Opec still plans output cut despite high prices: Qatar

10 Mar, 2004

The Opec oil cartel plans to press ahead with a production cut of one million barrels per day (bpd) next month despite soaring oil prices, Qatari Oil Minister Abdullah bin Hamad al-Attiyah said Tuesday.
The Organisation of Petroleum Exporting Countries alarmed oil-importing nations last month when ministers agreed in Algiers to reduce the grouping's official production ceiling by about four percent to 23.5 million bpd from April.
Oil prices have since surged on world markets, topping 37 dollars a barrel in New York on Friday for the first time since March 2002 when US and British troops were massing on the Iraqi border.
But al-Attiyah said he had not heard any proposals by fellow ministers of the 11-nation cartel to reverse the planned cut.
"So far this is the decision," he told reporters on the sidelines of an energy conference in London.
"I have not received from the president (of Opec) or from any other (ministers) suggestions to postpone the cut."
His comments echoed those of Opec president Purnomo Yusgiantoro, the Indonesian energy minister, who told reporters in Jakarta on Monday: "With regards to the oil production cut, we will go ahead."
Al-Attiyah added Opec ministers had an "open agenda" for their next scheduled meeting on March 31 at the organisation's Vienna headquarters.
"What will happen at the next meeting is we will discuss the market situation, demand and supply," he said.
The recent surge in oil prices on world markets was not caused by a supply shortfall, al-Attiyah added, noting that concerns about unrest in Venezuela and Iraq were having an impact.
"I am not relating this high price to a shortage of supply," he said.
But the minister said he would like to see less volatility in the market.
"I am not happy because the market is fluctuating. I would like to see the market stabilise," he explained.
Although oil prices are too high from the point of view of oil consumers, Opec is concerned that prices could slump later this year because of a seasonal fall in demand as winter thaws in the United States and Europe.
When asked whether he was concerned that prices could crash, al-Attiyah told reporters: "I'm very concerned".
For now though traders are nervous about the low levels of US oil and gasoline inventories as well as the risk of disruption to exports from Venezuela, which has seen a series of violent demonstrations against President Hugo Chavez's rule.

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