AUSTRIA: OPEC AGREES TO RAISE PRODUCTION TO STAVE OFF OIL PRICE SHOCK THREATENED BY A STRIKE IN VENEZUELA AND A POSSIBLE WAR IN IRAQ

Record ID: 344877

  • Title: AUSTRIA: OPEC AGREES TO RAISE PRODUCTION TO STAVE OFF OIL PRICE SHOCK THREATENED BY A STRIKE IN VENEZUELA AND A POSSIBLE WAR IN IRAQ
  • Date: 14th January 2003
  • Summary: (W7) VIENNA, AUSTRIA (JANUARY 12) (REUTERS) 1. SLV PRESS CONFERENCE 0.05 2. (SOUNDBITE) (English) OPEC PRESIDENT AND QATARI OIL MINISTER ABDULLAH AL-ATTIYAH SAYING "We believe that by this OPEC is sending a very strong message to the market and consumers. Now we will wait for the market to react. Hopefully this is a clear message but as you see we
  • Embargoed: 29th January 2003 12:00
  • Keywords:
  • Location: VIENNA, AUSTRIA
  • Country: Austria
  • Reuters ID: LVAAKPHUL2J6ET85EDPN6GFQX1OM
  • Story Text: OPEC has agreed to raise production to stave off an oil
    price shock threatened by a strike in Venezuela and war in
    Iraq.

    The Organisation of Petroleum Exporting Countries
    lifted output by seven percent, adding 1.5 million barrels a
    day for a new 10-member limit of 24.5 million bpd, at the top
    end of expectations.

    "We believe that by this OPEC is sending a very strong
    message to the market and consumers", said OPEC President
    Abdullah al-Attiyah.

    The new oil will only go part of the way to compensate for
    an estimated two-million-barrel-a-day stoppage from Venezuela.

    That's because Caracas was granted its share of the higher
    limit and because many others in OPEC have little, or no spare
    capacity.

    Cartel sensitivities mean the extra oil was divided
    pro-rata among all 10 with quotas, but key to flows now will
    be how quickly, and how far, leading producer Saudi Arabia
    opens the taps.

    Riyadh will count Sunday's deal as a victory. Most others
    in OPEC wanted an addition of just one million bpd.

    But Saudi wants to be sure to prevent oil spiking to
    heights that might harm world economic growth and hit crude
    demand. The United States made a public appeal for more oil
    after U.S. crude recently hit a two-year peak of over $33 a
    barrel.

    Saudi controls most of the world's spare capacity and can
    only count on the UAE for any substantial help.

    Algeria and Nigeria may be able to pump a little more.

    That addition from the Organisation of Petroleum Exporting
    Countries will go part of the way to compensate for an
    estimated two million barrel a day Venezuelan hole in supply.

    Embattled Venezuelan officials accused striking oil
    workers of sabotaging the country's energy industry, while
    assuring fellow OPEC states the government would restore
    output swiftly.

    "This is not a labour strike, this is a political conflict
    and I repeat, the intention is not to obtain benefits for the
    workers but to defeat the government," state oil company chief
    Ali Rodriguez told press conference in Vienna.

    OPEC President Abdullah al-Attiyah said OPEC was hopeful
    that Venezuela would return to full production soon and said
    the other cartel members would cut quotas again when that
    happened.

    With no end yet in sight for the strike, that could be
    some time yet. Worse, according to the President of state oil
    company Petroleos de Venezuela SA Ali Rodriguez, sabotage of
    oil refineries and computer systems would prevent a swift
    return to production.

    Also, despite OPEC's assurances to raise production and
    stabilise the market, with a U.S. attack on Iraq possibly
    just weeks away, oil prices do not look likely to fall sharply
    any time soon.


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