Venezuela's Chavez: Oil Prices Not High, They're Fair
Dow Jones Newswires
(This article was originally published Thursday)
NEW YORK -- Venezuelan president Hugo Chavez Thursday said the Organization Of Petroleum Exporting countries wants to reduce oil-price volatility and remains committed to its price-band policy.
" We don't want (prices) to continue to escalate. We need to find a middle ground," he said at a news conference on the sidelines of the United Nations Millennium Summit.
Under the price-band mechanism OPEC would boost output by 500,000 barrels a days if the group's crude basket remained above $28 for 20 consecutive days. The 20-day mark is expected to be breached on Friday.
Asked whether OPEC would consider boosting output by more than 500,000 b/d, Chavez said, "It depends on the situation.
" There's not just one answer for that; it depends on the evolution of the market and various things."
Chavez spoke to reporters after chairing a U.N. round table of leaders from around the world, including Fidel Castro of Cuba and Alberto Fujimori of Peru.
He said Venezuela was aware of the impact of high oil prices on the economies of consuming nations, especially those countries "with more vulnerable, weaker economies" and that it wanted prices to moderate.
Chavez said he met with a group of U.S. oil industry officials earlier Thursday and that he discussed the impact of high oil prices with those gathered at the round table.
He expressed support for OPEC's price band mechanism, saying it was designed to stabilize oil prices and has been "accepted by almost all OPEC members."
The price band mechanism was the brainchild of Venezuela's oil minister Ali Rodriguez, who currently serves as OPEC's president.
Chavez said OPEC controls only 40% of the world's oil output and should not be the only group to respond to high oil prices.
"There are many independent producers, many regional organizations that exploit oil in Texas and Oklahoma," Chavez said. "In the North Sea, there are oil producers. Russia, Norway, Mexico, there many countries producing oil in the world."
Repeating comments made recently by leaders of other OPEC nations, Chavez said high taxes in consuming nations and market speculation were partly responsible for the recent run-up in oil prices.
"The greatest impact on these prices is the taxes that are charged by countries on their citizens," referring to average fuel taxes of 60% in Europe and 25% in the U.S.
In recent months, Venezuela has grown increasingly hawkish on oil prices and resistant to an OPEC output hike as Chavez seeks to finance his ambitious social programs.
Echoing Venezuela's dependence on oil revenue, Chavez recently said that a decline in oil prices would be a "death sentence" for his country.
He reiterated that sentiment Thursday saying, "It's not that oil prices are high. They are just." |
