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OPEC
will keep output steady LONDON — OPEC has no plans to pump more oil to replace the crude Iraq is withholding from the market, reasoning that the recent spike in oil prices will ease once violence between Israel and the Palestinians abates, the group’s top official said Wednesday. OPEC Secretary-General Ali Rodriguez defended the decision to keep output steady until at least late June by insisting that global supplies were “normal” in relation to the physical demand for crude. Oil prices seesawed on a day of conflicting market signals. Iran’s oil minister reaffirmed that his country wouldn’t join Iraq in suspending its crude exports unless other Muslim countries also do the same. However, the International Energy Agency warned that political uncertainties in the Middle East and labor strife in Venezuela could yet upset the market. May contracts of North Sea Brent crude rose 22 cents a barrel in London before slipping to $26.10, up 2 cents from Tuesday’s close. In New York, contacts of light, sweet crude for May delivery jumped 48 cents and then eased slightly to $26.15, up 33 cents. “Twenty-six dollar Brent isn’t a terrible, terrible number,” said Peter Gignoux, head of the petroleum desk at Salomon Smith Barney. But he hastened to add, “It’s not a great number.” The big question, Gignoux said, is how quickly other oil producers can replace the crude that Iraq has kept away from markets. Iraqi President Saddam Hussein suspended oil exports on Monday for 30 days or until Israel withdraws from the Palestinian territories. Iraq, which has a daily production capacity of 2.5 million barrels, exports at least 1.8 million barrels a day under the close supervision of the United Nations. Iraq is OPEC’s third-largest producer but doesn’t participate in the group’s production agreements. Iran and Libya had earlier expressed support for the idea of using an embargo as a means of pressuring the United States to lean on Israel to end its military offensive against the Palestinians. |
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