Newspaper article THE JOURNAL RECORD

OPEC Output Increases; Demand Expected to Rise

Newspaper article THE JOURNAL RECORD

OPEC Output Increases; Demand Expected to Rise

Article excerpt

BRUSSELS, Belgium (AP) _ Five members of the Organization of Petroleum Exporting Countries raised oil production last month to push the cartel more than a half million barrels a day over its selfposed output ceiling, according to estimates released Wednesday.

But analysts predicted demand for OPEC crude would increase in the coming months, sopping up any extra oil on the market.

A report by the International Energy Agency said the 13-nation cartel pumped an estimated 24 million barrels of oil a day in July, up 200,000 barrels from June.

The surge boosted production above OPEC's ceiling of about 23.4 million barrels a day set for the Julyptember quarter.

But analysts said demand for OPEC oil remained strong as Western companies bought crude to replenish stocks for the coming winter.

"I don't think it's anything to worry about in terms of supply," said John Lichtblau, chairman of the Petroleum Industry Research Foundation in New York. "They'll have to go higher than that in the fourth quarter."

"The market can handle it _ 24 million barrels a day is not a bad number," said Peter Gignoux, manager of the petroleum desk at Smith Barney, Harris Upham in London.

Prices have strengthened in recent months, with an OPEC marker flirting with the $21 a barrel target set by the cartel.

The average price of a basket of various crudes monitored by the cartel was $19.84 a barrel last week, up a bit from the previous week.

The energy agency reported oil production in the former Soviet republics appeared to have slipped to 9.1 million barrels a day in June. Pumping in the Januaryrch period was about 9.5 million barrels a day.

The Soviet Union was the world's largest oil producer, lifting more than 12 million barrels a day a few years ago. Political turmoil and poor maintenance of the oil industry have reduced output.

OPEC oil ministers meet next month to plot strategy for the Octobercember quarter, when demand for their crude is expected to rise to nearly 26 million barrels a day. …

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