- Title: ALGERIA: OPEC CUTS TO DEFEND HIGH OIL PRICES
- Date: 11th February 2004
- Summary: (U6) ALGIERS, ALGERIA (FEBRUARY 10, 2004) (REUTERS) 1. SLV EXTERIOR OF HOTEL WHERE OPEC CONFERENCE WAS HELD; WATER FOUNTAIN INFRONT OF HOTEL 2. PAN OVER MEETING; DELEGATES SITTING 3. (SOUNDBITE) (English) IBRAHIM BAHR AL-ULOUM, IRAQI MINISTER OF OIL, SAYING "You have money from the reconstruction plan from the congressional supplementary budget of Iraq." 4. DELEGATES SITTING 5. (SOUNDBITE) (English) ALI AL-NAIMI, SAUDI MINISTER FOR OIL, SAYING "There are official guidelines and there are unofficial guidelines. Remember what we did in September. We took a decision to reduce by 900. 000. What did we do? We watched the market and instead of reducing we informally agreed to keep the market supply. But our eyes were on two things on price and on inventory levels." 6. DELEGATES SITTING 7. (SOUNDBITE) (Arabic) ALI AL-NAIMI SAYING (SAME AS IN ENGLISH ADDS THE MILLION LESS PER DAY FROM OUTPUT) 8. DELEGATES SITTING 9. (SOUNDBITE) (English) OBAID BIN SAIF AL-NASSERI, MINISTER OF ENERGY OF THE UAE, SAYING "The decision is a pre-emptive action against a big fall in the prices. So if we see that the prices continue to slide down (QUESTION FORM OFF: SO IF PRICES CONTINUE TO FALL YOU WILL CUT. WHAT IF PRICES STAY WHERE THEY ARE TODAY?) If the prices stay at a suitable level or high level then we would reconsider the decision." 10. PAN OVER MEETING; PRESIDENT OF OPEC, PURNOMO YUSGIANTORO, ENERGY MINISTER OF INDONESIA, TALKING; MEDIA LISTENING 10. PAN OVER MEETING; PRESIDENT OF OPEC, PURNOMO YUSGIANTORO, ENERGY MINISTER OF INDONESIA, TALKING; MEDIA LISTENING 2.50 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 26th February 2004 12:00
- Keywords:
- Location: ALGIERS, ALGERIA
- Country: Algeria
- Reuters ID: LVA4BL5J8BKECZLOUREEN3ZFCFL5
- Story Text: OPEC cuts to defend high oil price.
OPEC on Tuesday (February 10, 2004) agreed a surprise cut
in oil supplies from April, propelling crude prices higher
and drawing a caution from the United States that it risked
stunting world economic growth.
The deal slices four percent from production limits for
the group that controls half the world's oil trade, to 23.5
million barrels a day effective April 1.
The Organisation of the Petroleum Exporting Countries
(OPEC) said it would also seek immediately to eliminate 1.5
million barrels a day of leakage being pumped above
existing supply quotas.
For consumer nations the pact looks like a threat to
world economic recovery and is a reminder that OPEC appears
prepared to defend prices above its official $22-$28 target
range.
Oil prices spiked on the agreement that underlines
OPEC's capacity to pull a surprise after an unexpected
supply reduction last September.
Leading producer Saudi Arabia said action was needed to
prevent a price crash as demand slackens and world oil
inventories build after the northern hemisphere winter.
"The inventory, where it is now, is fine, we don't want
to see it building," said Saudi Oil Minister Ali al-Naimi.
"We don't want to see a precipitous fall in prices."
Dealers said the agreement would protect OPEC against a
price slump but could undermine cartel credibility because
of the ballooning gap between official quotas and actual
output.
The decision casts doubt on assurances from Riyadh that
it wants no more than $25 a barrel for OPEC benchmark
crude.
Saudi had appeared to soften its tone on oil price
policy since OPEC last met. Naimi said at a December
meeting that higher prices were justified by the impact of
the weak dollar on producers' spending power.
Naimi said cuts were justified by projections for a
heavier-than-normal seasonal second quarter fall in demand
The International Energy Agency, adviser on energy to
26 industrialised nations, provided OPEC with plenty of
ammunition for its decision.
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