OPEC set to bide time over output cut
AFP - Saturday, November 29
CAIRO (AFP) - - OPEC meets in Cairo later Saturday to review turmoil in the world oil market and decide whether another crude output cut is needed to prevent prices spiralling even lower.
However, it looked increasingly unlikely that the oil exporters' cartel would slash production at the gathering, as many ministers indicated they would prefer to wait until next month's scheduled meet in Oran on the Algerian coast.
"This meeting is a consultation meeting. I am not expecting that we will have a decision for the time being... although we think the market has a surplus," said Kuwait Oil Minister Mohammad al-Olaim in Cairo on Friday.
"So we think a decision could be taken but I think it will be in Algeria."
Several other OPEC ministers, including Iran, Qatar and Nigeria, also support the idea of deferring a decision until December 17 in Oran.
Venezuelan Oil Minister Rafael Ramirez said OPEC should cut production by "at least one million barrels" per day before the year-end.
"Maybe we need a cut. But we have to decide when -- if tomorrow or in the next meeting in Algeria," Ramirez told reporters.
Libyan Oil Minister Shukri Ghanem said that while Saturday's meeting was meant to be consultative, a decision to cut output should not be ruled out.
"We should study figures on supply and demand (and on) the increase in stocks," Ghanem said, "but that does not exclude the possibility of a decision" to cut production.
"All options are open... We think that a decision will be taken sooner or later."
Oil prices have fallen off a cliff since striking record high points above 147 dollars per barrel in July.
Last week they dived underneath 50 dollars per barrel to hit the lowest levels since early 2005 amid widespread fears that a looming global recession could force consumers to slash their energy usage.
Analysts warn that cutting output could damage the world economy, which is still reeling from the global financial crisis and accompanying credit crunch.
At the same time, the current oil price of about 50 dollars a barrel makes it more difficult for most OPEC countries to balance their books.
"I think OPEC is in an awkward position right now," said Kamel al-Harami, a Kuwaiti oil analyst.
"On one hand, prices are sliding below 50 dollars per barrel, hammering their revenues.
"On the other hand, they are embarrassed to push prices too high because that will hurt the crippled global economy, further dampening demand for crude."
Iraqi Oil Minister Hussein al-Shahristani meanwhile said Friday that 80 dollars a barrel is a "reasonable" price for oil and that his country would support any OPEC decision to cut output.
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File photo of the OPEC headquarters in Vienna. OPEC meets in Cairo later Saturday to review turmoil in the world oil market and decide whether another crude output cut is needed to prevent prices spiralling even lower.
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