BRUSSELS, 10 June 2005 — OPEC yesterday called for lower oil prices, suggesting that a “gesture” needed to be made to increase either real production or output quotas at an upcoming gathering of the cartel. Meeting here with European Union officials and ministers, the president of the Organization of Petroleum Exporting Countries, Sheikh Ahmed Fahd Al-Sabah, voiced concerns that current global oil prices were too high.
“Prices should be lower than actual prices by between five and eight dollars” per barrel, Sheikh Ahmed, who is also Kuwait’s oil minister, was quoted as saying by Kuwait’s official news agency KUNA. The OPEC chief has proposed a 500,000 barrel per day (bpd) hike in the cartel’s output ceiling at a meeting next week if prices remain too high.
World oil prices rebounded yesterday as speculators dived into the market amid supply disruptions in Iraq and ahead of OPEC’s June 15 meeting in Vienna to discuss the group’s output levels, analysts said. New York’s main contract, light sweet crude for delivery in July, gained 71 cents to 53.25 dollars per barrel in early deals. In London yesterday, the price of Brent North Sea crude oil for delivery in July jumped 82 cents to 52.93 dollars per barrel.
Nigeria’s presidential oil advisor Edmund Daukoru, who also attended the EU-OPEC meeting here, agreed that a “gesture” needed to be made at the OPEC gathering to bring prices lower. “We probably need to make a gesture. This gesture could be to increase actual production or simply formalize what we already are doing,” he said. “It depends on what the prices have done in the next few days.”
The organization agreed in March in the Iranian city of Isfahan to an official fixed ceiling of 27.5 million bpd for the OPEC-10, which excludes Iraq because Baghdad does not participate in the quota system. The 10 OPEC members in the quota system pumped 28.2 million bpd on average in May, up 100,000 bpd from April’s 28.1 million bpd, energy information publisher Platts estimated yesterday.
Sheikh Ahmed has estimated that the group’s real production, including Iraq, stands at about 30 million bpd.
