VARIOUS: OPEC PRODUCERS AGREE SURPRISE CUT IN OIL SUPPLIES THAT COULD RAISE COSTS THIS WINTER
Record ID:
344809
VARIOUS: OPEC PRODUCERS AGREE SURPRISE CUT IN OIL SUPPLIES THAT COULD RAISE COSTS THIS WINTER
- Title: VARIOUS: OPEC PRODUCERS AGREE SURPRISE CUT IN OIL SUPPLIES THAT COULD RAISE COSTS THIS WINTER
- Date: 25th September 2003
- Summary: (W5) VIENNA, AUSTRIA (SEPTEMBER 24, 2003) (REUTERS) 1. SLV FLAGS ABOVE OPEC HEADQUARTERS; MV/SLV OPEC HEADQUARTERS WITH ARMED GUARDS 0.22 2. MV AHMAD AL-SABAH, KUWAITI OIL MINISTER ARRIVING FOR MEETING 0.30 3. MV ALI NAIMI, SAUDI ARABIAN OIL MINISTER ARRIVING FOR MEETING 0.36 (W6) LONDON, UNITED KINGDOM (SEPTEMBER 24, 2003) (REUTERS) 4. SCU GRAPHICAL CHART SHOWING JUMP IN BRENT OIL PRICE AFTER OPEC'S DECISION 0.43 (W6) VIENNA, AUSTRIA (SEPTEMBER 24, 2003) (REUTERS) 5. SLV MINISTERS AND DELEGATIONS SEATED FOR CONFERENCE 0.49 6. . (SOUNDBITE) (English) KUWAITI OIL MINISTER AHMAD AL-SABAH SAYING "Although the price is still in the average of the OPEC basket, 22-28 (US$), but because of this year's earlier increase of the 900 (thousand barrels) to reach 25.4, because of the recovery of the oil industry in Iraq, we think now Iraq will actually recover, and for that we have to cut nine hundred thousand to solve the problem." 1.16 (W6) UNIDENTIFIED LOCATION, MIDDLE EAST (FILE) (REUTERS) 7. SLV OIL REFINERY (3 SHOTS) 1.31 (W6) VIENNA, AUSTRIA (SEPTEMBER 24, 2003) (REUTERS) 8. SLV DELEGATIONS SITTING AROUND TABLE, REPORTERS STANDING AROUND TABLE 1.44 9. (SOUNDBITE) (English) IRANIAN OIL MINISTER BIJAN ZANGENEH SAYING "There was no dispute. We welcome Iraq and we hope with the support of Iraq as a founder member of OPEC, OPEC will be stronger then before. We need cooperation bilaterally with Iraq and within OPEC." 2.09 (W5) VIENNA, AUSTRIA (SEPTEMBER 24, 2003) (REUTERS) 10. SLV NEWS CONFERENCE 2.17 11. . (SOUNDBITE) (English) IRAQI OIL MINISTER IBRAHIM BAHR AL-ULOUM SAYING "Let me first state clearly that Iraq as a founder member of OPEC has always been consistently defending OPEC aims and objectives, taking actions and implementing policies which have over the year strengthened OPEC's role and existence." 2.47 12. SLV NEWS CONFERENCE 2.51 13. (SOUNDBITE) (English) IRAQI OIL MINISTER IBRAHIM BAHR AL-ULOUM SAYING "We are exporting currently 900,000 barrels a day. We are expecting this number to increase to 1.5 at the end of the year and then it will be expected to increase to 1.8 by the end of March next year." 3.19 14. SLV NEWS CONFERENCE 3.22 15. (SOUNDBITE) (English) AL-ULOUM SAYING "All the contracts which were signed by the previous regime will be reviewed case by case." 3.32 (W6) AL GYARAH OIL REFINERY, 45 KM SOUTH OF MOSUL, IRAQ (SEPTEMBER 24, 2003) (REUTERS) 16. SLV AL-GYARAH OIL REFINERY (6 SHOTS) 4.07 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 10th October 2003 13:00
- Keywords:
- Location: VIENNA, AUSTRIA/ MOSUL, IRAQ/ LONDON, UNITED KINGDOM/ VARIOUS UNIDENTIFIED LOCATIONS
- City:
- Country: Austria England United Kingdom Iraq
- Reuters ID: LVA3WDCXOYK5WG9WUTOSPRE4AIR2
- Story Text: OPEC producers agreed a surprise cut in oil supplies
on Wednesday that could raise fuel costs this winter and
hamper economic growth.
The cartel decided on Wednesday (September 24, 2003) to
reduce output for 10 members, excluding Iraq, by 900,000
barrels a day to 24.5 million barrels daily from November 1.
"Although the price is still in the average of the OPEC
basket, 22-28 (US$), but because of this year's earlier
increase of the 900 (thousand barrels) to reach 25.4,
because of the recovery of the oil industry in Iraq, we
think now Iraq will actually recover, and for that we have
to cut 900 thousand to solve the problem," said Kuwaiti oil
minister Ahmad Al-Sabah.
The decision could inflate energy bills for oil
importing nations during the northern hemisphere winter.
U.S. light crude futures rose immediately and at 1400
GMT stood up 89 cents at $27.99 a barrel. Shares in the
world's biggest listed oil company, Exxon Mobil Corp, rose
one percent to $37.44 in early trade on the U.S. stock
market. IPE Brent crude oil futures leapt by more than 4.5
percent on the news. November Brent jumped to a session
high of $26.85, before retracing slightly to sit up $1.20
at $26.72/bbl by 1512 GMT.
The Organisation of the Petroleum Exporting Countries
had seen world oil prices ease this month to four-months
lows, despite a sluggish recovery in post-war Iraqi output.
Aiming to keep prices in a $22-$28 band for a basket of
their crudes, several ministers entering Wednesday's
meeting had said they saw no reason for a change in output.
The recent price fall and projections that increasing
volumes from rival non-OPEC suppliers like Russia were
swamping demand growth appeared to change minds.
Delegates said ministers were worried about a
counter-seasonal crude stockbuild during the fourth quarter
and Iraq's continued recovery towards pre-war supplies.
Projections for 2004 from the International Energy
Agency, adviser on energy to 26 industrialised nations, are
for 1.4 million bpd of extra non-OPEC supply and only 1.1
million bpd of demand growth on the 79 million bpd world
market.
Ministers agreed to meet again on December 4 to review
policy for the first quarter.
They postponed a discussion on the election of a new
secretary-general until that meeting.
Iraq, attending its first OPEC meeting since U.S.
occupation, reassured fellow members that Washington's
influence would not prevent it staying in the cartel.
"Iraq will remain in OPEC as a full member," Iraq's new
Oil Minister Ibrahim Bahr al-Uloum told a news conference.
He said Baghdad's reintegration into OPEC's quota
system would have to wait until Iraqi production, still to
reach pre-war volumes, had been restored.
All contracts under the previous regime will be
reviewed on a case by case basis, he said. They will be
checked against the interests of Iraq.
Uloum said Iraq aims to match its pre-war oil output
but they would not take any immediate action on tighter oil
supplies despite jitters about falling crude prices.
He also said Iraq needed over $2 billion to restore its
oilfields after years of neglect and welcomed foreign
investment in its exploration and production sector.
U.S. forces are currently providing security for Iraqi
oil pipelines and refineries to prevent attacks and
sabotage. At the al-Gyarah oil refinery, 45 kilometres
south of Mosul, Iraqi technicians are now working round the
clock to repair the facilities and resume production. The
refinery has a maximum capacity of 40,000 barrels per day
but technicians hope to start with 2,000 barrels per day.
According to Reuters poll, security problems and
dilapidated equipment will prevent Iraq's oil production
capacity regaining levels seen before the U.S. occupation
until the second half of next year.
The mid-range of 13 forecasts in the September 18-22
poll of analysts saw Iraqi output capacity restored to a
pre-war 2.8 million barrels per day (bpd) in the fourth
quarter of 2004.
Estimates ranged from mid-2004 to not before 2006.
As well as looting of equipment, a major problem is the
pipeline connecting the northern Kirkuk oilfields to
Turkey. Sabotage has kept it out of action since the March
occupation.
pessimistic than the United States, which says output could
reach three million bpd by mid-2004. Net of crude
re-injected into northern reservoirs, production averaged
1.05 million bpd in August.
The poll's median forecast put capacity at 1.8 million
bpd by the end of this year.
By the end of 2004, it was expected to rise to 2.8.
Analysts thought the 3.5 million bpd level, Iraq's
capacity before the 1990-1991 Gulf war, was years away.
After the Gulf war, U.N. sanctions forced Iraq to slash
production, leading to years of underinvestment in the
industry.
Exports resumed in 1996 under the U.N. oil
for-food-scheme. Under the programme Iraq can claim some
$1.7 billion in oil equipment, but more cash is needed.
At around 112 billion barrels, Iraq's proven oil
reserves are second in size only to Saudi Arabia, so
production could eventually go far higher.
Before the 1990-1991 Gulf war, Iraq's OPEC quota was
3.14 million bpd, on a par with fellow-member Iran. Iran's
quota is now 3.73 million bpd and experts say the issue of
Iraq's quota is unlikely to arise until capacity reaches
the 3.0-3.5 million bpd level.
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