Published — Saturday 21 August 2004
Last Update 21 August 2004 3:00 am
JAKARTA, 21 August 2004 — OPEC President Purnomo Yusgiantoro said yesterday he was “very concerned” with escalating oil prices as fears over disruption in supplies and market jitters brought the $50 a barrel mark closer.
“I am very concerned with the continuing rise of oil prices but we will do (our) best at the September OPEC meeting,” OPEC President Purnomo Yusgiantoro told reporters here. Yusgiantoro said the organization’s members were holding talks ahead of its Sept. 14 meeting in Vienna, but no solution was expected before the formal get-together.
“We will continue to communicate with OPEC ministers and we agreed to wait until September.”
His comments came as prices for New York’s benchmark light sweet crude contract for October delivery touched $48.00 a barrel in early Asian trade.
Yusgiantoro added that the organization was unable to comprehensively forecast how high prices would go.
“If there are other factors beyond OPEC’s reach, it will be difficult for OPEC to see its impact on prices.”
He said OPEC’s “crisis study team” was scheduled to present a report when the organization met with non-affiliated oil-producing countries on Sept. 16 and 17.
“We hope for a significant solution to solve the rising oil prices.”
“I hope prices will not continue going up. We will do our best to stop prices from rising,” Yusgiantoro said.
Meanwhile, a lack of investment means that OPEC production capacity has not increased for 30 years, a former president of the organization, Sadek Bussena, said yesterday. Bussena, a former Algerian energy minister, told French RFI radio: “People forget that OPEC’s production capacity has been about the same for 30 years.
“In 1973, at the time of the first oil crisis, OPEC had production capacity of 31 million barrels per day, and it is the same today.
“That means that we have not invested sufficiently even though reserves of oil are available. They are big and they are enough to cover demand for decades to come.”
But the reserves were in countries “in regions which are not stable and where investment is not carried out in the right way”.
Also oil-producing countries had had unpleasant experiences with big changes in the price of oil, he said, in a reference to past sharp falls in the price.
He urged the international community to assist investment in these countries in terms of geopolitics and the economy and “to avoid being alarmed” each time there is trouble in a producing country.
The price of the OPEC basket of seven crude oils has climbed to a record $42.60 a barrel, the organization’s official news agency OPECNA said yesterday.
The basket price is always published with a one-work day delay, which means the record price was set on Wednesday. The latest peak follows Wednesday’s record high of $42.07 a barrel, announced on Thursday by OPECNA.
“With no sign of any respite from anywhere, traders kept bidding up prices, believing in real and imagined threats of supply disruptions,” OPECNA said.