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Officials: OPEC Not Likely to Raise Production Levels


04 March 2008

OPEC oil ministers say they are unlikely to agree to an oil production hike at their meeting in Vienna Wednesday, despite historically high oil prices. Lisa Bryant has more for VOA from Paris.

President Bush has set a goal of reducing U.S. gas consumption by 20 percent over the next decade
The price of oil soared to nearly $104 a barrel Monday, an all-time high that comes as the dollar fell to a historic low in world markets.  But oil ministers of the 13-member Organization of Petroleum Exporting Countries Tuesday all but ruled out raising production.

Rather, OPEC president and Algerian oil minister Chakib Khelil says the cartel is debating whether to maintain production at its current level of about 29.7 million barrels a day or to lower it. 

He said the US economic slowdown is affecting world growth and may result in a drop in demand. Khelil said turmoil in the Middle East is also affecting oil production and prices.

Khelil's views are shared by other oil ministers. Several OPEC members, including Kuwait and Libya, favor maintaining output at its current level. Others, including Iran and Venezuela, want to cut output.

Some traders believe the high price of oil is being driven by the dollars drop against world currencies.  Ira Eckstein, of the New York Mercantile Exchange, is among them.

"I think it's a continuation of the dollar slump from last year.  No new news, this is the trend," he said.  "It looks like that $103.50 area they wanted to test at that was like the last resistant spot and that's kind of where we are sitting right now."

OPEC ministers are expected to monitor the dollar levels, but take no action on production levels at their Wednesday meeting.

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