OPEC Nations Reject Pleas to Increase Their Quotas

AMSTERDAM, May 22 — The Organization of Petroleum Exporting Countries will make no immediate adjustments to its current quotas, despite Saudi Arabian lobbying to increase production levels to alleviate high prices. Members of OPEC, the oil cartel that controls over a third of the world's production, met on Saturday in Amsterdam to discuss various proposals, but no changes will be decided on before a June 3 meeting in Lebanon, the organization's president, Purnomo Yusgiantoro of Indonesia, told reporters on Saturday. The meeting "was an opportunity to meet and formally exchange views," he said.

Oil prices fell on Thursday and Friday in hopes that OPEC would adopt a Saudi Arabian plan to increase production quotas immediately as an emergency measure to alleviate record-high oil prices of over $41 a barrel.

OPEC is "deeply concerned" about the continued rise in crude oil prices, Mr. Purnomo said, but many factors are contributing to the climb, including varying specifications for emissions in the United States that prevent states from sharing gas supplies, speculation in the futures markets and tension in some oil-producing regions. OPEC is "deliberating on the proposition to increase production" in line with the cartel's commitment to stabilize oil prices, he said.

On Friday, Saudi Arabia's oil minister said in a statement that recent revisions in demand and supply projections for the coming months indicate that OPEC should increase production more than two million barrels a day. The statement came after an earlier Saudi proposal to increase quotas by that amount. OPEC's public unwillingness to adopt emergency measures, despite Saudi Arabia's assertion that more production is necessary, has increased speculation that there is a rift among the 11 members of the cartel. Any changes in OPEC production levels must be make by unanimous decision.

http://www.nytimes.com/2004/05/23/international/middleeast/23OPEC.html

The real reason for the production cut was to screen a new price structure.

Even if the Saudi appeal was not cynical, they do not have the ability to affect price levels against the rest of OPEC. They cannot open their taps much wider. Demand is rising, production falling. New price structure.

at best. They'll make it look like they're helping Bush*, but they won't really. They are looking out for themselves...as they should.

Keo

If successful, gas prices will drop dramatically before the GE.

I'll see if I can find the story.

So I guess Opec's statement doesn't mean much.

I just heard on CNN an hr ago that Saudi Arabia has only agreed to a 600,000 bpd increase, not 2 million.

are making record BILLION dollar profits this year, if they're simply trying to operate on smaller supplies. I mean.. one company made like 30 Billion last quarter!!! Profit! We're being screwed. I don't believe that the world demand just suddenly peaked in the past few months.. just like that. We had these prices a few years ago during Bush's term. I remember paying 2.43 in California in.. I think 2002? It's just the instability and fears that are driving up the oil market shares... just as the 9/11 attack did. It will come down UNLESS the reason everyone in OPEC but Saudi Arabia wants Bush's ass out of the White House this year. Then you'll see the prices stay high.. Bush had that deal with his bestest pal, the Saudi Prince, to bring prices down for the election. What if, after the abuse and humiliation of the Iraqis, the rest of OPEC told the Saudis to screw themselves, that they wouldn't help Bush get re-elected. That is very plausible.

"Saudi Arabia wants Bush's ass out of the White House this year."

With everyone pumping as much as they can and the Saudis with at most only 2M additional barrels a day they could pump that tells you that the traders are driving prices, not the suppliers.

Maybe we ought to send the Saudis a thank you card and some flowers. Bush is toast.

yahoo is reporting that on Monday oil prices started to go down? It is now 8:23pm on Sunday. Are the markets open?

http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=1&u=/nm/20040524/bs_nm/markets_oil_dc