Caracas, Venezuela OPEC leaders strongly defended their oil policies Wednesday, blaming high taxes and market speculators for prices that sparked global protests.
During the first Organization of the Petroleum Exporting Countries summit in 25 years, leaders insisted there was little reason to raise the amount of oil they're producing.
In October, the United States will release 1 million barrels of oil a day from its strategic reserve, while OPEC will produce an additional 800,000 barrels a day, measures that should lower prices.
"I don't see why anybody should worry," said Nigerian President Olusegun Obasanjo.
Declared OPEC President Ali Rodriguez: "No deficit of crude exists."
Supply actually exceeds demand by 2 million barrels a day, he said, adding that some European Union members quietly were drawing from their own reserves. He declined to reveal who, saying, "I know, but you have to find out."
Rodriguez also announced that French Prime Minister Lionel Jospin and Venezuelan President Hugo Chavez had agreed Wednesday to have a meeting of OPEC and European Union officials to discuss the oil market. Rodriguez plans to travel to Paris and London before OPEC's own Nov. 12 oil ministers meeting in Vienna, Austria.
While the globe struggles with high prices and shortages of refined products such as heating oil, OPEC is struggling to stick to its so-called "price band" device designed to keep oil at $22 to $28 a barrel.
The crude oil price benchmark that OPEC follows was trading at $29.15 Tuesday, up from $29.09 Monday. It was $31 in mid-September.
A different, higher benchmark followed by many in the industry the spot month contract for light sweet crude was $31.46 per barrel at the close of trading Wednesday on the New York Mercantile Exchange.
Under the band system, production would increase by 500,000 barrels a day if oil exceeds $28 a barrel for 20 consecutive trading days. A price below $22 for 10 straight days would trigger a daily cut of 500,000 barrels. OPEC has invoked the mechanism, to little effect.
"OPEC does not want the price to be too high," said Nigeria's Obasanjo. "We want an inherent stability to exist within the price framework of crude oil and also the establishment of a floor which the price of oil cannot fall below."
OPEC officials maintain that taxes on gasoline, speculation in futures markets and bottlenecks in transportation and refining are to blame.
President Clinton's decision to tap U.S. strategic reserves was criticized as a political move to help Democratic presidential nominee Al Gore's campaign. Clinton said Wednesday he acted because it was "the most prudent thing to do."
Analysts say stubbornly high oil prices stem from low world inventories and the fact that OPEC which churns out about 40 percent of the world's oil is producing at near capacity.