OPEC likely to delay output cut decision to December
AFP - Saturday, November 29
CAIRO (AFP) - - OPEC will probably wait until December to decide whether to cut output, ministers said on Friday, ahead of a meeting to review conditions in a market said to be awash with oil.
Organisation of Petroleum Exporting Countries ministers are to meet in Cairo on Saturday amid pressure for production cuts to stem heavy oil price losses, which continued to mount on Friday.
Iran, Kuwait, Nigeria and Qatar said any decision to cut output would be made at the next scheduled meeting in Oran, Algeria on December 17.
But 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.
He added, however, that "certains members think it prudent to wait until things are clearer."
Venezuelan Oil Minister Rafael Ramirez said OPEC should cut production by "at least one million barrels" per day before 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.
Iran's Gholam Hossein Nozari declined to be drawn on the size of a production cut, although Iran has been pushing for a reduction of 1.0-1.5 million barrels per day (bpd).
"Here (in Cairo) we will prepare some data and maybe the final decision will be in Algeria," Iran's Nozari told reporters.
Hawkish Iran is a powerful voice because it is the second-biggest crude producer after OPEC kingpin Saudi Arabia.
The Saudis have yet to state their position.
Nigeria's Odein Ajumogobia added: "This is a consultative meeting. I don't think there is going to be any earth-shaking decision."
Qatar's Abdullah al-Attiyah said a decision "will likely be taken in Algeria" to cut production to shore up prices.
"We have to discuss the statistics... We will go to Oran. We are here to talk."
Only last month, ministers agreed in Vienna to reduce production by 1.5 million bpd, but the market has continued to slump.
OPEC, which pumps 40 percent of the world's oil, has seen prices collapse by about two-thirds since record highs of around 147 dollars a barrel reached in July. That has slashed revenue for members as a worldwide economic slowdown took hold and ravaged energy demand.
Last week, prices hit their lowest levels since early 2005.
OPEC officials and ministers are also saying the world is awash with more than adequate crude supplies, with Attiyah saying "oil stocks are high ... the highest average in the past five years."
OPEC Secretary General Abdalla Salem El-Badri, also in Cairo for the talks, said the "market is over-supplied."
In Friday trading, light sweet crude for delivery in January was down 1.86 dollars to 52.58 dollars a barrel on the New York Mercantile Exchange (NYMEX).
On London's InterContinental Exchange (ICE), Brent North Sea crude for January dropped 78 cents to 52.35 dollars.
Kuwait's Mohammad al-Olaim said he believes OPEC needs to review more information before taking a decision on production, but added that a decision to cut would probably be take in in Oran.
"There is a surplus on the market and everyone knows that, and the decline in demand is there and it is a big amount ... because of the global economic crisis," Olaim said.
Venezuela's Ramirez said Saturday's meeting would also discuss OPEC members' compliance with the cut that was implemented on November 1.
"Tomorrow we will see compliance," he said.
Many market analysts believe the most recent OPEC output cut has not been fully implemented by all member nations.
Official OPEC output, without Iraq, currently stands at 27.3 million bpd.
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