The Independent: Opec ministers prepare to lift quotas to stabilise prices: Tuesday 20 September 2005
By Saeed Shah
Published: 19 September 2005
Opec oil producers are to discuss raising supply limits, for the sixth time in 15 months, to counter global energy security concerns after Hurricane Katrina pushed crude prices over $70 a barrel.
Under pressure from importing nations, the Organisation of the Petroleum Exporting Countries begins a two-day meeting today to consider raising output even though fuel demand is finally starting to show signs of buckling under the impact of high prices. The price of crude has fallen from a record $70.85 a barrel in the three weeks since Katrina, closing on Friday at $63. "For Opec the price is still very high," said the cartel's president Sheikh Ahmad al-Sabah yesterday.
Ministers say they will consider adding 500,000 to 1 million barrels a day on to existing limits of 28 million bpd. Iraq, with no quota, pumps an additional 2 million bpd.
"We don't want to see that we are facing an international economic slowdown because that is not to our benefit," said Abdullah al-Attiyah, Qatar's oil minister.
But Opec is warning that any cartel agreement may not actually deliver more crude because global refining is already stretched to full capacity. With nearly 900,000 bpd of US refining still shut after Katrina, the only producer able to pump more, Saudi Arabia, cannot find buyers.
"The talk of an increase is mainly to give comfort to the market," said Nigeria's oil minister Edmund Daukoru. "It is refining capacity we have to worry about."
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