OPEC advised to ignore uncertainty over Iraq<\/p>\n
LONDON (Reuters): OPEC must ignore short-term uncertainty over
\nIraqi exports and raise its official output ceiling at
\nministerial talks in Jakarta next week, a senior Gulf Arab oil
\nindustry source said on Tuesday.<\/p>\n
The oil producer group should raise its ceiling to more
\naccurately reflect demand for its oil and improve the credibility
\nof its system of output quotas, the source said.<\/p>\n
\"If you factor in all the uncertainties like Iraq then you
\nwill never get anywhere,\" said the source from a non-Saudi Gulf
\nOPEC country in an interview.<\/p>\n
\"Ignore the uncertainty. You are positioning yourself for the
\nlong term.\"<\/p>\n
\"We want to link OPEC quotas to demand increases. That key long-
\nterm signal has to be sent.\"<\/p>\n
OPEC holds its biannual ministerial meeting in Indonesia next
\nweek to set output levels for at least the first half of 1998.
\nOPEC linchpin Saudi Arabia has already indicated that it would
\nlike to raise the group's ceiling to some 27 million barrels per
\nday (bpd) from the current official ceiling of 25.033 million
\nbpd.<\/p>\n
Rampant quota violations have pushed the group's actual output
\nto beyond 27.5 million bpd with most industry observers blaming
\nmuch of the excess on overproduction by cash-pinched producers
\nlike Venezuela and Nigeria who are already producing at capacity.<\/p>\n
Much of the increased production made available by a rise in
\nthe official OPEC ceiling would be enjoyed by just three
\ncountries with spare capacity -- Saudi Arabia, Kuwait and the
\nUnited Arab Emirates.<\/p>\n
The Gulf Arab source said he expected Venezuela would go on
\nincreasing its oil production irrespective of whatever ceiling
\nwas agreed in Jakarta.<\/p>\n
But Venezuela could not then argue against Gulf Arab producers
\nraising their quotas. If they did \"Saudi Arabia will just turn
\naround and say 'well we'll just take your approach then (and
\noverproduce)',\" the source said.<\/p>\n
\"The Saudis are setting a new direction for the long term.
\nSomething has to be corrected so that quotas match demand.\"
\nThe source declined to speculate on the precise level at which
\nOPEC might set a new ceiling but said he tended to doubt it would
\ngo as high as 28 million bpd.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/opec-advised-to-ignore-uncertainty-over-iraq-1447893297",
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"sponsor": "Okusi Associates",
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