OPEC Seeks Stabilization in Oil Market

Published June 7th, 2000 - 02:00 GMT

Oil producers' consortium OPEC may pump more oil into the market if the price remains high, its secretary general Rilwanu Lukman said, quoted by a BBC.online report Wednesday.  

Speaking on BBC Radio, Lukman insisted that its plan to bring down oil prices was working.  

In March, OPEC, which controls 40% of the world's production, increased its output of oil in a bid to bring down the price.  

It did drop from its high of $35 per barrel to about $23, but it has now gone back up to $28, a level which OPEC is happy with but which worries consumers.  

OPEC will meet again on 21 June, as speculation grows that it will increase production.  

Change in demand  

"It is still about $5 or $6 lower than it was at its height," OPEC secretary general Rilwanu Lukman said.  

"It has worked in that it has brought it down from the very high levels to reasonable levels."  

He told BBC Radio 4's Today program that prices were usually weaker at this time of year and that OPEC would need to assess if there had been a fundamental change in demand.  

"What we are looking at is the fundamentals, why are prices rising the way they are now," he said.  

"You don't act because the price has gone up to that level for just a couple of days. You want to see a prolonged sustaining of that level and then you know it is for real and you have to do something," he added.  

According to BBC.online, the oil price had tumbled more than 2% on Monday amidst conflicting statements from OPEC ministers.  

Saudi oil minister Ali al-Naimi was quoted as saying that an increase in supply would not bring down oil prices in the US.  

He later said that OPEC would be ready to increase supply if signs emerged that demand had changed.  

The increased demand for oil is thought to have been prompted by legislation in the US, said the BBC report.  

A new law in the US calls for a third of cities to make a cleaner burning gasoline available.  

OPEC took action to cut production last year after the price of a barrel slumped to $10 – Albawaba.com  


© 2000 Al Bawaba (www.albawaba.com)

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