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No OPEC consensus yet on output rise

OPEC President Purnomo Yusgiantoro said on Thursday there was no consensus yet among members to increase the group's official production ceiling as proposed by Saudi Arabia, but Indonesia supported the rise.
/ Source: Reuters

OPEC President Purnomo Yusgiantoro said on Thursday there was no consensus yet among members to increase the group's official production ceiling as proposed by Saudi Arabia, but Indonesia supported the rise.

Saudi Arabia, the world's top exporter, said on Monday the cartel should increase supply limits by at least 1.5 million barrels per day to cool sizzling oil prices at 13-year highs and prevent any derailing of global economic growth.

"I don't know yet. I have sent letters to the members about the Saudi proposal and I haven't received any response yet," Purnomo told reporters when asked whether there was consensus building for a rise to output limits.

"However, from Indonesia's side, we see the proposal as positive. We will support it as long as it stabilizes oil prices," Purnomo, who is also Indonesian oil minister, told a news conference.

U.S. crude closed in New York at $40.77 a barrel on Wednesday, a record settlement since futures were launched in 1983, and just 38 cents off the all-time high of $41.15 struck in October 1990 after Iraq invaded Kuwait.

The Organisation of the Petroleum Exporting Countries, which controls about half of world crude exports, is due to review production policy on June 3 in Beirut.

Four of OPEC's 11 members — Kuwait, United Arab Emirates, Iran and Indonesia — are expected to back the Saudi proposal. Venezuela said on Wednesday there was no need for any supply increase.

"Venezuela's position has not changed. (An output increase) would not be convenient," Venezuelan Energy Minister Rafael Ramirez said during a visit to Argentina.

"The market is sufficiently supplied and, in fact, there is excess supply of 1.5 million barrels."

Purnomo said OPEC members would discuss at a consultative meeting on the sidelines of a producers-consumers conference in Amsterdam later this month, whether a 1.5 million-barrels per day rise would be enough to ease oil prices.

But Purnomo said the status of the Amsterdam talks had not been settled yet.

"We will see there whether all members will attend the meeting. We will discuss there whether to turn the consultative meeting into an emergency meeting," he said.

Prices have continued to soar despite the Saudi call for more oil to be released to the market, as many traders believe there will be little impact in the supply-demand balance since OPEC has been pumping more than two million barrels per day above official limits of 23.5 million barrels per day.

"We have asked OPEC members to produce more to reduce the oil price. We are concerned about the high oil price because high oil prices will cause a recession," Purnomo said.

Robust global economic growth translating into stronger-than-expected demand for oil, low gasoline stocks in the United States and fears that turmoil in the Middle East may disrupt vital oil supplies from the region have boosted prices about 24 percent this year.