Committed to PEOPLE'S RIGHT TO KNOW
Vol. 5 Num 285 Wed. March 16, 2005  
   
Business


Extra oil may not cap price boom: Opec


Opec producers on Tuesday considered a Saudi proposal for a modest increase in oil output but said they could not guarantee to cap record prices.

The Organisation of the Petroleum Exporting Countries, meeting Wednesday, is under pressure from consumer countries to take action to bring prices down from $55 a barrel.

Saudi Arabia is suggesting Opec lift official output limits by 500,000 barrels a day (bpd), 2 percent, to 27.5 million bpd.

"Hopefully I will be convincing enough to move the rest to my thinking," said Saudi Oil Minister Ali al-Naimi.

The Saudi minister said his plan would mean actual Opec output, including existing leakage of about 700,000 bpd over formal limits, would rise from 27.7 million to 28.2 million bpd.

Cartel President Sheikh Ahmad al-Fahd al-Sabah of Kuwait said all in Opec were on board for more oil, but some countries wanted to delay implementing the extra supply until June. With group output already close to a 25-year high, producer countries are showing signs of concern about their ability to meet rapid demand growth in the second half of the year.

Saudi Monday took the unprecedented step of announcing future supply plans, saying it would lift output later in 2005 to meet another year of heavy demand growth led by China.

"It is too high but you should not blame Opec," said Qatar Oil Minister Abdullah al-Attiyah of oil prices. "OPEC has done all it can do. This is out of the control of Opec."

"There is not much we can do, we can make a good will gesture," said Algerian Oil Minister Chakib Khelil.