OPEC to Open Oil Taps Wide
The OPEC oil cartel will pump oil almost flat out for the rest of the year, abandoning individual output quotas to meet expected strong demand this winter, oil ministers said Wednesday.
Unable to agree on how to treat production by Iraq and Kuwait, the Organization of Petroleum Exporting Countries instead set a total fourth-quarter output level of 23.65 million barrels per day, several ministers said.
They also reaffirmed their commitment to a target price of $21 a barrel and said they were optimistic they would reach it soon.
“OPEC believes 23.65 million (barrels a day) will guide the price to $21,” Iranian Oil Minister Gholamreza Aghazadeh said.
The price of OPEC’s basket of seven crudes has recently risen above $19 a barrel in a market nervous about dwindling Soviet supplies. It hit $19.47 a barrel Wednesday.
OPEC’s agreement to raise its output ceiling from its current 22.3 billion barrels a day was widely expected. Actual OPEC output in August was pegged at 23.57 million barrels a day, according to a Reuter survey.
Analysts and traders said the higher ceiling bodes neutral to bearish for oil prices.
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