OPEC seeks $28 target

May 23, 2001
Web posted at: 1312 GMT

LONDON (CNN) -- OPEC has no interest in the basket price of its crude rising above $28 a barrel, the organization's chief said in an interview on Wednesday.

OPEC Secretary-General Ali Rodriguez Araque told the online edition of the  Financial Times in an interview that Opec would "act as necessary to maintain stability."

In an attempt to damp down concern about a surge in oil prices in the fourth quarter, Rodriguez said the oil producers would keep average prices for the seven-crude OPEC basket in the $22 to $28 a barrel range.

He said he believed there was a consensus among members to maintain the current production ceiling of 24.2 million barrels a day when they meet in Vienna early next month.

The average price of the OPEC basket last week was $26.05 a barrel and stands at $24.58 for the year to date, the report said.

The ceiling excluded Iraqi exports, which are controlled by United Nations sanctions.

Commenting on the plans of President George W. Bush, unveiled last week, to boost domestic oil production,  Rodriguez said a U.S. policy of reducing import dependence was more realistic than those of the Nixon administration in the mid-1970s, which proposed to eliminate imports.      

Some oil market analysts argue that OPEC needs to raise output from July to pre-empt a tightening of supplies and prevent prices spiraling towards the end of the year.

But Rodriguez said the organization had the ability to bring spare capacity onstream when needed to maintain market stability.

Global oil demand – at 76.7million barrels a day in the first quarter -- is rising at a slower rate than forecast and non-OPEC production is set to increase.

Rodriguez told the FT he was unconcerned about OPEC losing part of its current 40 per cent market share.

Discipline among the 10 OPEC members was good, with compliance with quotas standing at 95 per cent, the secretary general was quoted as saying.

This meant the June meeting was unlikely to be marred by accusations of cheating that complicated gatherings before the price crash of 1997.

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