2005 - OPEC

of global prosperity. And he affirmed that OPEC stood ready to assume its responsibility and
to work with others for the stability and security of the oil market.
Statement by OPEC Conference President, Sheikh Ahmad Fahad Al-
Ahmad Al-Sabah, on the recent rising trend in oil prices
Vienna, Austria, 9 August 2005
OPEC continues to monitor oil market developments closely and has observed with concern
the recent rising trend in oil prices and prevailing volatility in global markets. Noting that
this latest increase has been triggered by a series of refinery outages that have aggravated
downstream bottlenecks in key consuming regions, along with increasing geopolitical ten-
sions, OPEC reiterates its ongoing commitment to maintain market stability with reasonable
prices compatible with robust economic growth, particularly in the emerging economies of the
developing world. Towards this end, OPEC Conferences have repeatedly increased the produc-
tion ceiling by more than 4 mb/d in recent years. Moreover, MCs have accelerated projects
to expand production capacity in order to meet rising demand and ensure the availability of
adequate spare capacity.
While consultations with Heads of Delegation are ongoing after the decision of the June
Conference to increase the ceiling to 28 mb/d, OPEC MCs have continued to place additional
supplies on the market. OPEC-10 production is estimated to have reached about 28.3 mb/d,
while total OPEC is reportedly producing close to 30.4 mb/d and rising. These incremental
volumes have led to global supply exceeding demand over the last two years, allowing stocks
to continue to build to well above the five-year average. With the expectation for continued
healthy global economic growth and rising demand for oil, the Organization will continue to
take appropriate and prompt action as and when the need arises. MCs with spare capacity
(estimated at around 2 mb/d) have reiterated their readiness to make these additional supplies
available should the market call for it. While continuing to invest in new production capacity
and increase output to meet future growth in demand, OPEC reiterates its call on all parties
concerned to join efforts for market stability.
Welcoming the recognition of the need to address the downstream challenge, OPEC also calls,
in particular, for the enactment of concrete measures that would encourage rapid and sizeable
investments in the refining sector, particularly in conversion capacity, which has persistently
lagged market requirements and exacerbated oil price volatility.
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