OPEC president responds to Bush's call to "open up the spigots"

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

OPEC president responds to Bush's call to "open up the spigots" Agence France-Presse

December 21, 2000

CARACAS, Dec 21 (AFP) - Responding to calls from US President-elect George W. Bush to "open up the spigots," the president of the Organization of Petroleum Exporting Countries (OPEC) stressed Thursday that the market is already overflowing with oil, driving down prices.

Ali Rodriguez, who also serves as Venezuela's energy minister, said OPEC has already "significantly boosted its inventory" and added that "prices are beginning to drop" as a result.

"OPEC opened its valves significantly this year," he insisted, indicating that production had increased by around four million barrels a day.

But Rodriguez also asked Bush to help solve the serious speculation problems that could contribute to a rise in oil prices.

Among the problems he called on Bush to help fix: "refining problems in the United States, which impact prices; transportation problems; and the gravest of all -- speculation problems," he told the local press.

On Wednesday, Bush had said: "There's no question that we're going to have to work with our friends and allies overseas -- particularly with the price of crude oil and heating oil -- to make sure they understand that they've got to treat their friend, the United States, and our market with ease."

"They can't be punishing (their) friend," he added.

But, Bush said, the quickest way to ease the tight oil market "will be to work with OPEC nations and to foster relations so that they may be convinced to open up the spigots to keep the pressure off price."

Earlier Thursday, Rodriguez warned that if oil prices continued their downward trend, the oil cartel could cut production.

"If these tendencies continue -- like today, when the OPEC basket dropped to the bottom of the target band (between 22 and 28 dollars) -- there is no doubt that OPEC will decide to cut production," Rodriguez told Union Radio.

Rodriguez said that, according to the established price range system, if the price of the barrel of oil drops for 20 consecutive days, output can be cut by 500,000 barrels a day.

On Wednesday, US crude oil prices were lower on increased weekly stock builds, analysts said, adding that OPEC output was at its highest level in almost two years following the recent resumption of Iraqi oil exports.

Analysts confirmed that OPEC is expected to cut its output by between 500, 000 and one million barrels a day early in 2001.

Rodriguez said a decision on output could be made at OPEC's meeting to be held January 17 in Vienna, Austria.

http://denver.petroleumplace.com/egatecom/scream/2000/12/21/ANA/0649-0633-Venezuela-oil.lead...html

-- Martin Thompson (mthom1927@aol.com), December 22, 2000


Moderation questions? read the FAQ