OPEC must boost oil output further to make a "really significant impact" on surging crude prices, the group's president said this afternoon, even though it is pumping close to capacity already.
OPEC countries needs to assess each of its 11 members' ability to produce more now that prices for oil futures contracts have hit new highs after a weekend terror attack in Saudi Arabia, OPEC President Mr Purnomo Yusgiantoro told reporters.
He spoke upon arrival in Beirut for talks ahead of a formal OPEC meeting on production policy tomorrow.
"What we need is a volume that can give a really significant impact to oil prices," said Mr Purnomo, who is also Indonesia's oil minister.
The weekend attack on oil-related offices and foreign workers in the eastern Saudi oil hub of Khobar stoked fears the Saudi government, which controls the world's largest proven crude reserves, cannot protect its vital oil installations.
Saudi Oil Minister Mr Ali Naimi argued that his country was taking adequate steps to protect its most important facilities.
"The illusion that terrorism threatens petroleum facilities in the world is not true. I assure you that installations in the kingdom of Saudi Arabia are secure because they are under intensive protection to prevent such acts," he said in a speech at the Beirut offices of the UN Economic and Social Commission for Western Asia.
Mr Naimi added that his country was trying to help lower prices but argued that OPEC was not to blame for the runaway market.
"Contrary to what some believe, OPEC cannot always control prices," he said. "OPEC's role is limited to working to achieve a balance between supply and demand in the crude oil market. But the prices are controlled by the market and are affected by many factors."
Saudi Arabia is already boosting its own production independently of OPEC. Naimi said earlier that he would urge the group to raise its output ceiling by as much as 2.5 million barrels a day, or 11 per cent.
OPEC pumps more than a third of the world's oil, and its talks in the Lebanese capital are drawing unusually close attention.
Crude prices have soared in recent weeks due to a combination of strong global demand, low inventories in importing nations and fears about instability in key oil-producing states in the Middle East.
Mr Purnomo said OPEC was already pumping 2.3 million barrels above its current quota of 23.5 million barrels. Several OPEC members are pumping near their limits, and Saudi Arabia accounts for most of the group's unused capacity. The group is using 88 percent of its total capacity, he said.
"What we would like to see is which countries now still have spare capacity ... before we decide on a quota increase," Mr Purnomo said.
Oil prices eased somewhat today, slipping 37 cents to $41.96. That came a day after a surge yesterday, the first day of trading on major markets since the Khobar attack. US light crude for July delivery climbed $2.45 to $42.33 per barrel the highest settlement price in the contract's 21-year history on the New York Mercantile Exchange.
On the International Petroleum Exchange in London, July contracts of Brent crude closed Tuesday at $39.08 their highest for 13 1/2 years. Brent futures were trading 50 cents lower on today at $38.58.