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OPEC's Extra Output Helps Stabilize Oil Prices: OPEC Chief

Posted on: Tuesday, 13 December 2005, 09:00 CST

OPEC's extra output helps stabilize oil prices: OPEC chief

KUWAIT CITY, Dec. 12 (Xinhua) -- President of the Organization of the Petroleum Exporting Countries (OPEC) and Kuwaiti Minister of Energy Sheikh Ahmad Al-Fahad Al-Sabah said on Monday that the cartel's decision on extra oil output in last September has helped stabilize oil prices.

Addressing the 138th OPEC Ministerial Conference, Sheikh Ahmad, whose term as the 11-member cartel is to end, said "we decided during our meeting last September to make available to the market our spare capacity of around 2 million barrels per day (bpd) ... This decision was taken to reassure the market when oil prices were at record levels even though the market was well supplied."

As a result of OPEC's measures, he said "the market is now more stable, with prices down by around 20 percent, the OPEC basket price once dipping below 50 US dollars per barrel."

He added that OPEC members are expanding their production capacity with an extra 2.5 million bpd by the end of 2005, when the prices have started rising again due to the expectation of a colder- than-usual winter season in the Northern Hemisphere.

Sheikh Ahmad said OPEC has begun publishing information about expansion plans of upstream and downstream industries in member states on its website to ensure the market's confidence.

OPEC will build up another one million bpd in 2006, the OPEC chief said, noting that by 2010 the cartel's annual crude output will be in excess of 38 million bpd.

Despite the official ceiling of 28 million bpd, OPEC currently produces 30 million bpd, accounting for some 26 percent of the global oil output.

Source: Xinhua News Agency - CEIS

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