[CrashList] FT.com: Iran backs Saudi on need to raise Opec output
jones118 at lineone.net
Fri Sep 8 01:20:14 MDT 2000
By Carola Hoyos and Stephen Fidler in New York
Published: September 7 2000 19:09GMT | Last Updated: September 8 2000
Mohammed Khatami, Iran's president, said on Thursday Iran would support a
rise in oil production by Opec, the oil cartel, when its members meet in
Vienna this weekend.
But a production increase of 700,000 b/d rumoured to be backed by Saudi
Arabia, may be "on the high side for Iran", according to a close adviser to
"In principle we are not against an output rise in proportion to the rise in
global demand in oil," Mr Khatami said, adding that statistics forecast oil
demand to increase in the next four months.
Crown Prince Abdullah of Saudi Arabia this week told President Bill Clinton
that he expected Opec to agree to a rise in output.
The increase in world oil prices - October Brent blend closed on Wednesday
at another 10-year-high of 34.28 a barrel - dipped to $33.89 on news of the
apparent Saudi proposal.
Although the cartel seems to be moving to a consensus over the need for an
output increase, the size of the increase will be hotly debated in the
Venezuela, one of the US's biggest suppliers of crude oil, and a country
whose economy is highly dependent on the price of oil, does not expect any
decision by Opec this weekend to stabilise the price.
Hector Ciavaldini, president of PDVSA, Venezuela's state oil company, said
in an interview on Thursday that he expected Opec to agree a token increase
but that the measure would be unlikely reduce prices below $30 per barrel.
Oil inventories will not increase before November and December, when demand
will increase due to rising heating oil consumption, he said. He admitted
that the US has put extreme pressure on Venezuela to increase output, but
said that Opec was not responsible for the upward trend.
Instead, he echoed comments also made by Ali Naimi, Saudi Arabia's oil
minister, and Mr Khatami, that oil consuming countries must reconsider their
taxes and the environmental standards they dictate for their gasoline.
Mr Clinton met Crown Prince Abdullah this week to push for Opec to increase
oil output. "I told him that I was very concerned that the price of oil was
too high, not just for America, but for the world, that if it's a cause of
recession in any part of the world, that would hurt the oil producing
countries. He agreed with that," Mr Clinton said after the meeting.
Earlier, the Saudi crown prince stressed that his country was doing all it
can to stabilise prices. "Saudi Arabia will continue to make every effort to
ensure equilibrium in the oil markets and to stabilise prices," he said.
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