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.