Newspaper article The Florida Times Union

OPEC Delays Hike in Production until January Meeting Members Reject Price-Trigger Plan

Newspaper article The Florida Times Union

OPEC Delays Hike in Production until January Meeting Members Reject Price-Trigger Plan

Article excerpt

VIENNA, Austria -- OPEC will hold oil production steady until cartel members meet again in January to assess crude prices, Kuwait's oil minister said yesterday, offering little hope of relief for consumers buffeted by soaring oil prices.

Sheik Saud Nasser al-Sabah of Kuwait made the announcement after an informal meeting of the Organization of Petroleum Exporting Countries, whose every word and action is scrutinized over how it will affect the price of crude, which is hovering near 10-year highs.

OPEC ministers said they will meet again Jan. 17 to examine oil prices and possibly talk about a production cut. Yesterday's decisions still need to be approved by member countries at a meeting this morning.

Also yesterday, members of the oil cartel seemed to back away from a March agreement whereby production increases and decreases would be triggered automatically using a price-sensitive formula.

While OPEC still seeks to keep prices for its basket of crudes between $22 and $28 a barrel, Saudi Oil Minister Ali Naimi said production increases would be decided by ministers, not necessarily by the formula -- the so-called price-band mechanism. That formula requires OPEC to add 500,000 barrels to its daily production if the average price for OPEC crude exceeds $28 for 20 consecutive trading days.

"The price band mechanism is still in place but it doesn't replace good judgment," Naimi said.

OPEC has already boosted output four times this year, bringing an extra 3.7 million barrels a day into the market. The cartel worries that another boost right now could swamp the market and cause prices to suddenly plummet if demand subsides as expected in the spring.

At yesterday's informal session, OPEC ministers also said they would name Venezuelan Oil Minister Ali Rodriguez the cartel's next secretary-general. …

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