PARIS, 7 January 2004 — OPEC plans to maintain oil production at current levels at least until it meets in February despite persistent high prices, a source close to the organization told AFP yesterday.
“You shouldn’t really expect anything until the next meeting”, scheduled for Feb. 10 in Vienna, the source said from the Austrian capital where the Organization of Petroleum Exporting Countries maintains its headquarters.
In particular, there is “no way” OPEC would resort to an informal mechanism that provides for production increases if oil prices exceed $28 a barrel for 20 consecutive working days, which occurred several days ago, he said.
The production mechanism, set up in March 2000, has never taken effect automatically, however. “I think there is a consensus between the (OPEC) ministers” to not engage it at present, the source added.
“We know the market is sufficiently supplied. There is enough crude in the market,” and high prices are the result of other factors, he maintained.
Meanwhile, oil prices held firm yesterday as cold weather gripped parts of the United States and Europe and traders braced for an expected drop in US crude oil stocks.
The price of benchmark Brent North Sea crude oil for February delivery gained 11 cents per barrel to $31.00 in late London trading, having risen by a dollar and a half the previous day.
New York’s reference light sweet crude February contract — which also put on more than a dollar on Monday — rose seven cents to $33.85 in early deals. “Heating oil and natural gas prices are up on the back of the cold weather forecasts in the US — that is obviously the main driver for oil prices,” said Commerzbank analyst David Thomas.
Temperatures in the eastern United States are forecast to plunge well below freezing this week, while heavy snow has hit parts of Europe, grounding dozens of planes in Vienna on Monday.
Analysts said oil had also been supported by the recent sharp fall in the value of the dollar — which slid to a new all-time low against the euro yesterday — because the commodity is priced in dollars on world markets.
