Opec Has Done Its Share of Stabilizing Oil Market: Iran Minister

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Monday, September 11 8:47 AM SGT

Opec Has Done Its Share of Stabilizing Oil Market: Iran Minister

TEHRAN, Sept 11 Asia Pulse - Iranian oil Minister Bijan Zanganeh said on Friday that oil producing countries within OPEC have acted responsibly to stabilize oil market by adding 2.5 million barrels per day to their total production within six months, thus preventing any lack of supply. He said that in the past two months, there has been a hike in crude supply in the market by some 1.5 to 2 million b/d.

Noting that fundamental elements in the oil market do not justify oil price hike in the past month, he referred to psychological factors, speculation in the oil market and US presidential elections as important factors in this regard.

The Iranian oil minister said the US imports now some 9 million barrels of crude per day while it needs 10 to 10.5 million barrels, adding that it is not able to import more due to certain technical problems. he also noted that introduction of a new reformulated gasoline in the US market has increased their demand for sweet crude oil, while most of the OPEC production is of the sour type.

On a decision by OPEC ministers in their next week meeting, Zanganeh said OPEC members are not for high crude prices or creating artificial demand in the market and have repeatedly supported dialogue among the oil producers and consumers.

Noting that world economic growth forecast was 4.5 percent for 2000 while the figure is 3.9 for next year, he said OPEC ministers should take into consideration this decline in world growth in order to avoid imbalanced supply of oil in the market.

About Saudi Arabia's reported unilateral increase in supply by 600,000 barrels a day as of July 1, Zanganeh said this has not been confirmed by his Saudi counterpart and Saudi Arabia as a founding member of OPEC is not expected to act against the organization's decisions.

On the current situation of the world oil market, Zanganeh said it is too complicated to allow a sound forecast, but what is a clear fact in the market is a dwindling excess capacity of crude production which stands now at less than 2 million barrels per day. He said non-OPEC oil producing countries are now doing their best to produce 49 million barrels per day and the OPEC production stands at 28.5 million b/d.

The Iranian oil minister said drop of oil prices in an 18-month period led to insufficient income for OPEC members which prevented these countries from investing enough money for creating excess capacities. Zanganeh underlined that the US sanctions against Libya, Iran and Iraq have had a tremendous negative impact on oil supply in the world, disrupting the mid-term creation of excess capacity.


-- Martin Thompson (mthom1927@aol.com), September 11, 2000


So, we're importing 10% less oil than we need. No wonder there is a shortage.

-- LillyLP (lillyLP@aol.com), September 11, 2000.

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