OPEC was to meet in Vienna yesterday for a pivotal production meeting that could cut crude output to defend slumping oil prices that have collapsed in the face of a fierce global economic downturn.
The spreading worldwide recession has ravaged energy demand and dragged oil prices far below the record highs above US$147 per barrel that were set last July. In turn, that has slashed OPEC’s revenues.
“The world economy is not as healthy as it should [be], so we should expect demand worldwide to be down,” said Oil Minister Ali Ibrahim al-Nuaimi of influential OPEC kingpin Saudi Arabia on Saturday.
PHOTO: BLOOMBERG
OPEC, which pumps 40 percent of the world’s crude supplies, will hold a regular production meeting in the Austrian capital, where the cartel is headquartered.
Algeria has called explicitly for OPEC to slash output to energize weak oil prices, which have been slammed by weak demand.
OPEC was also widely tipped to increase the pressure on its members to comply with last year’s steep production cuts.
The cartel has already slashed its output three times since September as it sought to breathe new life into battered oil prices.
Asked by reporters whether he wanted OPEC to cut production, Algerian energy minister and former OPEC president Chakib Khelil said: “Yes we would like to.”
Questioned about whether he would favor an output cut or full compliance among OPEC countries with previous cuts agreed last year, he responded: “Both.”
Nuaimi also said that there was an 80-percent compliance level with the cuts agreed late last year to reduce output by a total of 4.2 million barrels per day.
That means that OPEC has yet to remove 20 percent of the cuts — or 800,000 barrels per day of production — from the market. Venezuela had called on Friday for “100 percent” compliance.
When asked on Saturday whether there would be another cut, Nuaimi replied: “We will tell you tomorrow.”
Saudi Arabia has said that it regards US$75 per barrel as a “fair price” for crude — but oil prices remain far below this level.
OPEC’s official daily output quota stands at 24.84 million barrels after the last gathering in December in Oran, Algeria.
Iraq also pointed on Saturday towards a production cut — but the country is not part of OPEC’s quota system owing to persistent unrest.
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