OPEC president says to propose 500,000 b/d increase in ceiling

Kuwait City (Platts)--29Aug2005

OPEC President Sheikh Ahmed Fahed al-Sabah Monday reiterated the producer
group's concern over high oil prices and said he would propose that OPEC
increase its output ceiling, currently at 28-mil b/d, by 500,000 b/d and an
additional 500,000 b/d increase in actual supply.
     Sheikh Ahmed, who is also the Kuwaiti oil minister, was asked by
reporters if he was considering calling for an output hike at the next
ministerial meeting in Vienna Sep 19. "We will try in the next meeting to
increase our production because the fourth quarter will need more supply. But
also, I think it's the right time to refresh our dialogue with the main
consumers to see what we should do."
     Pressed further as to whether this would be an increase in supply or the
ceiling, he replied: "Yes, we will have to increase both, supply and the
ceiling." Asked to explain if this proposed increase referred to a 500,000 b/d
which he has the authority to order witout a meeting of ministers. "Yes the
final 500,000 b/d that was in the hand of the president and also to authorize
the president for something more to increase the production."
     He explained that of the proposed total increase of 1-mil b/d, 500,000
b/d were already in the market and the remainder would represent actual
supply. "I thinki 500,000 b/d will be in the market. 500,000 for the ceiling
and 500,000 for the real production," said Sheikh Ahmed. 
     Sheikh Fahd is basically proposing that OPEC legitimize half a million
barrels per day of overproduction and put an additional 500,000 b/d on
markets.
     He said the group was producing over 30.4-mil b/d, inclulding Iraq.
Taking away some 2-mil for Iraq, the total output of the ten OPEC members
bound by quotas would stand at 28.4-mil b/d.
     A Platts survey of OPEC production in July showed the OPEC-10 produced
28.3-mil b/d.

For more information, take a trial to Platts Oilgram News at
http://oilgramnews.platts.com.

Please visit: www.platts.com

Their coverage of energy matters is extensive!!.