Latest ArticlesArchivesForumsRSS FeedGuestbookContact UsSearch


Iran Press Service (logo)


You are here: Home > Articles 2004 > March

OPEC CUTS PRODUCTION BY ONE MILLION BARRELS

By Safa Haeri
Posted Wednesday, March 31, 2004

e-mail E-mail this page   print Printer-friendly page

 

"The Saudis have gone from being a reliable OPEC price dove to OPEC's arch price hawk", the British news agency Reuters quoted Mr. Mehdi Varzi, an Iranian energy consultant.

 

VIENNA, Austria 31 Mar. (IPS) As decided last February in Algeria, the Organisation of Petroleum Exporting Countries (OPEC) in its 130th meeting in the Austrian Capital on Wednesday lowered its production by four percent, or one million, down from its 24.5 millions barrels per day, beginning Thursday, in a move that kept crude oil prices near 13-year highs.

The decision, to be enforced as first of April 2004, surprised some analysts, as oil prices are at their highest level, reaching 38 US Dollars in the United States on 17 March.

But Saudi and Iranian oil ministers, Ali al-Na’imi and Bizhan Namdar-Zanganeh had observed that the price rise was due to speculations than a shortage of supply from OPEC.

"The Saudis have gone from being a reliable OPEC price dove to OPEC's arch price hawk", the British news agency Reuters quoted Mr. Mehdi Varzi, an Iranian energy consultant as having commented on the decision.

"That's because of the demands of the Saudi budget. They need higher and higher oil prices every year to meet current expenditure for a larger and larger population", he added.

Other oil experts blamed the upward prices for oil on the dynamic Chinese market that he became the second largest oil consuming in the world, the artificially undervalued US money that penalises most of the Organisation’s 11 members buying goods from the Euro zone and the end of winter.

Informed sources said since Saudi Arabia has already reduced its production, market would not be affected adversely but would stop possible decrease in the prices.

Analysts said the decision could boost oil prices to the psychologically important threshold of $40 per barrel.

"The big question now is how serious OPEC members will be in complying with its new target. An expected drop in seasonal demand during the April-June quarter and quota-busting by individual members of the group could eventually dampen the effects of the cut", one oil analyst said.

Most OPEC members are taking advantage of the current high prices by pumping as much oil as they can. Excluding Iraq, which doesn't participate in the group's quota agreements, OPEC is already exceeding its target by an estimated 1.5 million barrels.

"We made decision to apply the Algiers decision. We're going to meet again in June ... and at that time we're going to review the market", Algerian Oil Minister Chakib Khelil told reporters.

In London, May contracts of North Sea Brent were nine cents higher at $32.54 per barrel.

Kuwait and the United Arab Emirates had proposed the decision to be delayed for one month or two, but other members like Algeria, Nigeria, Libya and Qatar backed Saudi Arabia, the world largest producer and exporter. ENDS OPEC AND OIL 31304

 


 
OPEC CUTS PRODUCTION BY ONE MILLION BARRELS
A security guard looks out from the rooof of OPEC headquarters in Vienna.

 


Subscribe now: RSS news feed from Iran Press Service, plus free headlines for your site

| Latest Articles | Archives | Forums | Guestbook | Contact Us | Search |

Copyright 2004 IRAN PRESS SERVICE. All rights reserved.

powered by Big Mediumi