Oil prices rise as OPEC countries call for steep output cuts
Oil prices ticked upwards on Monday, boosted by calls for sharp output cuts from members of the Organisation of Petroleum Exporting Countries (OPEC).
The price of a barrel of Brent North Sea crude for February delivery rose to $25.43 a barrel from $25.18 at the close on Friday. In New York, the light sweet crude February contract nudged up to $28.07 a barrel in early deals.
The OPEC basket price for a mix of world crudes meanwhile rose to $23.51 on Friday from $23.25 on Thursday. Prices were drawn higher following a spate of calls from OPEC member states Kuwait, Qatar, Iraq and Iran for production cuts of up to two million barrels a day to underpin prices, which have fallen sharply in recent weeks from autumn high points above $35.
On Monday, Qatar urged OPEC to start pumping at least two million fewer barrels of crude a day when it meets in Vienna next week. Qatar's Oil Minister Abdullah bin Hamad al-Attiya said that a cut "of at least two million barrels" a day was needed.
"Demand for oil traditionally falls every year from April 1.
It is certain that the cut this year will reach two million barrels" per day, he was quoted by the official QNA agency as saying. And Kuwait warned on Monday that it would not accept an OPEC output cut of fewer than 1.5 million barrels a day at the January 17 OPEC meeting in Vienna.
Kuwaiti Oil Minister Sheikh Saud Nasser said that 1.5 million barrels a day was now the "agreed figure" among OPEC member states. "We will discuss anything higher at the Vienna meeting," he said. "There is no room to even discuss a cut below this figure," he told reporters in Kuwait.
The comments followed demands over the weekend from Iran and Iraq for cuts of up to two million barrels per day to underpin prices, which would exceed predictions by many market watchers here of a cut of between one million and one and a half million barrels a day.
"This decision at the upcoming meeting should involve a cut of at least 1.5 million barrels per day," said Hossein Kazempour Ardebili, the top adviser at Iran's oil ministry, quoted by the daily newspaper Aftab-e-Yazd.
"There is also the possibility of decreasing production by up to two million barrels per day," he added. Iraq's Oil Minister Amer Rashid told reporters in Baghdad meanwhile: "We hope that OPEC will cut production at its upcoming meeting by at least between 1.5 and two million barrels per day to ensure a calm market."
Some dealers also ascribed the higher prices to the troubled talks aimed at forging a Middle East peace settlement. Security talks between Israelis and Palestinians in Cairo brokered by US and Egyptian mediators failed on Monday, according to a senior Palestinian official.
"The market is also stronger on the fact that the repeated talks between (US President Bill) Clinton, the Israelis and the Palestinians" failed, said GNI broker Robert Laughlin.—AFP.
©--Agence France Presse.
© 2001 Mena Report (www.menareport.com)