VIENNA, 16 July 2004 — OPEC canceled a ministerial meeting scheduled for July 21 in Vienna, but a production increase on Aug. 1 will go ahead as planned, OPEC said in a statement yesterday.
The Organization of Petroleum Exporting Countries “has decided that there is ... no call for the conference to meet on July 21, 2004, as originally foreseen,” the statement said.
It said OPEC had already increased supply to the market “in order to maintain adequate supply ... and support the continued, robust, global economic growth.”
The next OPEC meeting is to be in Vienna on Sept. 15, the statement said.
It said OPEC would “continue to closely monitor market developments” to do what is necessary “to maintain market stability and keep prices at acceptable levels to both producers and consumers.”
OPEC agreed in June to raise its output ceiling by 2.5 million barrels a day in two stages in an effort to curb world prices which are remaining at record levels despite it being the traditionally slack summer season in the northern hemisphere.
Analysts say this is due to high demand from China and uncertainty from terrorism fears in the Middle East.
OPEC has responded with a rise of two million barrels per day (bpd) in production that began on July 1.
A 500,000 bpd rise is scheduled for Aug. 1, bringing the production of the 10 OPEC states in the quota system — Iraq is not included — to a total of 26 million barrels per day.
On Monday, OPEC President Purnomo Yusgiantoro said in Jakarta that the cartel had no plans to consider any further increases. “We haven’t any agenda to do that yet. We will see the world oil market first,” Yusgiantoro told reporters.
In Vienna, an Erste Bank analyst who wished to remain anonymous said: “Given the current level of prices, OPEC does not plan to either raise or lower production in the short term.
“As a result, the cartel didn’t really have any reason to meet.” Yusgiantoro’s remarks had come in reply to a report last week that quoted Kuwaiti Oil Minister Ahmad Al-Fahd Al-Sabah as saying OPEC would discuss a further output increase at the July 21 meeting.
But Iranian Oil Minister Bijan Namdar Zanganeh had noted that the price of oil was “good” and said OPEC might delay the Aug. 1 increase.
But last Friday, Saudi Arabian Minister of Petroleum and Mineral Resources Ali Al-Naimi clarified matters by vowing that OPEC would implement the output hikes.
Coupled with uncertainty stemming from a Russian tax case against oil giant Yukos, persistent disruption to oil supplies from Iraq and Nigeria and alleged threats of attacks against the United States during its presidential campaign, Zanganeh’s remarks had pushed up crude prices.
World oil prices eased slightly yesterday but remained within two dollars of record highs.
New York’s reference light sweet crude for delivery in August slipped 18 cents to $40.79 a barrel in electronic trading.
The contract had jumped $1.53 to $40.97 a barrel on Wednesday, the highest level since June 1 when US futures hit an all-time record high of $42.33.