2005 - OPEC

accentuated in light of the current market situation, the Conference further decided to continue
monitoring market developments and that its President should make consultations ahead of the
next Ordinary Meeting of the Conference, scheduled to convene in Isfahan, the Islamic Republic
of Iran, on 16 March 2005, to ensure that a timely cut could be made, as appropriate.
After reviewing the evolution of the OPEC Reference Price since its inception in 2000, the
Conference noted that prices have remained outside the Band for over a year due to market
changes that have rendered the Band unrealistic and has, therefore, decided to temporarily
suspend the current Price Band, pending completion of further studies on the subject. Notwith-
standing this temporary suspension, the Conference stressed that the Organization remains firm
in its commitment to maintaining a stable market with prices at reasonable levels conducive
to expansion of production capacity and supply growth to meet rising demand, as well as
to ensuring that there is enough oil to fuel global economic growth in the 21st century, in
particular in the developing countries.
The Conference expressed its appreciation to the Government of the Republic of Austria and
the authorities of the City of Vienna for their warm hospitality and the excellent arrangements
made for the Meeting.
Statement by OPEC Conference President on recent price development
Vienna, Austria, 6 March 2005
Along with other members of the global community OPEC has been closely observing oil price
movements recently, seeing that the ORB has risen by more than $8.50/b since 8 February,
reaching a $48.36/b on Friday, 4 March. OPEC is concerned about this price development
despite the fact that the market is well-supplied and global crude oil stocks have continued
to build, now standing above their five-year average.
This recent price rise is due to a number of factors, such as the late cold snap in the north-
ern hemisphere and unexpected outages in the downstream sector, in addition to expecta-
tions of continued strong demand and ongoing concerns about the slowdown in the pace
of growth in non-OPEC supply, as well as downstream bottlenecks. Increased investment in
commodities by speculators has caused further sizeable upward pressure on prices. OPEC is
committed to maintaining stability and ensuring that global markets remain well supplied at
all times. Towards this end, OPEC had increased production levels three times during 2004.
Currently, the Organization is producing around 29.5 mb/d, which has ensured that demand
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