up production. But four damaged Gulf Coast refiners look likely to vemain shut for weeks or even months, taking with them more than five per cent of US capacity. On London’s International Petroleum Exchange, October Brent was down to $65.07. The New York Mercantile Exchange had closed at $67.57 a barrel on Friday. — AP