Sudjana calls on OPEC to meet over oil prices
JAKARTA (JP): Minister of Mines and Energy I.B. Sudjana, who is also the president of the Organization of Petroleum Exporting Countries (OPEC), has called for an emergency OPEC meeting to address decreasing oil prices.
"I have told the OPEC secretary-general (Rilwanu Lukman) to contact OPEC ministers to see whether they will agree to gather for an extraordinary meeting," said Sudjana after a meeting with President Soeharto yesterday.
Sudjana called for the meeting following a drop in oil prices this week.
World benchmark Brent crude oil traded at $13.73 per barrel on London's International Petroleum Exchange on Tuesday, the lowest level since April 1994, depressed by lower-than-expected demand, the end of the UN standoff with Iraq and the prospect of higher Iraqi exports under an enlarged oil-for-food deal.
A call from the OPEC President for an emergency meeting of the oil producers' cartel boosted oil prices on Thursday.
Traders anticipating action by OPEC to cut overproduction pushed up the price of international benchmark Brent blend by 41 cents to $14.32 a barrel in early trade in London.
The United Nations has allowed Iraq to raise its oil export to 1.5 million barrels per day (bpd) under its oil for food program.
An export quota set for Iraq by the United Nations following the 1991 Gulf War had allowed Iraq to export 600,000 bpd until now.
The market feels there will be an oversupply of oil, Sudjana said.
"I must take the initiative on this because of the oil price drop. We should think together about the market developments. If they (OPEC ministers) want to meet, we will look for a solution," Sudjana said.
Some oil analysts blame the oversupply on OPEC which decided to raise its production ceiling to 27.5 million bpd from 25.03 bpd during its ministerial meeting last November in Jakarta.
But Sudjana said OPEC's current production ceiling was not too high.
"It is not (too high), because OPEC production was already at that level (before OPEC's Jakarta meeting)," he said, adding that the weak oil price was because of lower demand.
Sudjana said if OPEC ministers agreed to meet, the conference would be held in Vienna after Indonesia's presidential election next month.
The People's Consultative Assembly will meet to hold presidential and vice presidential elections from March 1 to March 11.
Lukman said in Vienna that he had contacted all OPEC members to discuss ways of responding to the recent sharp oil price drop and an emergency meeting has not been ruled out.
"He is in permanent consultations with all (OPEC) ministers to decide what to do. The question of an emergency meeting is always open," said an OPEC source." (jsk/prb)