OPEC Ministers Weigh In On Production Cuts
U.A.E. Oil Minister Obaid bin Saif al-Nasseri said on December 12th that OPEC will not rule out production cuts in January if prices continue to decline sharply.
Nasseri said that: “We are very much concerned about the price decline. Of course all options are open and we don’t rule out the possibility of looking at this issue [production cuts] when we meet next month.”
The minister said that it was still too early to determine specific production cuts, “but if prices continue to be weak and stock levels high, it is logical to look at the production levels as well.”
Saudi Arabia said on December 11th that last week’s price drop was worrying, but that it was too early to take action.
Indonesian Oil Minister Purnomo Yusgiantoro took a firmer stance, suggesting that OPEC should move to curb production levels in an effort to stem recent price slides.
Yusgiantoro said that: “There seems to be too much oil in the market and it is depressing prices. Indonesia will propose to OPEC at its next meeting that it reduce production.”
Kuwaiti Oil Minister Sheikh Saud Nasser al-Sabah said on December 11th that: “It has become almost certain that OPEC will agree at its January 17th meeting to cut production levels if prices continue to fall at a similar rate witnessed lately.”
Both Sheik Saud and Venezuelan President Hugo Chavez have said that OPEC could curtail production by 1 million b/d in order to avoid a further price decline, after Iran’s OPEC governor Hossein Kazempour Ardebili said that Tehran might call for another extraordinary OPEC meeting in late February or early March to discuss additional cuts.
Iranian Oil Minister Bijan Namdar Zanganeh, in a December 12th television interview, stated that: “It is natural that OPEC feels committed to keep the average [OPEC basket] price of a barrel of crude at $25, plus or minus $3.”
The Iranian oil minister blamed the recent price collapse on oversupply.