Kuwait’s Oil Minister Shaikh Saud Nasser Al Sabah yesterday ruled out any increase in crude oil production outside the Opec price band mechanism.
“There will be no hike in crude output except through the Opec’s price band mechanism upon which all member states have agreed,” Shaikh Saud said, quoted by Al Anba newspaper.
The Opec price band mechanism, agreed at the cartel’s March meeting, provides for an automatic output increase if the price of a basket of Opec crudes remains above $28 or below $22 a barrel for 20 consecutive working days.
The current price of the basket has remained above $28 only since the start of the week, meaning that an increase could not be triggered before Opec’s ministerial conference scheduled for September 10 in Vienna.
Oil prices on Friday spiked to well over $32 a barrel on both sides of the Atlantic and climbed to 10-year-high levels in London, as US stock levels remained around 24-year lows.
An economic report published here, meanwhile, said Kuwait had sold crude oil at an average $26 a barrel in the first 41 days of the 2000/2001 fiscal year which began July 1, double the price adopted in calculating budgetary oil revenues.
Al-Shall Economic Consultants said the price of the emirate’s crude sold at between $24.52 and $27.48 a barrel from July 1 to August 10.
The current fiscal year in Kuwait has been shortened to nine months due to changing the July-June year to April-March. The current fiscal year will end March 31, 2001 and the next year will begin April 1. Based on a conservative price of $13 a barrel and a daily output of 1.98 million barrels, Kuwait has estimated oil revenues in the next nine months at 1.927 billion dinars ($6.32 billion).
Analysts expect actual revenues to be at least twice as much, especially that the emirate’s Opec quota has been increased to 2.037 millions barrels per day. –AFP
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