Boost oil production: EU, Asian finance chiefs
Boost oil production: EU, Asian finance chiefs
Agencies, Tianjin/Kuwait City
Finance ministers from the European Union and Asia called on the
Organization of Petroleum Exporting Countries (OPEC) to boost oil
production, saying "high and volatile" crude costs pose a threat
to global economic growth.
"Ministers called for increased production by the oil-
producing countries," according to the Asia-Europe Meeting (ASEM)
chairman's statement, obtained by Bloomberg News following talks
between EU and Asian finance chiefs in Tianjin, China.
"Continued high and volatile oil prices pose a risk to global
growth."
A 57 percent rise in oil prices in the past 12 months has
clouded the outlook for growth, prompting European Union Monetary
Affairs Commissioner Joaquin Almunia on Saturday to say he may be
forced to slash his 2005 growth forecast for the dozen countries
sharing the euro.
"Recent data suggests that global growth has slowed in recent
months, in part reflecting the further rise in oil prices," said
Takatoshi Kato, deputy managing director of the International
Monetary Fund, in the text of a speech obtained by Bloomberg
News. Kato was attending the ASEM talks.
The ministerial meeting is being held against a backdrop of
calls by lawmakers in the U.S., Europe and Japan for China to
relax the yuan's decade-old peg to the U.S. dollar.
"Ministers expressed their serious concerns about the global
imbalances," the statement said, without explicitly mentioning
the peg.
In Kuwait City, OPEC president Sheikh Ahmed Fahed al-Sabah
said on Saturday that he had begun consulting with members to
sanction a second output quota hike for the cartel to 28.5-
million barrels per day (bpd), DPA reported.
OPEC ministers agreed at their June 15 meeting in Vienna to
raise the cartel's official oil production ceiling by 500,000 bpd
to reach 28 million bpd in a bid to control soaring prices.
The ministers also gave the OPEC president, who is Kuwait's
energy minister, the power to sanction a second quota hike by
500,000 bpd through telephone consultations, if prices continued
their upward trend.
The first 500,000 bpd increase did not put new oil onto the
market, but was a move to bring OPEC's official production in
line with real production, which stands at 30.3-million bpd,
including Iraq.
On Thursday, oil prices hit a record high of $60 per barrel,
but dropped back to the upper 50s by the close of markets on
Friday.
Sheikh Ahmed Fahed told reporters at the Kuwaiti parliament
that he had already started talks on Friday with the oil and
energy ministers of Qatar and Saudi Arabia, and that he would be
talking to additional OPEC members in the next days.
He recalled the price volatility following a similar OPEC
decision taken in Isfahan, Iran, in March to hike the cartel's
ceiling by 500,000 bpd to 27.5-million bpd with the option of a
second quota hike left in the president's hands, after
consultations.
He said Saturday's market resembled what followed the Isfahan
decision.
The OPEC chief said he could not say when a decision might be
taken on the second ceiling increase, but that he hoped it would
be soon.
Fears of a crude oil supply shortage during the third and
fourth quarters of this year are driving prices higher.
In the past weeks, Sheikh Ahmed Fahed has repeatedly said the
market continues to be well supplied with crude, but that
psychological factors were a main factor in keeping prices high.
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