OPEC as no spare capacity
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Date: Tue, 03 Aug 2004 17:00:50 -0000
Subject: [energyresources] OPEC as no spare capacity
OPEC head: We have no extra oil
Cartel's president calls crude prices "crazy," warns of supply
shortage as demand accelerates.
August 3, 2004: 7:11 AM EDT
JAKARTA (Reuters) - OPEC has no extra oil to immediately supply the
world market to cool record-high prices, the head of the group said
"The oil price is very high, it's crazy. There is no additional
supply," said OPEC president Purnomo Yusgiantoro, who is also
Indonesia's oil minister.
U.S. oil hit a high of $44.24 a barrel Tuesday, the highest since
crude futures were launched on the New York Mercantile Exchange in
1983. London's Brent crude jumped 48 cents to hit a high of $40.45 a
"Minister Naimi has said Saudi Arabia can increase production, but
they cannot do it immediately," said Purnomo, referring to Ali al-
Naimi, oil minister for the world's biggest exporter, Saudi Arabia.
A Gulf industry source said late last month that Saudi Arabia may
boost production to 9.5 million barrels per day (bpd) in August.
That output level would be just a million bpd below the country's
Purnomo's comments echoed those Monday of Algerian Oil Minister
Chakib Khelil, who said the Organization of the Petroleum Exporting
Countries had done all it could to stop this year's oil price rally.
"OPEC can do nothing," Khelil told reporters in Algiers.
International oil prices have surged more than one-third since the
end of 2003 as global demand has accelerated with robust economic
growth, stretching world production almost to its limits.
Security fears in the Middle East, which pumps about one-third of
global output, and supply disruptions or potential outages in other
major producers such as Nigeria, Norway and Russia have helped boost
oil markets higher.
Some industry estimates indicate that OPEC, which accounts for about
40 percent of supply, is pumping close to 30 million bpd of crude
for the first time since 1979.
The group, which raised its official production limits to 26 million
bpd on Aug. 1, has been producing way over its self-imposed ceiling
to try and dampen soaring prices.
The official limits exclude Iraq, where exports are expected to
reach between 1.7 and 1.8 million bpd this month as operations
recover from a series of sabotage attacks earlier this year.
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