Jan 08/03 - On a crude attempt by Venezuelan fools to manipulate crude prices
PMBComment: OPEC Secretary General Silva-Calderon was previously
OPEC's Calderon cautious over output hike
Secretary General says large increase or cut in output should be carefully evaluated as oil prices drop again.
"Any larger increase or cut in output (than 500,000 barrels a day) has to be carefully evaluated within the prevailing circumstances," Silva-Calderon told the cartel's OPECNA news agency in
In March 2000, OPEC agreed to a price band mechanism under which the cartel would raise output by 500,000 barrels per day if prices remain above the range of 22 to 28 dollars for more than 20 consecutive trading days.
The mechanism also sets out that OPEC would cut its output by the same amount if prices fell below 22 dollars for 10 consecutive days.
On Tuesday the price of OPEC's reference basket of seven crude oils remained above 28 dollars for the 14th consecutive trading day. If prices continue at these levels, the 20th day will fall on January 15.
OPEC looks set to substantially hike its production at its extraordinary ministerial meeting in
"It is a difficult situation we are in, since we are dealing with a market affected by a set of extraordinary circumstances that are beyond our control," Silva-Calderon said.
OPEC's current official output quota is set at 23 million barrels a day excluding
Oil prices slid on Tuesday after OPEC announced it planned to hike its production levels in order to bring down prices, which had reached particularly high levels in recent weeks.
In New York, reference light sweet crude for February delivery dropped by 98 cents a barrel to 31.08 dollars, while the OPEC reference basket of seven crude oils dropped 17 cents to 29.72 dollars.
Meanwhile, oil prices dropped sharply for the third day running on Wednesday as speculation persisted that OPEC members were poised to agree to hike output at the cartel's extraordinary meeting in
The price of benchmark Brent North Sea crude oil for February delivery fell to 28.92 dollars a barrel from 29.33 at the close of trading on Tuesday, leaving the contract nursing a six percent loss since the start of the week.
GNI analyst Lawrence Eagles said the key issue for the market in the immediate future was how much more oil members of the OPEC cartel would agree to pump when they meet on Sunday.
"While more oil will clearly be provided, we doubt that the official quota rise will be more than 1.5 million barrels per day," Eagles said.
As a result, he said, world supplies were unlikely to be much higher than those seen in December.
"That is not enough considering the extra demand that is being seen as consumers and governments stock up ahead of an expected war with
OPEC looks set to substantially increase production to respond to growing demand sparked by a general strike in
"The State of Kuwait backs an OPEC production increase of some one million bpd," acting oil minister Sheikh Ahmed Fahad al-Ahmed told the official KUNA news agency.
Sources close to the cartel have said that
The Saudi proposal is backed by
The other nine member countries are in favour of a production hike of one million barrels a day, the sources said.
Eagles said the release of weekly
He said the market was expecting a five-million-barrel decline in crude stocks, which would be only partially offset by higher stocks of both gasoline and distillate fuels.