As oil prices rise, Venezuela rejects plans to increase output

Venezuelan Energy Minister confirmed his country –world's fifth oil exporter- would not support Saudi proposal to increase oil output by more than 2.0 million barrels per day.

As oil prices reached Monday a new record -$42.15 per barrel- Venezuela's government insists it is not going to support any proposal to increase output by more than 2.0 million barrels per day. Venezuela's Energy Minister Rafael Ramirez said he does not support Saudi Arabian proposal for OPEC, as reiterated President Hugo Chavez’s view that the price in the market has nothing to do with the level of production.

Venezuela, world's fifth largest oil exporter and second US supplier, believes that unrest in Iraq, not producing levels, is a main cause of the high cost of crude oil. Asked if he would support the proposal, Mr. Ramirez simply replied: "No." He said: "We have enough oil in the market but we have now some political factors in the Middle East that are pushing prices."

Venezuela's public declaration came a few moments earlier, the Group of the Seven Industrialized Countries (G-7) plus Russia, issued a statement asking oil exporters to contribute on the reduction of energy costs by increasing their level of production. According to observers, lack of support to Saudi plan within OPEC pushed oil prices up again, which led to a new record as closed $42.15 a barrel in New York.

OPEC leaders postponed until June 3 a Saturday meeting meant to take a decision over which policy to follow in view of the current market scenario. Divisions came as Saudi Arabia surprisingly suggested to increase output, something that had been previously rejected by countries as Venezuela.

Last week, Venezuela's officials from the local oil giant, PDVSA, confirmed in Washington the intention of Caracas to respect previous agreements with the United States, as announced new refinery works to expand PDVSA's subsidiary in the United Sates, the third oil refining company operating in that country.