OPEC to invite non-members to end crisis

OPEC to invite non-members to end crisis

Agence France-Presse, Jakarta

OPEC is to invite producers from outside the cartel to talks next month on how to stabilize sky-rocketing oil prices, the organization's President Purnomo Yusgiantoro said here on Monday.

The unusual move to throw open the Sept. 14 OPEC meeting in Vienna to non-members comes just days after crude prices hit record highs, reaching US$44.77 a barrel in New York on Friday.

"OPEC will discuss steps to stabilize world oil prices with non-OPEC countries and large oil producers, among them Russia and Angola," Purnomo told journalists here.

"We will discuss world oil price conditions," he said.

Supply uncertainties caused by the financial woes of Russian oil giant Yukos and terrorist attacks on Iraqi oil pipelines have sent prices soaring in recent weeks, prompting OPEC to consider a hike in production.

But Purnomo, who last week branded oil prices "crazy", has said a decision whether to increase supplies by around 1.5 million barrels per day cannot be made before the Vienna talks.

He said there were no plans to bring the meeting forward, despite concerns over OPEC's ability and willingness to control the market.

Meanwhile, world oil markets took a slight breather on Monday following the previous week's record highs on hopes of an increase in official OPEC production quotas and a mooted rescue for Russian energy giant Yukos.

Brent North Sea crude oil for September delivery, which shot to a new high of $41.50 per barrel during on Friday, traded at $40.31, 32 cents down on last week's closing price.

New York's light, sweet crude for delivery September, which hit its own record of $44.77 per barrel on Friday, was 35 cents lower at $43.60 in out-of-hours electronic deals.

"Oil prices are a little bit lower today. They are not looking massively bearish but perhaps could slip a little bit further," said GNI-Man Financial trader Paul Goodhew.

"The main reason is the latest news... from the OPEC president saying that the group may consider raising its output limit to actual production levels, which are predicted to be around 30 million barrels a day at the moment (including Iraq)," he said.

Another factor pushing prices lower was prospects of a rescue package for stricken oil giant Yukos, which faces possible bankruptcy due to a massive tax demand from Russian tax authorities, threatening to interrupt oil deliveries.

According to Britain's Sunday Times newspaper, a consortium of Dubai-based investors was backing a $10-billion (8.1-billion- euro) rescue plan for Yukos.

This was likely to be more significant than any OPEC moves, said Commerzbank analyst David Thomas.

Moves to push OPEC ceilings to match production was "all very laudable, but it doesn't actually mean any more barrels on the water", he noted.

"So I think the market ought to pretty well ignore that, and the price move today will be more on news about Yukos."