VIENNA -- OPEC is committed to keeping crude prices from rising further, and its members are investing to boost their production capacity to help stabilize a turbulent oil market, the group's president said yesterday.
The Organization of Petroleum Exporting Countries is already pumping 2 million barrels a day above its output target of 25.5 million barrels, Purnomo Yusgiantoro told a news conference at OPEC's headquarters in Vienna. "That's partly because we are concerned with the price level that we see today," he said.
Contracts of US light crude for September delivery climbed 78 cents to settle at $41.36 a barrel yesterday on the New York Mercantile Exchange.
OPEC's official target price for its benchmark blend of crudes remains between $22 and $28 per barrel -- a level that Purnomo reconfirmed.
The director of OPEC's research division, Adnan Shihab-Eldin, predicted some relief for US motorists, saying a recent recovery in the balance of supply and demand for gasoline in the United States should help "moderate" prices there.
Purnomo said a robust demand for oil imports from China, geopolitical tensions, and refining bottlenecks in major importing countries have fanned "unwarranted fears" about possible crude shortages. To help calm a nervous and sensitive market, OPEC members are investing in their oil fields and facilities to add 2.5 million to 3.5 million barrels of daily production capacity by the end of 2005, he said.
However, Shihab-Eldin later clarified that the net increase in spare capacity would only be half as large as Purnomo indicated.
Shihab-Eldin said OPEC members would add 1 million to 1.5 million barrels to their current spare capacity by the end of next year, for a new aggregate surplus of between 2.5 million and 3.5 million barrels.