Opec agrees to increase production
15/07/2004 - 17:18:36With the price of oil stuck above $40 (€32.36) a barrel, Opec agreed today to raise its daily production target by 500,000 barrels, or 2%, in an effort to keep crude prices from lurching even higher.
The Organisation of Petroleum Exporting Countries would made the increase automatically, by mutual agreement, and cancelled a formal meeting it had planned for its members on July 21 at its headquarters in Vienna, said an official for the group in Vienna. The increase will take effect August 1.
While oil-exporting countries are happy to maximise profits, Opec and its de facto leader Saudi Arabia worry that global economic growth and the long-term demand for crude could suffer if prices risee to punishing heights.
Opec, which pumps more than a third of the world’s oil, agreed last month to make a two-step increase in its output ceiling, to try to calm concerns about disruptions in oil supplies from Iraq and a possible terror attack on export facilities for crude in Saudi Arabia.
The group decided first to raise its ceiling by 2 million barrels on July 1, and agreed to follow up with a second increase of 500,000 barrels on August 1 if market conditions warranted.
“The market conditions these days actually call for the implementation of the second part of the agreement. There is a consensus that the extra 500,000 barrels should be implemented August 1,” the Opec official said.
Opec’s production target is now 25.5 million barrels a day.
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