OPEC's president says the organisation's production levels are increasing to meet escalating demand, but he believes over-inflated prices can be brought down only by resolving global conflicts.
Speaking in Indonesia, Purnomo Yusgiantoro said production by the OPEC 10 - all members excluding Iraq - was nearing the 30 million barrels per day (bpd) mark, with up to another one million on standby and plans for further capacity increases within the next 18 months.
But for prices to stabilise 'there must be a significant reduction in geopolitical tensions,' Yusgiantoro said. He did not specify which tensions he was referring but his comments came after a weekend attack on an oil pipeline in southern Iraq helped raise prices in Asian trade overnight.
Yusgiantoro, who has said any decisions over extending capacity and quotas will not be taken until a September 14 OPEC meeting in Vienna, added that the organisation was willing to take suggestions on easing the troubled oil market.
U.S. oil prices fell below $43 today and US light crude fell 58 cents to $42.60 a barrel, nearly $7 below a record high earlier this month. Brent crude trade on London's International Petroleum Exchange was shut for a public holiday.
Despite last week's slide, prices are still 33% higher than at the end of 2003 as producers pump close to full tilt to match soaring demand.
Iraqi oil exports ran at a reduced 1.4m bpd today, compared with 2m bpd last week, and an Iraqi oil official said work to repair recently sabotaged pipelines would take five days.
