September 20, 2002	Friday	Rajab 12, 1423

OSAKA, Sept 19: The Opec oil cartel announced on Thursday that oil production would remain unchanged, but an extraordinary meeting had been called for December to reassess the Middle East political situation.

The Organization of Petroleum Exporting Countries issued a communique saying production output for the last quarter of 2002 would remain unchanged at 21.7 million barrels of oil per day, aimed at maintaining a targeted price range of 22 to 28 US dollars a barrel.

“The price band is still there, we have not abolished it, but we are not slaves to it either,” Opec president Rilwanu Lukman said.

He said the cartel could adjust the price and production as it saw fit and he estimated a war premium of three to four dollars per barrel had been factored in after oil broke through the 30-dollar mark in August.

“The threat of attack on Iraq did put extra dollars on the barrel,” he said, adding there was no shortage of oil in the market place.

He said the price had been moving partially for non-fundamental reasons including the “current tension in the Middle East and the Iraqi factor,” and that nothing was the same since the September 11 attacks.

But he noted oil prices had dropped by 1.50 dollars after Baghdad agreed Tuesday to allow UN weapons inspectors unconditional access to Iraq amid threats of war from the United States.

Opec had come under intense pressure to increase production and rein in prices to shore-up flagging global economies after oil rose above 30 dollars a barrel in August amid fears of a US-led war against Iraq. The threats have not evaporated.

US President George W. Bush has warned the United Nations not to be “fooled” by Baghdad’s offer and is drafting a resolution for the US Congress authorizing action against Iraq.

Saudi Arabia, which with the world’s largest oil reserves dominates Opec, had been pushing for increased production to ease price pressures ahead of the northern hemisphere winter.

The move was opposed by Indonesia, Qatar, Kuwait and Venezuela which argued Iraq and the prospect of war against a US led-coalition were responsible for the price spike and not issues of supply and demand.

The Opec communique confirmed an extraordinary meeting of Opec members would be held in Vienna on December 12.

Obeid ben Seif al-Nasseri, oil minister of the United Arab Emirates, said that meeting would decide what to do about oil production levels. “We will meet again in December,” he said.

Kuwait’s acting oil minister Sheikh Ahmad Fahad Al-Ahmad Al-Sabah said his country would act to ensure market stability, including in the event of war between the US and Iraq breaking out.

“We are doing the whole emergency plan — if there is a war we can continue with our production ... I think Kuwait and the Gulf states,” he said.

Lukman said there was 86 days worth of global oil currently stockpiled and this was adequate to cope with the coming northern hemisphere winter and the decision to maintain output was within market expectations.

Yasser Elguindi, a New York-based oil analyst with Medley Global Advisors, said Opec was always driven by fundamentals which were aimed at ensuring the market was fully supplied.—AFP