- The Washington Times - Thursday, January 9, 2003

The State Department yesterday took the unusual step of urging the Organization of the Petroleum Exporting Countries to increase crude-oil production when it meets in Vienna, Austria, this weekend to offset dwindling output from Venezuela.
The department said that it was appealing in private to several OPEC members, although it declined to identify them.
"We've seen a number of statements from members of OPEC about possibly increasing production, and that would be a positive development. Obviously, they are going to have to get together and decide, but we're also in touch with various countries involved," department spokesman Richard Boucher told reporters.
"Obviously, oil is important to all of us," he said.
Oil exports from Venezuela, the world's fifth-largest and OPEC's third-largest producer, have decreased by about 80 percent since a strike aimed at forcing President Hugo Chavez from office began a month ago.
Adding to the turmoil and high prices in oil markets is the possibility of a U.S.-led attack on Iraq as early as next month, which would halt exports from that country, the world's second-biggest holder of crude reserves after Saudi Arabia.
Venezuela is the fourth-largest exporter to the United States after Saudi Arabia, Mexico and Canada. According to the Department of Energy, 1.3 million barrels were imported daily from Venezuela last year, about 13 percent of all U.S. imports.
The Latin American country's government-owned oil company also has one of the largest refining systems in the Western Hemisphere. Its refining and marketing U.S. subsidiary is the Tulsa, Okla.-based company Citgo.
At its Vienna meeting, OPEC is expected to discuss boosting the cartel's production by up to 6.5 percent and increasing output by as much as 1.5 million barrels a day in an effort to hold down prices.
An increase in production would come less than a month after OPEC's 11 members decided to slash output by up to 1.7 million barrels a day, in hopes of preventing a price decline when seasonal demand dips in the spring.
The Department of Energy said in a monthly report yesterday that crude-oil prices this year will rise 17 percent compared with 2002.
Oil is expected to average $30.58 a barrel, up more than $4 from $26.12 last year, the department's Energy Information Administration said in its Short-Term Energy Outlook.
But an unexpected increase in U.S. inventories reported by the Energy Department yesterday actually pushed crude-oil prices lower for the third day in a row.
Prices have dropped about 8 percent from a two-year high on Jan. 3, the biggest three-day drop since mid-April, and were up 44 percent from a year ago.
In London, the February Brent crude-oil futures contract fell 54 cents, or 1.8 percent, to $28.79 a barrel on the International Petroleum Exchange.

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