OPEC President: OPEC oversupplying by 2 million barrels per day--"somewhere stocks are building"

CARACAS (Dow Jones)--The president of the Organization of Petroleum Exporting Countries, Ali Rodriguez, said Thursday that, during the second andthird quarter of this year OPEC has been producing 2 million barrels of oil per day more than required.

"We've been examining the oil market very carefully and have been witnessing an oversupply of 2 million barrels per day," said Rodriguez, who is also Venezuela's oil minister.

"During the second and the third quarter, which is now closing, OPEC was supplying the market more than was required and that means that, somewhere, stocks are building," Rodriguez said.

Rodriguez warned that oversupply and stock building could lead to another price crash similar to the one after OPEC's Jakarta output accord in 1997.

"The problem is not crude, the problem is the derived products" he said. Rodriguez said OPEC's compliance is "satisfactory."

Data from the American Petroleum Institute shows that U.S. crude inventories fell almost 2 million barrels in the week to Sep 15.

While the API numbers also shows little change in heating oil and diesel stocks, the market is expected to take these figures as bullish.

Rodriguez further said that OPEC will study the situation "very cautiously" before making a decision on another oil output hike.

Earlier Thursday, Rodriguez said there is consensus within OPEC to wait until Oct. 1, when the last production increase is slated to hit the market, before making a decision on another hike.

Rodriguez also said Venezuela won't object to a proposal by U.S. presidential candidate Al Gore to release oil from the Strategic Petroleum Reserve to cool overheated oil prices.

"If they consider it a solution, they're welcome to it," Rodriguez said.

"We can't object to a decision made by a sovereign state." he said.

Rodriguez didn't say he had talks with the U.S. or if the U.S. had decided to release oil from the SPR. He was simply expressing Venezuela's opinion of the proposal.

Rodriguez further said he is willing to meet with U.S. and European Union officials to discuss the oil market.

-By Fred Pals, Dow Jones Newswires; 582 564 1339; fred.pals@dowjones.com

http://pub3.ezboard.com/fdownstreamventurespetroleummarkets.showMessage?topicID=1513.topic

-- Carl Jenkins (Somewherepress@aol.com), September 21, 2000