Sudjana estimates upsurge in oil prices will continue

JAKARTA (JP): Oil prices, which have been increasing this year, are expected to continue rising due to better compliance by OPEC members with their output quotas, a minister says.

Production by the 12 members of the Organization of the Petroleum Exporting Countries (OPEC) does not exceed their total ceiling of 24.52 million barrels per day (bpd), Minister of Mines and Energy I.B. Sudjana told reporters here yesterday after swearing in new members for the supervisory board of the oil and gas technology research and development center (Lemigas).

He said OPEC members are committed to not raising their production ceiling until the end of the year.

The price of Indonesia's benchmark oil, Minas, increased to US$15.90 per barrel early this week from about $13 a few months ago.

Meanwhile, London July futures for the world benchmark Brent Blend were trading at $16.48 per barrel, as compared to some $13 six months ago.

Sudjana said oil prices are expected to continue increasing because OPEC, in its ministerial meeting in Vienna on Wednesday, will likely maintain its production ceiling, while demand for OPEC oil is estimated to exceed 26 million bpd.

Sudjana added that one of the important issues to be discussed at the Vienna meeting is the replacement of OPEC Secretary General Subroto, who has held the post for two periods.

"There are two candidates now being promoted for the post, including the ministers for oil affairs of Venezuela and Iran," he said.

At yesterday's inauguration ceremony, Sudjana reappointed Suyitno Patmosukismo, who is also director general for oil and gas, as chairman of Lemigas's supervisory board and Bambang Triadji as a member. Sudjana also appointed Widartomo Wirjatmodjo, Luluk Sumiarso and Roefaiki Djajadiningrat as members of the board. (fhp/imn)