Saudi need to placate the unhappy citizens who flew planes agaist the twin towers in 911, are bombing expat compounds and are now targetting oil production facilities.
They are unhappy with the US continue to be the hired gun supporting the house of Saudi.
They are unhappy with the slow flow of money to provide jobs for a growing population.
The US needs cheaper oil for the economy to grow to boost Bush's chances. That is creating a split within the OPEC.
Dissent Greets Saudi Plan for More Oil
Reuters
Monday, May 24, 2004; 1:40 AM
By Jonathan Leff and Anna Mudeva
AMSTERDAM (Reuters) - Dissent emerged in OPEC on Sunday after Saudi Arabia announced unilateral plans to raise supply and asked OPEC to endorse a big increase in cartel output limits to lower crude prices.
Hopes that the Organization of the Petroleum Exporting Countries might swiftly back a Saudi plan to lift supply limits by 2-2.5 million barrels daily, 8-11 percent, have been dashed.
Some in OPEC are angry that Riyadh has decided to lift its production to just over nine million barrels daily in June, a rise of about 10 percent, without OPEC approval.
"They can't. It's a mistake. Saudi Arabia can't decide alone to increase production," Libya's Oil Minister Fethi bin Chetwane told reporters.
The comments bode ill for OPEC unity at a time when U.S. oil prices are near 21-year highs, peaking last week at $41.85 a barrel.
U.S. Energy Secretary Spencer Abraham said Saudi had promised to raise June output to 9.1 million barrels a day, slightly more than the 9.0 million indicated in a statement from Saudi Oil Minister Ali al-Naimi on Friday.
"Minister Naimi stated to me that Saudi Arabia is fulfilling all genuine requests for June for a total of 9.1 million barrels a day and stated that going forward they will meet all requests up to their capacity of 10.5 million bpd," Abraham said.
The officials representing the world's biggest oil producing and consuming nations spoke during an energy forum in Amsterdam.
The Saudi effort would put an extra 800,000 barrels a day of oil on the world market in June, up 10 percent from its estimated April output of 8.3 million.
Dissent Greets Saudi Plan for More Oil
All other OPEC members are pumping flat out, most above official limits, so any increase in quotas for them would only legitimize existing supply.
STAKES UPPED
Saudi announced its measure ahead of informal OPEC talks in Amsterdam on Saturday that agreed oil prices should come down to avoid hampering world economic growth.
But the talks made no mention of Riyadh's recommendation that OPEC lift quotas by more than two million bpd. A full meeting in Beirut on June 3 will decide policy.
Naimi told Shoichi Nakagawa, Japan's Minister of Economy, Trade and Industry (METI), that Saudi wanted OPEC to lift quotas by 2-2.5 million barrels a day, METI official Yasuo Tanabe told Reuters. The Arabic Al-Hayat newspaper quoted Naimi as saying he saw the need for an increase of 2.3-2.5 million.
"We support the Saudi Arabian proposal and hope that it will be adopted by OPEC to show that there is a will to explode the speculative bubble," said European Energy Commissioner Loyala de Palacio.
"I believe the action by Saudi Arabia is important," British finance minister Gordon Brown told reporters ahead of a meeting of the Group of Seven economic powers in New York. "That will add pressure on the other OPEC countries to do the right thing."
Riyadh has upped the stakes after an initial proposal two weeks ago to raise output by at least 1.5 million bpd, six percent, failed to stem a rise in prices.
"We don't agree," said Libya's Chetwane of the new Saudi plan. "This is too much." Venezuela also opposes.
A senior OPEC delegate from another country told Reuters: "I feel there's going to be a lot of resistance to the Saudi idea in Beirut. The fear is that when prices start going down it won't be $1 or $2 it will be $10."
Some in OPEC said they would like to take the opportunity while prices are high to upgrade the group's official $22-$28 a barrel price target.
"$28-$30 for the OPEC basket is a very reasonable price for producers and consumers," said Qatari Oil Minister Abdullah al-Attiyah. Nigeria agreed. |
