Kuwait wants OPEC to cut output if prices fall too low
Kuwait is in favor of OPEC cutting oil output if prices fall too low next year because of a glut, oil minister Sheikh Saud Nasser al-Sabah said Saturday.
Asked by reporters whether the Organisation of Petroleum Exporting Countries (OPEC) should cut crude oil production, al-Sabah said: "If prices are low, yes."
"It would be an option for any collapse in prices in the first quarter, second quarter of next year, yes."
OPEC ministers gathering in Vienna on the eve of a one-day meeting have expressed concern that a supply glut early next year could prompt a slump in prices.
Asked whether he feared an oil price collapse, the Kuwaiti minister replied, "We have to be cautious about it, yes."
Al-Sabah said the OPEC price band mechanism would have to be reviewed.
"We have to review it with our colleagues and see how effective it has been," he said. "We tried it once it had no effect on the market so we'll see."
He hinted that ministers could override the mechanism. The system is supposed to trigger a 500,000 barrel-per-day increase at the end of this month if prices stay high.
Asked whether he would support such an increase this month, he said: "We have to discuss all options for the first quarter and second quarter next year."
The OPEC mechanism calls for an output hike if prices stay above $28 a barrel for 20 working days, and a production cut if they fall below $22 over 10 days.
But the 11-nation grouping has proven reluctant to trigger the mechanism automatically for fear of becoming hostage to it.—AFP.
©--Agence France Presse.
© 2000 Mena Report (www.menareport.com)