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OPEC Defers Decision on Raising Oil Production, Until June - 2004-05-22

Despite concern over rising oil prices and pressure to increase output, OPEC members have deferred a decision on raising production quotas, until the oil cartel's meeting in June.

OPEC ministers say they are deeply concerned about the recent rise in world oil prices, but will hold off making any decision on increasing production, until the cartel meets formally in Beirut next month.

Oil prices are close to their 21-year high, threatening to slow down economic growth.

OPEC members are in the Dutch city of Amsterdam for an informal conference, attended by representatives of oil producing and consuming countries. But under intense pressure from the United States and other oil-consuming nations to increase output and reduce prices, OPEC discussed a Saudi proposal to boost production by more than two million barrels a day.

Most spare oil capacity is limited to Saudi Arabia, which has already told buyers it will lift deliveries in June. That's when the rest of the oil cartel's members will decide whether to follow the Saudi lead. The new Saudi production is not expected to arrive in the United States until July or August.

OPEC's president stressed that the cartel is not to blame for a spike in prices that has kept U.S. crude prices above $40 a barrel for days. Neither, he said, is inadequate supply. Rather, OPEC blames the high prices on bottlenecks in production, global tensions, unexpected demand and heavy speculation.