OPEC freezes crude output quota
AFP - Sunday, November 30
CAIRO (AFP) - - OPEC decided on Saturday to leave its oil output quota unchanged and vowed to take any action necessary to balance the market next month, the cartel's president said after a consultative meet in Cairo.
"Ministers agreed to take any additional action on December 17th (in Oran, Algeria) to balance oil supply and demand and achieve market stability," said Chakib Khelil, who is also Algeria's energy minister.
The widely expected decision comes as oil prices are trading at lows not seen in nearly four years, sparking alarm among the cartel's members about plunging revenues.
The market continued tumbling this month despite an OPEC output cut that was agreed in October and that took the output quota to 27.3 million barrels per day, excluding Iraq.
Khelil added: "OPEC member countries are adhering to the decision of 24 October and fulfilling their commitment."
"The conference reaffirmed its determination to stabilise the oil market based on its last month's decision which, according to indications, is being implemented."
However, many market analysts believe the most recent OPEC cut has not been fully implemented by all member nations.
Organisation of Petroleum Exporting Countries officials and ministers had already said in the run-up to the Cairo meeting that the cartel would delay any decision to cut output until December.
The group called the consultative gathering to discuss how to shore up prices, which have tumbled from record highs this year amid a looming global recession that has ravaged demand for energy.
Despite last month's 1.5 million bpd OPEC output cut, the market carried on sinking and the Cairo meeting was called as prices plunged below 50 dollars a barrel.
Slumping demand in the face of a global economic downturn has sent prices crashing by about two-thirds from record highs above 147 dollars a barrel struck just four months ago.
Earlier this month, London's Brent North Sea oil plunged to 47.40 dollars and New York crude touched 48.35 dollars -- both of which marked the lowest points for nearly four years.
That compared with their respective record highs of 147.50 and 147.27 dollars set on July 11, when fears of supply disruptions had sent them rocketing.
Meanwhile, Saudi King Abdullah said in an interview published in a Kuwaiti newspaper that an oil price of 75 dollars would be fair -- an indication that cuts might be forthcoming to lift the flagging market.
"We think that a fair price of oil is 75 dollars a barrel," he said. "Our budgets were not set at the latest world prices, but at another, lower price."
Saudi Arabia is the world's top crude exporter and by far the most important player in OPEC, which pumps 40 percent of global crude supplies.
Saudi Oil Minister Ali al-Nuaimi said ahead of the meeting that a decision on production would be made in December.
"This meeting is a preparatory meeting for a more resolved and firm decision in Algeria," he said earlier Saturday.
Other OPEC members, including Iran, Kuwait, Qatar and Nigeria, had already expressed support for deferring a decision until December.
Oil prices closed Friday at about 54 dollars per barrel, which marked a 63-percent drop from the record heights scaled in July.
OPEC comprises Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. A 13th, Indonesia, has suspended membership.
Indonesia officially leaves the cartel at the end of 2008, while Iraq does not have an output quota because of the country's post-war strife.
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File photo of a petrol station attendant filling up a car in Hong Kong. OPEC decided to leave its oil output quota unchanged and vowed to take any action necessary to balance the market next month, the cartel's president said.
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