Indonesia wants OPEC to maintain current production level

Sandy Darmosumarto, The Jakarta Post, Jakarta

Minister of Mineral Resources and Energy Purnomo Yusgiantoro wants the Organization of Petroleum Exporting Countries (OPEC) to maintain its current output level of 24.5 million barrels per day (bpd), as prices remain uncertain.

He said although oil prices would continue to rise until the beginning of next year amid rising demand from developed countries, many OPEC members were concerned about Russia's intention to boost oil production to 8 million bpd.

"Therefore, it would be better to retain this level as the status quo, not raising nor lowering prices, until we observe developments in January 2004," Purnomo told reporters. Purnomo will become the president of OPEC in January.

OPEC is to hold a ministerial meeting on Thursday in Vienna, and many analysts expect the current production ceiling to be maintained.

"According to OPEC's estimation, a supply deficit will still occur in January and February of next year, when developed nations are expected to be supplementing their oil stocks," said Purnomo.

"We expect to experience a drop in demand of up to 2.5 million barrels per day during the spring (of 2004), a correction of a previous statement when I indicated a reduction of up to 2 million barrels per day," he said.

OPEC has also been under pressure to maintain the cartel's production ceiling, because any further cuts in production will imperil the sustained growth of the world economies, particularly those of oil-importing countries.

Purnomo said OPEC was maintaining a price of US$22-$28 per barrel.

The 11 OPEC members are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. The group supplies about a third of the world's crude oil.

Meanwhile, oil prices nudged back up marginally on Tuesday in the wake of the previous day's falls, with trade quiet ahead of a meeting of industry cartel OPEC which is expected to usher in no changes of note.

The price of reference Brent North Sea crude oil for January delivery was up eight cents to US$28.33 per barrel in morning trade.

New York's reference light sweet crude January contract rose 10 cents to $30.05 in out-of-hours electronic deals.