The OPEC cartel decided Thursday to boost its crude oil output ceiling to cool down prices.
At the end of an extraordinary meeting in the Lebanese capital, the Organisation of Petroleum Exporting Countries said it will raise its oil output ceiling by 2.5 million barrels per day in two stages by August 1.
Delegates said the pact was a compromise between Saudi Arabia and states like Iran and Venezuela which feared a Saudi proposal for an immediate 2.5 million increase could trigger a big price collapse.
The final statement of the meeting said OPEC will raise its production ceiling, which excludes the output of Iraq, to "25.5 million barrels per day with effect from July 1 and to 26 million BPD with effect from August 1."
The decision aims to "ensure adequate supply and give a clear signal of OPEC's commitment to market stability," added OPEC, which controls one third of the global oil supply. OPEC said an "extraordinary meeting" will be held at its headquarters in Vienna on July 21 "to review market developments.
“It will send a very, very strong signal to the market,” said Saudi Minister of Petroleum and Mineral Resources Ali Al-Naimi. He said the extra August increment was not negotiable on the downside and could even be altered higher.
“It’s a good agreement, we will be able to test the impact of the policy on the oil market before we meet again in July,” said Qatar Oil Minister Abdullah Al-Attiyah.
© 2004 Mena Report (www.menareport.com)
