OPEC head: We have no extra oil

August 3, 2004

JAKARTA (Reuters) - OPEC has no extra oil to immediately supply the world market to cool record-high prices, the head of the group said Tuesday.

"The oil price is very high, it's crazy. There is no additional supply," said OPEC president Purnomo Yusgiantoro, who is also Indonesia's oil minister.

U.S. oil hit a high of $44.24 a barrel Tuesday, the highest since crude futures were launched on the New York Mercantile Exchange in 1983. London's Brent crude jumped 48 cents to hit a high of $40.45 a barrel.

"Minister Naimi has said Saudi Arabia can increase production, but they cannot do it immediately," said Purnomo, referring to Ali al-Naimi, oil minister for the world's biggest exporter, Saudi Arabia.

A Gulf industry source said late last month that Saudi Arabia may boost production to 9.5 million barrels per day (bpd) in August. That output level would be just a million bpd below the country's full capacity.

Purnomo's comments echoed those Monday of Algerian Oil Minister Chakib Khelil, who said the Organization of the Petroleum Exporting Countries had done all it could to stop this year's oil price rally.

"OPEC can do nothing," Khelil told reporters in Algiers.

International oil prices have surged more than one-third since the end of 2003 as global demand has accelerated with robust economic growth, stretching world production almost to its limits.

Security fears in the Middle East, which pumps about one-third of global output, and supply disruptions or potential outages in other major producers such as Nigeria, Norway and Russia have helped boost oil markets higher.

Some industry estimates indicate that OPEC, which accounts for about 40 percent of supply, is pumping close to 30 million bpd of crude for the first time since 1979.

The group, which raised its official production limits to 26 million bpd on Aug. 1, has been producing way over its self-imposed ceiling to try and dampen soaring prices.

The official limits exclude Iraq, where exports are expected to reach between 1.7 and 1.8 million bpd this month as operations recover from a series of sabotage attacks earlier this year.

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