| Indonesia warns high oil prices all summer 2004 { May 10 2004 } Original Source Link: (May no longer be active) http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1083180398550&p=1012571727085http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1083180398550&p=1012571727085
Indonesia warns of high oil prices through summer By Shawn Donnan in Jakarta and Carola Hoyos and Kevin Morrison in London Published: May 10 2004 21:09 | Last Updated: May 10 2004 21:09 Indonesia's energy minister, Purnomo Yusgiantoro, warned on Monday that there was little the world's largest oil exporters could do to rein in oil prices.
In an interview with the FT Mr Yusgiantoro, who is the current president of the Organisation of Petroleum Exporting Countries, said that high crude oil prices could last through summer. But he blamed "very tight" gasoline stocks in the US due to new regulations there, the actions of speculators, and geopolitical issues including the unrest in Iraq.
"I don't like these kinds of prices. These kinds of prices will really hurt everybody," he said. "But this price level is not because Opec is playing. There is not much Opec can do."
Saudi Arabia, Opec's most influential member, on Monday called for what he termed "an essential" 1.5m barrel a day increase in the cartel's output ceiling.
The announcement had a psychological impact but it was modified by renewed worries about the security of Iraqi supplies.
Oil futures prices in London dropped 49 cents to $36.51 and those in New York fell 53 cents to $39.40.
Opec is expected to discuss a change of quotas when it meets the world's biggest oil consumers in Amsterdam on May 22-24 and finalise it at the cartel's June 3 meeting in Beirut.
Saudi Arabia already has the backing of some important Opec members, including Kuwait. However, analysts agreed with Mr Yusgiantoro.
Adam Sieminski, analyst at Deutsche Bank, said: "I think what we are likely to see are quotas increase by 1.5m barrels, not actual production."
The latest estimates are that the Opec-10, excluding Iraq, produced more than 2m b/d above the cartel's self-imposed limit of 23.5m b/d last month.
With Saudi Arabia carrying the bulk of Opec's estimated 3m b/d of spare capacity, much of any increase in Opec supply is likely to come from the kingdom, although Mr Naimi is said to have already won the backing of several important Opec members, including Kuwait.
Nevertheless, Mr Yusgiantoro indicated that some Opec members were in favour of raising the oil cartel's preferred price band.
He said that rather than trying to bring prices all the way down to the $22-$28 target, the cartel is likely to "soon" move to raise that price band.
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