OPEC president: Another output hike probably needed

by The Associated Press

OPEC’s new president said April 3 that cartel members will probably need to increase their oil output one more time this year.

Venezuelan Oil Minister Ali Rodriguez said the late March agreement in Vienna, Austria, for an output hike of about 1.7 million barrels a day would likely be insufficient. The purpose of that hike was to bring down international oil prices that had reached 9-year highs.

“Prices went down, but less than expected,” Rodriguez said. “That’s why I think it will be necessary to have an additional increase in oil production this year.”

Rodriguez reiterated the new price-band system that the Organization of Petroleum Exporting Countries will use for guiding prices by regulating supplies.

“If prices are below $22, we’ll cut production by 500,000 barrels a day and when prices are above $28 a barrel, we’ll increase production,” Rodriguez said.

Last week, nine OPEC members agreed to boost output quotas by 1.452 million barrels a day starting April 1, restoring the cuts made a year ago in an effort to boost prices and stabilize the market.

After initially balking at the agreement, Iran later said it would defend its market share and increase output by 264,000 barrels a day.

At the close of regular trading on the New York Mercantile Exchange April 3 — where prices are often about $1 per barrel higher than the OPEC crude basket — May crude was down 47 cents to $26.43.

Alaska North Slope crude for West Coast delivery fell 47 cents to close at $24.63 a barrel.