OPEC Leader Wavers on Output Hike
CARACAS, Venezuela (AP) _ The president of OPEC gave conflicting signals Thursday about whether the cartel will raise output to reduce soaring petroleum prices, even though the trigger for a supposed automatic hike has been reached.
On Thursday, the 20-day moving average of the Organization of the Petroleum Exporting Countries crude basket broke above the $28 a barrel mark, which should prompt OPEC members to raise their production by a collective 500,000 barrels a day under the price band system put in place by the cartel in March during its annual meeting in Vienna.
OPEC President Ali Rodriguez, who is also Venezuela’s oil minister, said last week the increase would be automatic if prices continue at their current high levels.
But on Thursday, Rodriguez told a local television program that the price band system is ``automatic, but not instantaneous.″ Then he said OPEC would make a ``prudent decision″ based on a determination of whether the current high price of oil is ``temporary or has a more permanent character.″
``We won’t take a decision that will hurt the market,″ he said.
Under the price-band system, OPEC raises production if the oil basket price averages above $28 for 20 consecutive days, and trims output when the basket falls below $22 for 20 consecutive days.
It wasn’t immediately clear when or if the implementation of the price band would be announced, though Rodriguez said he’s been in constant consultation with OPEC ministers.
OPEC ministers are due to meet June 21 in Vienna to review their March decision to raise output by 1.4 million barrels and the price band.