Chavez: OPEC considering adjusting current price band

The Associated Press

OPEC is considering raising its current price band mechanism by several dollars per each barrel of oil it produces, Venezuelan President Hugo Chavez said Oct. 1.

“It's time to revise the price band ... and it is being discussed,” Chavez told foreign reporters at a news conference. Venezuela is a founding member of OPEC.

An OPEC spokesman denied that there are any moves afoot to raise the cartel's oil-price target. The spokesman, speaking by phone from OPEC headquarters in Vienna, Austria, told Dow Jones Newswires that the subject of raising the price target isn't being discussed among OPEC members.

OPEC currently seeks prices between $22 and $28 per barrel.

Chavez said OPEC should target prices between $25 and $32 per barrel of oil. A notorious price hawk within OPEC, Chavez needs higher prices to fund increased spending by his cash-strapped government as he prepares for a possible recall vote on his rule.

OPEC officials at the group's meeting in late September said that the price band wouldn't be adjusted and that the average $25 a barrel price is still the group's target price. To maintain that price range, the cartel decided to remove 900,000 barrels per day from the market as of Nov. 1 to adjust for a seasonal waning of demand.

In trading Oct. 1 on the New York Mercantile Exchange, where futures prices are typically several dollars higher per barrel than OPEC's basket of world crude prices, light, sweet crude for November delivery gained 3 cents to $29.42 a barrel.