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EDITIONS
 Sunday, 12 January, 2003, 15:44 GMT
Opec agrees to pump more oil
Oil workers rally in front of strike-bound tanker
Venezuela's strikes have hit exports very badly
The oil producers' organisation Opec has agreed to increase production to try to stabilise the price of oil.

Opec is trying to send a very strong message that it will do its utmost to stabilise demand and supply

Abdullah bin Hamad Al Attiyah, Opec president
The cartel made the decision after four hours of talks at a meeting in Vienna in response to a sharp rise in world prices.

Opec members agreed to raise production by 1.5 million barrels a day to 24.5 million barrels from the beginning of February.

The decision is expected to calm the market and prevent further price increases, although some analysts thought the increase was not enough to fill the gap in oil production caused by a continuing general strike in Venezuela.

"Opec is trying to send a very strong message that it will do its utmost to stabilise demand and supply," said the cartel's president Abdullah bin Hamad Al Attiyah.

Resuming production

Since mid-December the price of crude oil in both London and New York has been above Opec's target range of $22 to $28 a barrel.

Opec countries committed themselves to defend and support our market share until such time that we can re-establish oil production levels

Rafael Ramirez, Venezuelan energy minister
The strike in Venezuela has cut the amount of oil on the market by approximately 2 million barrels a day.

Venezuela's energy minister Rafael Ramirez said he expected his country's oil production to climb back to normal levels by mid-February.

But in the meantime the loss of production from Venezuela would be made up by other countries.

"Opec countries committed themselves to defend and support our market share until such time that we can re-establish oil production levels," Mr Ramirez said.

Satisfying demand

Although the problems in Venezuela have been the main cause of rising prices, the prospect of war with Iraq has also had an effect.

The oil producers are worried that if prices are too high, they could trigger a recession in the oil consuming countries and demand for oil might fall.

But, if prices are too low, then the oil producers will earn less money.

Some analysts suggested that the 1.5 million barrels increase would go only part of the way to making up for Venezuela's shortfall.

  WATCH/LISTEN
  ON THIS STORY
  The BBC's Andrew Walker in Vienna
"Opec's objective is to bring prices down"
Analysis of the oil market, OPEC, and the alternatives

Key stories:

Analysis

Background
See also:

10 Jan 03 | Business
13 Aug 02 | Business
13 Aug 02 | Business
17 Sep 02 | Middle East
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