VIENNA, 23 August 2003 — OPEC Secretary-General Alvaro Silva Calderon warned here yesterday that changing the group’s production quotas for member states “would undoubtedly carry certain risks and challenges.” Calderon was speaking at the start of a meeting of high-level experts on quotas and said he had asked them to devise a system for determining future quotas, according to an OPEC statement.
“The OPEC secretary-general said that given the importance and sensitivity of the issue, any attempts to revise the way in which quotas were allocated would undoubtedly carry certain risks and challenges,” it said.
“However,” Calderon was quoted as saying, “it is hoped that by working together the member countries arrive at an objective approach that will not only further the interests of individual member countries but also enhance the cohesion of the organization.” Calderon said the findings of the one-day meeting would be discussed by the OPEC secretariat when it meets here on Tuesday.
The Organization for Petroleum Exporting Countries wants to ensure it produces enough oil to satisfy consumer countries, but is fearful of flooding the market once Iraq’s exports get into full swing later this year.
During the last OPEC ministerial meeting on July 31, the group decided to maintain its current production ceiling of 24.5 million barrels per day until September at least. OPEC would rather err on the side of caution and cut production, at the risk of letting the oil price soar, than to cede to the demands of the International Energy Agency and raise output to see the price plummet.
Western countries are calling for cheaper oil to boost their economies and allow them to rebuild their dwindling crude oil stocks. US fuel supplies are currently six percent or 12 million barrels below their 2002 level.
Calderon remarked yesterday that quotas are OPEC’s “essential tool for proactively managing the market to maintain security and stability at prices fair for producers and consumers alike.”
The oil price yesterday eased slightly after an increase late Thursday, as ethnic tensions in Nigeria seemed to ease. In London, a barrel of North Sea Brent for October delivery was trading at $29.65 after closing at $29.71 on Thursday evening.
On the electronic market in New York the price of light sweet crude dropped by 10 cents to 31.78 dollars before official trading began yesterday.
The price of an OPEC basket, the average of seven types of crude, on Tuesday slipped below 28 dollars after hovering above that mark for 12 days in a row.