London, July 31: Kuwait Oil Minister Sheikh Saud Nasser al-Sabah and OPEC Secretary-General Rilwanu Lukman have agreed that weaker oil prices have removed the need to increase cartel output, a Kuwaiti spokesman said.The spokesman, giving details of what he described as a recent telephone conversation between the two officials, added-- "Sheikh Saud requested that Lukman consult with OPEC President Ali Rodriguez in order to issue an official statement to all member states that the price band mechanism is not operative at this time, and that there is no need for an increase in oil output at the end of July, because of the decline in oil prices," the spokesman added.The Kuwaiti spokesman declined to elaborate.Under an OPEC agreement, the release of 500,000 bpd of group production is triggered on a pro rata basis if prices move above $28 per barrel range for the cartel's reference basket for 20 consecutive business days.Earlier this month OPEC president Ali Rodriguez told cartel members to prepare to raise supplies after the basket price had been above the upper limit of the target range for 10 days.The price then dipped below $28 and Rodriguez said the rise would not now take place.
However OPEC member Algeria on Wednesday said it would increase daily output by 16,000 barrels to 827,000 bpd on July 29 in accordance with the original OPEC directive as it had not received word that the supply increase would not now go ahead.
And earlier this month OPEC's largest exporter Saudi Arabia announced an initiative for an additional 500,000 barrels per day (bpd) "within days" to help calm prices.Traders have said Saudi Arabia is quietly leaking extra supply into the market to ease prices down to a target of $25 a barrel. Prices have come off almost $3 a barrel over the past 10 days.
U.S. Energy Secretary Bill Richardson said on July 20 the world needed more oil and called on OPEC to follow Saudi Arabia's lead in signaling a supply increase.
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