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President of OPEC will automatically hike output if prices remain high |
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June 3, 2000
CARACAS, JUNE 2 (AP) - The president of the Organization of Petroleum Exporting Countries said Friday the oil cartel will "automatically" increase production by 500,000 barrels a day if prices continue at their current high levels.
Speaking on a local television program, Ali Rodriguez, who is also Venezuela's oil minister, said the increase could come as soon as next week. He said the automatic hike is part of a price band system put in place by the cartel in March during their annual meeting in Vienna.
Under the system, OPEC raises production if the oil basket price stays above dlrs 28 for 20 consecutive days, and trims output when the basket falls below dlrs 22 for 20 consecutive days.
"Now we have 13 days above the upper target of the price band," Rodriguez said, adding that in another week the cartel should automatically raise output by 500,000 barrels a day.
The increase would bring OPEC production up to 2.2 millions barrels daily, up from the 1.7 million barrels daily set in March.
Rodriguez said fears of a gasoline shortage, sparked by the start of the summer driving season in the United States, have pushed the price of the commodity to record highs in recent days.
OPEC ministers are due to meet June 21 in Vienna to review the March accord.
On Friday, Venezuelan President Hugo Chavez said he will visit OPEC member countries in July once national elections are over. He said in a televised interview that he will visit the OPEC heads of state to invite them officially for a summit scheduled to take place in September in Caracas.
It would be only the second OPEC heads of state summit since the organization was founded four decades ago.
Originally, Chavez planned to visit the OPEC nations from June 17 to June 25. Last week, he was forced to cancel his trip after the nation's high court decided to postpone general elections, citing technical problems.
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