OPEC chief says oil output cut will remain

NUSA DUA, Bali (JP): Secretary-general of the Organization of Petroleum Exporting Countries (OPEC) Rilwanu Lukman said on Tuesday the organization would maintain its current production cuts in an upcoming meeting in Vienna in order to keep oil prices high.

"We want to maintain these prices a little longer before (we) start jumping to conclusions," Lukman said.

He said that even though oil prices were on the increase over the past couple of months, the average US$15 per barrel for the year was still below expectations of OPEC members.

"The average of this year, even if the prices continue at this level, is still below what we expected," he said.

Lukman did not give details on both how long OPEC intended to maintain the high prices and at what level oil prices were considered ideal by OPEC`s members.

"People expected us to name a figure, but we don't want to, because that's not the point," he said.

Oil prices as measured by the Benchmark Brent crude plunged to below $10 in late 1998 before soaring to a 22-month high of $21.48 last Wednesday.

Rilwanu said the ideal price level was one which made producing oil worthwhile without creating too much inflation.

"We don't want to name a price, but the price in the twenties (dollars per barrel) is reasonable and fair both for the consumers and producers," he said on the sidelines of the Indonesian International Oil and Gas Exhibition and Conference (IIOGE).

The IIOGE, which opened on Tuesday, will last until Friday.

OPEC will hold its ministerial meeting on Sept. 22.

OPEC and non-OPEC members agreed to cut oil output by 2,104 million barrels per day in March this year to lift oil prices, which were suppressed amid the global economic downturn following the Asian economic crisis.

Under the production cut agreement, Indonesia agreed to cut output from about 1.5 million bpd to 1.187 million bpd.

The price of oil has doubled to over $20 per barrel over the past several weeks thanks to the output cut policy and the adherence of OPEC's members.

The International Energy Agency recently reported that the adherence of OPEC members to the output cut was 80 percent.

OPEC consists of Algeria, Indonesia, Iran, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. (jsk/50)