US Energy Secretary Bill Richardson on October 21st met with OPEC President and Venezuelan Oil Minister Ali Rodriguez in Caracas to discuss high oil prices. Richardson jubilantly told reporters following the meeting that: “We are very pleased... because the meeting has resulted in an increase of 500,000 b/d by the end of this month.”
Rodriguez said at a later press conference that the US “has suggested it is necessary to raise production, but we have a commitment within OPEC: firstly, to take decisions unanimously and secondly, as a result, to implement our price band mechanism faithfully.”
Under the mechanism, if the price of OPEC’s basket of cruds reaches over $28 per barrel for 20 consecutive days, a 500,000 b/d increase will be automatically triggered. If prices stay at their current levels, the 20th day will fall on October 27th.
Sources within the cartel have suggested that OPEC will wait to increase output until its November 12th meeting in Vienna. Saudi Arabia, Algeria, Venezuela and Nigeria are said to be in favor of increasing production if the mechanism is triggered, while Kuwait, Iran and Qatar are not.
Iranian President Mohammed Khatami said on October 22nd that he would like to see stable oil prices to benefit both producers and consumers. Khatami said that: “The interests of oil producing and consuming countries can’t be considered in isolation and must be viewed together so that none of the two parties incur damage. We hope that the markets will reach a stability which will serve the benefits of both sides.” (oilnavigator)