Iraq warns against "rapid deterioration" in oil prices
Iraq on Wednesday warned OPEC against raising production, saying it would bring down prices by leading consumers to replenish their stocks of oil.
"We, as an OPEC member, are worried about the skyrocketing increase in the levels of crude, (as) figures from the International Energy Agency do not reflect the increase in production, which shows that crude is well-stocked," Oil Minister Amer Mohamed Rashid told a press conference.
"This inventory will therefore be used to put pressure on producers, causing a catastrophe and a rapid deterioration in prices in the short term," he added.
Rashid spoke just before Venezuelan Energy Minister Ali Rodriguez, the president of the Organization of Petroleum Exporting Countries, announced that the cartel was ready to produce another two million barrels of oil a day in the short term if necessary.
"We are not against a reasonable and profitable price," Rashid said, "but we are opposed to any fluctuation in level. We are in favor of a gradual and stable hike that guarantees decent revenue for producers."
Rashid said that most OPEC countries, with the exception of Saudi Arabia, were expecting a rapid decrease in prices by March as consumers replenish their stocks of oil.
Asked about US President Bill Clinton's threat to tap into the country's strategic oil reserves, Rashid said: "It would show a very narrow vision on the part of the American administration."
"That would give clear indications to speculators on the oil market that the situation had become catastrophic, which would draw into question the American administration's behavior," he said.
Rashid said Iraq was producing about three million barrels of oil a day, but would like to add up to 400,000 barrels more to its daily output. He blamed the failure to expand production on "delays in the arrival of spare parts."
Iraq's oil installations were crippled during the 1991 Gulf War and need repairs. Any new equipment would need to be bought through the UN-sponsored oil-for-food program launched in 1996 to alleviate the effects of the embargo on the country.
Iraq has said in the past that it would like to increase its OPEC quota from 3.14 million barrels a day to six million. The country is known to sit on 112 billion barrels of oil, but Rashid said actual reserves if developed could be twice that. –AFP
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