OPEC elects Sheikh Ahmad al-Sabah as a President, increase oil production by one million barrels daily
Regional, Economics, 9/16/2004

OPEC has extended a message to calm down to the oil consuming countries following an agreement by its countries in Vienna to increase the ceiling of oil production by 4%, which means an increase of one million barrels a day, in the hope to reduce prices.

The Algerian oil minister Shakib Khalil said in conclusion of an unofficial meeting for the ministers "we have decided to increase the ceiling of production at one million barrel as from the beginning of November" so as to increase total production to 27 million barrels daily.

OPEC chairman Burnomo Yusijia Ntoro said that "the message we want to send to the market is that prices should be reduced because we consider it as very high." With raising the ceiling of its production, OPEC hopes to restore back the average price of "its basket" which includes seven world crude oil from $ 38 to 30 for one barrel, as he indicated.

Iran's minister of oil Beijan Nimdar Zinqanah said "it is jut a remark to the market, not more." He continued "we have not noticed any change in the total production in OPEC. We do consider that the market does not suffer oil shortage."

The Saudi minister of oil Ali al-Nueimi that the countries of the region chose by the ultimate end the middle solution "in order to reach a consensus." He added that increasing the ceiling of production one million barrels daily " aims at minimizing the difference between (official) shares and actual production" noting simultaneously, that oil prices are very high but "OPEC has not lost control " on the situation.

The Iranian minister said that "today we have adopted officially half of the increase in the production," recalling that "OPEC pumps two million barrels over the official ceiling of production." Market reaction was calm, coupled with the announcement about this increase. Price of Brent oil in London receded three cents to $ 41.76 after it was opened at $ 42. The same in New York where the price of one barrel of oil decreased by 3 cents to $ 44.36. Al-Nueimi said that the organization will not change immediately the margin of its oil price set since 2000 to be between $ 22 and 28 for one barrel.

In its first reaction to OPEC decision, the spokesman for the White house Trent Dafi said:" we do expect that the producers will take measures that will not be damaging for the American economy nor to the world economy." he added " we do also expect producers to honor their earlier commitments." On the other hand, the Kuwaiti minister of oil and energy Sheikh Fahd al-Sabah was elected a new president for the organization in conclusion of its 132 meeting in succession of Lio Sejia Ntouro. Al- Nueimi will assume his post as from next year. Sheik Ahmad said that OPEC's unordinary next meeting will be held in Cairo on December 10, noting that the main objective of the organization was to send a message of good intention that it works seriously to maintain price stability. N.

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