NEW DELHI, 26 August 2004 — Kuwait’s foreign minister said yesterday his government was pumping crude to maximum capacity to try to stabilize oil prices which he said had been driven up by speculators from outside the Middle East.
“We would like to see stable, lower oil prices. We are producing at maximum capacity, hoping to stabilize the prices,” Kuwaiti Foreign Minister Sheikh Mohammed Sabah Al-Salem Al-Sabah said after meeting Indian officials in Delhi.
“The oil prices have been driven up by speculation. It’s been driven by people who are outside the Middle East,” he added.
Prices of crude moved up slightly in Asian trading Wednesday but remained below $46 a barrel with concerns about supply receding for now, dealers said. Reduced oil flows from Iraq, political tensions in Venezuela, and financial turmoil at Russia’s oil titan Yukos, caused supply fears that pushed oil prices up by nearly $10 a barrel since June.
The price reached an all-time high of $49.40 in New York on Friday but then eased back as speculators were unable to push it above $50. Despite sporadic fighting in Iraq, officials at the South Oil Company said exports were moving at 83,000 barrels an hour, about the normal rate.
Russian President Vladimir Putin gave further comfort to the market, telling US President George W. Bush in a recent telephone call that oil companies would boost exports. However his assurance only partially offset concerns over the fate of Yukos, which has cut its 2004 output forecast because of constraints on financing.
The Kuwaiti foreign minister added his country was keen to increase crude oil supplies to India, which already imports 12 million tons of crude from Kuwait each year.
“Kuwait is keen on investing in Indian refineries,” Al-Sabah added after signing an India-Gulf Cooperation Council Framework pact on economic affairs.
India, Asia’s fourth-largest economy, imports nearly 70 percent of its crude needs.
The six-country GCC bloc, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates, is important to India’s economic interests, because of its dependence on oil imports and the remittances that come from the 3.5 million Indians working there.