Indonesia supports OPEC's decision to increase oil output quota
Indonesia supports OPEC's decision to increase oil output quota
Leony Aurora, The Jakarta Post, Jakarta
Indonesia will support the Organization of Petroleum Exporting
Countries (OPEC) if the oil cartel decides to raise its output
quota by 500,000 barrels per day (bpd) to 28 million bpd, a top
executive says.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro
said on Monday that OPEC should maintain its current quota and,
if possible, even produce more oil to ease the soaring global oil
prices and meet higher demand in the fourth quarter of the year.
"There have been talks about an increase in the quota by
500,000 bpd," Purnomo said on the sidelines of a joint hearing at
the House of Representatives' building.
"I think (the raise) is a good move."
Ministers from 11 member countries of OPEC will meet at the
organization's headquarters in Vienna on Wednesday to discuss
their production strategy for the rest of the year.
Agence France-Presse news agency has reported that Saudi
Arabia's Oil Minister Ali al-Nouaimi, whose country is the only
one that can still significantly increase production, had said
that it was a foregone conclusion that OPEC would raise its
output by 500,000 bpd.
This prospect was raised last week by OPEC's current
president, Kuwait's Ahmad Fahd al-Sabah.
The group's official production target was boosted from 27
million bpd to 27.5 million bpd in April to help slash the
soaring oil prices.
Purnomo said, however, that this month's possible quota
increase would not alter the state budget. "We have already set
oil prices at US$45 a barrel in the revised state budget," he
said.
Several analysts believe that the planned increase in the
quota will not have a significant impact on the price of crude
oil, which has fluctuated around $50 for the past five months, as
actual production from OPEC member countries are already higher
than the quota.
According to data from Indonesia's chapter of OPEC, the
organization produced 30.4 million bpd in April -- including 2
million bpd output from Iraq, whose production has not been
calculated into OPEC's quota since the Gulf War.
AFP quoted Tony Machacek from Bache Financial as saying, "OPEC
will leave things as they are. They could make a tiny adjustment
to the quota to bring it closer to real output, but there will be
nothing that really moves the market."
New York's main contract, light sweet crude for delivery in
July was down 39 U.S. cents to $53.15 a barrel on Monday from its
close of $53.54 in the United States on Friday.
In London, the price of Brent North Sea crude oil for delivery
in July gained 12 U.S. cents to $52.79 per barrel.