Russia calls on Opec to raise oil supply

21 Feb, 2004

Russia's energy minister on Friday called on the Opec oil cartel to raise production to stop international prices overheating and damaging the global economic growth, including in Russia itself.
"I think Opec should boost its production quota to avoid an explosion on the market," Igor Yusufov told a news conference.
"The world oil balance is on the edge of resource efficiency. There should be more resources on the market."
Oil prices have jumped more than $2 since Opec last week agreed to cut production quotas by four percent from April 1. US crude topped $36 a barrel on Thursday.
Opec cut supply over fears of a price fall in the second quarter when demand declines after the northern winter. At the same time, production rises from non-Opec suppliers like Russia, the world's second largest oil exporter.
"Being an energy minister, I should be very happy with prices of oil standing so high," said Yusufov. "But the Russian economy is interested in limiting the massive flow of hard currency to cut inflation and have less pressure on the economic growth."
Russia is swollen from an inflow of petrodollars which has pushed the rouble higher as central bank buys unwanted dollar supplies.
This has made it difficult for the central bank to curb inflation.
Opec last week also pledged to rein in 1.5 million bpd of supply it has been producing over existing quotas as it seeks to stop spare stocks building in the second quarter when demand declines after the northern winter.

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