OPEC hopes US will release more SPR crude to cool prices: Purnomo
Bali (Platts)--5Oct2004
OPEC hopes the US will release more crude from its Strategic Petroleum Reserve in an effort to cool down oil prices, which have been driven up in part by prolonged hurricane-related production shut-ins in fields in the Gulf of Mexico, the cartel's president, Purnomo Yusgiantoro, said in Bali Tuesday. OPEC expects President George W Bush to follow "populist policies" aimed at lowering oil prices ahead of the Nov 2 presidential elections, Purnomo told reporters. The US has so far released 4.2-mil bbl of SPR crude to four refiners--Shell, ConocoPhillips, Placid and Astra--to counter supply shortages and disruptions caused by Hurricane Ivan in the US Gulf. "I hope George Bush will follow populist policies to stabilize oil prices...I just hope US will release its SPR [oil] again, I also hope US oil production will recover in the near future," Purnomo said. The OPEC president is in Bali for a two-day meeting between officials of the International Energy Agency and OPEC member countries to discuss exchange of data on oil supply and demand. Purnomo also said he expected Iraq's oil production to reach 2.8-mil b/d within this year, which could help stabilize oil prices. Iraqi output reached 2.643-mil b/d at the end of September following a steady rise through the month, but saboteurs blew up a key export pipeline in the south again Monday. OPEC kingpin Saudi Arabia last week pledged to inject more supplies into the market and to boost its capacity by 500,000 b/d to 11-mil b/d, in an effort to cool markets after prices rocketed up to new highs on the back of rebel violence in Nigeria's oil-producing Delta region. Purnomo also said last week that OPEC would look to build 3- to 4-mil b/d of spare capacity by 2005. Benchmark US light, sweet crude West Texas Intermediate closed at $49.91/bbl in New York Monday, but had climbed well above the $50/bbl mark in after-hours NYMEX Access trade during Asian hours Tuesday on the back of fund-buying rather than any fresh bullish news, traders said.
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