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To: The Ox who wrote (73363)	9/14/2000 10:01:41 AM
From: Douglas V. Fant	Respond to of 95453

Michael, Kuwait notes that it is peaking out in production capacity...Anyone follow TTI here? Kuwait can't meet quota OPEC member warns it may not be able to produce the oil it has promised September 14, 2000: 4:45 a.m. ET LONDON (CNNfn) - - Kuwaiti Oil Minister Saud Nasser al-Sabah said Thursday that Kuwait does not have the capacity to produce as much oil as it promised under OPEC's new quota agreement announced last Monday, raising doubts about whether the oil cartel's pledge to boost global supply is realistic. The Minister also said oil prices would continue to rise through the remainder of this year because of an expected increase in demand as winter approaches, but might decline at the start of next year. His remarks came from an interview by the Saudi-owned pan-Arab daily newspaper al-Hayat in Paris, where he is talking with French officials. The 11 members of the Organization of Petroleum Exporting Countries agreed at a weekend meeting in Vienna to raise production by 800,000 barrels per day beginning on Oct. 1, but crude oil prices continue to linger near 10-year highs. Brent crude for November delivery rose 6 cents to $32.06 in early trade on the International Petroleum Exchange in London Thursday. Kuwait cannot produce at new quota "The capacity of OPEC to increase production is very limited," Saud said. "We have reached our maximum production capacity," he added. "Kuwait received an extra production quota of 64,000 barrels per day, but we do not have the production capacity to do that," he said, adding that only Saudi Arabia and the United Arab Emirates have a margin of extra production capacity. Asked if the next OPEC meeting in November would agree to increase production if prices remained high, the Kuwait oil minister said: "We did not agree to increase production. We said we will meet on November 12 to evaluate the oil market. I want to ask, if we meet on November 12 and the price is still high what will we do?" "We will apply the price mechanism. If the oil price is over $28 a barrel we will increase production by half a million barrels per day, but who in OPEC can add half a million barrels per day to its current production?" Taxes account for high fuel prices Saud also addressed current gasoline prices, which have become the object of public protests in the U.K. and other countries because of what critics have called unreasonably high taxes. As much as 80 percent of the price of a liter of gasoline in the U.K. goes into the government's coffers. Saud said it was high taxes on products such as gasoline -- not a lack of oil -- that were responsible for current global prices of oil. "They are high because of taxes. I have said my point of view. The current price is realistic and normal. Whatever we do now, whatever decision we take tomorrow or the day after tomorrow to increase production will not affect the market because it realizes that there is no country capable of increasing its production in a big way." "We have been clear with all industrial countries including the United States and France, that this is our maximum production capacity and we cannot give more than our production capacity," he said.