US Secretary of Energy Bill Richardson and OPEC President and Venezuela's Energy Minister Ali Rodriguez in a joint statement said that they had agreed the need to have stable world oil prices and to increase OPEC production in 500.000 bpd if necessary.
"We have to wait until the end of the month to assess the market. If prices are at $28 or above (for 20 consecutive days), production will increase by 500,000 bpd automatically" the statement said.
Richardson and Rodriguez after a meeting in Caracas Saturday, held an press conference were speaking separately, Richardson speaking in a perfect Spanish, said that the US had "asked the minister to seriously consider the possibility of increasing production in the short term to bolster inventories."
And Venezuela's Energy Minister Ali Rodriguez told reporters, that OPEC will "automatically" release an extra 500,000 bpd onto world oil markets without waiting for a meeting of its members if its price band is tripped".
"We have to wait until the end of the month to assess the market, if prices are at $28 or above (for 20 consecutive days), production will increase by 500,000 bpd automatically," Rodriguez told reporters.
"We are very pleased with the meeting with Minister Ali Rodriguez, we review the whole energy situation and the meeting has resulted in an increase of 500,000 b/d by the end of this month, if after a review at the end of the month it is necessary" Richardson said.
He added, "Prices are too high and the market clearly needs more petroleum, we believe that the right prices are between $22 to $25 a barrel".
Under the price band mechanism, OPEC will increase production by 500,000 b/d if oil reference basket price stays above $28 a barrel for 20 straight days, the reference price stood at $30.52 a barrel on Thursday and if prices stay above the $28, the 20th day would be on Oct. 27.
By Elio Ohep
© 2000 Mena Report (www.menareport.com)