31 May 2005, 10:42  Stockpiles of U.S. crude reached six-year highs this month

Stockpiles of U.S. crude reached six-year highs this month, but should ebb as drivers burn up more gasoline during the summer holiday season, which started over the Memorial Day weekend. The U.S. Energy Information Administration (EIA) will release its weekly petroleum stocks and output data on Thursday, a day later than usual due to Monday's public holiday. Anxiety over the health of Saudi Arabia's King Fahd also receded as officials said his condition was improving after he was taken last week to hospital with pneumonia. Saudi Arabia, the world's biggest oil exporter, and fellow OPEC member Kuwait helped drive OPEC's output to a new 25-year high above 30 million barrels per day (bpd) this month as they moved to bolster inventories ahead of peak winter demand. The Organization of the Petroleum Exporting Countries meets on June 15 to discuss its output quota, with core Middle East Gulf members saying the cartel should continue pumping at current levels. But more hawkish members are calling for closer adherence to quotas. "We emphasize that OPEC members should be committed to their quotas because oversupply will cause an increase in a kind of oil which is not demanded by the market," Iran's OPEC Governor Hossein Kazempour Ardebili told the ISNA students news agency. Most of OPEC's limited spare capacity is of heavy, high-sulphur crude, ill-suited to producing high-quality gasoline and valued at several dollars below U.S. and European benchmarks.

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