Study: OPEC Must Raise Output To Quench Thirsty Market

By Agence France-Presse With Iraqi oil exports taking longer than expected to recover, the OPEC cartel should raise output to help rebuild very low stocks and rein in prices, a respected energy think-tank urged July 18. A tightening of the oil market has pushed prices back up to the top of the Organization of Petroleum Exporting Countries' target price band of $22 to $28 per barrel, the Center for Global Energy Studies noted. Prices will remain near the top of this band for the rest of the year, unless OPEC kingpin Saudi Arabia pumps more oil to world markets to offset the missing Iraqi oil, the London-based center said in its monthly oil report. "The restoration of Iraq's pre-war production of 2.5 million barrels per day (bpd) now looks remote," it said. "Production at this level was barely sustainable before the conflict and the oil field rehabilitation required to get production back up to this level will take many months." With Iraqi exports taking longer than anticipated to return to market, OPEC delegates should agree to open up the taps when they meet in Vienna on July 31, said the center, founded by former Saudi oil minister Sheikh Ahmed Zaki Yamani. The center estimates that the world needs around 700,000 million barrels per day more oil than was produced in June, when it calculates that OPEC -- excluding Iraq -- produced 25.95 million bpd, against an official quota of 25.4 million bpd. Copyright Agence France-Presse, 2003