Why We Did Not Increase Production – OPEC President
From Patrick Ugeh in Abuja, 02.27.2008
President of the Organisation of Petroleum Exporting Countries (OPEC), Dr. Chakib Khelil, yesterday in Abuja explained why the body did not increase production of oil in the face of rising cost. Khelil, who is Algeria’s Minister of Mines and Steel, told reporters after the third Steering Committee meeting of the Trans-Saharan Gas Pipeline project that, since the stocks were high and the level of products were high, there was no need to increase production.
“In addition, there was concern about the second quarter of this year, which normally would have decreased in demand.
"Plus all the issues related tothe prices in the US which is leading to a deterioration in the economic growth in the US and its impact on the economic growth in the world. Which would be tied to a decrease in demand in general.
"So, with this, you can have a decrease in demand in the whole year, and for the second quarter. You have high stocks. So why would you need to increase production?,” he explained .
Khelil said it would not be wise to increase production just as it would have been suicidal to decrease production because of the deterioration in the economic growth. "We could be called a scape-goat for what’s happening in the world," he said. He said the increase in oil price was not because of the supply but because of the activities of speculators and other geo-political issues throughout the world.
He however affirmed: "we have been staying at the same level or lowering the production because we have exactly the same situation – stocks are high, gasoline stocks are high, and we have lower demand in second quarter and we certainly have lower demand for the whole year. So why increase supply? So our choice is between the two and I cannot tell you what decision the conference is going to take.”
