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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