“The conference decided to raise the Opec production ceiling, excluding Iraq, by one million barrels per day with effect from November 2004 in order to bring prices down further to a more sustainable level,” Opec spokesman Umar Ibrahim told a news
conference in Vienna on Wednesday.
The decision will raise the ceiling to 27 million barrels daily, still some one million barrels less than actual production, and had little immediate impact on oil prices.
The Organisation of Petroleum Exporting Countries (Opec) would also monitor market movements, the spokesman said.
Surge in prices
A surge in oil prices this year was due to increased demand led by the United States, China and Asian countries, coupled with political unrest and concern about supply, Ibrahim said, adding that speculators had also driven the market higher.
“In taking this decision the organisation reiterated its commitment to take action to stabilise the market…”
“In taking this decision the organisation reiterated its commitment to take action to stabilise the market at prices reasonable to both producers and consumers,” the spokesman said.
In the current climate, Opec decided to hold an extraordinary meeting on 10 December in the Egyptian capital where it would study its price band of $22 to $28 a barrel.
Some members feel the band should be adjusted upwards to better reflect the market reality, which has seen oil skirt around $40 to $45.
Opec will convene for its next regular meeting in Iran on 16 March.
In addition, the cartel elected Kuwaiti Energy Minister Shaikh Ahmad al-Sabah as its next president. He will next year take over the position from Indonesia‘s Purnomo Yusgiantoro.